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Education Loan for Studying in Australia

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30 Dec

LiveWebTutors General Blog

Education Loan for Studying in Australia

International Student Loans for students wishing to study in Australia

According to reports, Australia draws over sixty thousands global students across the world hailing from over two hundred nations which helps in giving Australia a multicultural, linguistic and ethnic diversity. There are several reasons why Australia is very popular and continues to hold a strong hold in the international student market. Even though Australia does not have the finest institution of higher education of the world like the United States of America or the United Kingdom, it does have universities that offer good quality education.

Admission into good universities in Australia are relatively easy. Reports state that the University of Melbourne, which is a top-ranking university in Australia, has over 20,000 international students, a figure that is close to the total number of students enrolled at Harvard University. The other factors that contribute to Australia's success in enrolling international students, includes the availability of two- to four-year post study work visas thereby giving students to work in Australia for a couple of years after completing their course in Australia.

Other factors include, the fact that Australia is in close proximity to major countries in Asia, and the growing perception that Australia, specially the main cities of Melbourne and Sydney are welcoming in nature, welcoming to foreigners, in addition to the fact that several restaurants and shops in Australia cater to Chinese clienteles. Thus Australia has succeeded in drawing students living outside Europe, for the most part from China. Australia has thus been advertising itself as an English-speaking country with good universities, coupled with a good climate and a welcoming culture for international students.

Australia is increasingly being recognised for the quality of education that is imparted to students and safe study environment that it offers to international students, in addition to giving students the opportunity to assimilate career relevant experience into their study which is extremely valuable.

With the hike in high tuition fees, and exchange rates fluctuating coupled with accommodation and other necessary expenses, an international student wishing to reside and study in Australia may require an educational loan and financial assistance to pay for tuition fees, accommodation and other general but essential requirements. 

Points to keep in mind while applying for an overseas student loan

  1. Have clarity behind the motive of taking an educational loan for studying abroad:

Introspect and contemplate about your career prospects and the goals that you have. Conduct a thorough and comprehensive check about course fees of various colleges and universities, the facilities they offer as well as benefits they provide to international students. Check to see if you meet the eligible criterion. Prove evidence of your financial standing and state the amount of liability that you can take.

  1. Research on the plethora of job opportunities that are available and research the job market well:

Undertake a research on the job market and the job opportunities that can be offered to you after you have completed your course. This will give you an idea on how to repay the loan that you have taken from the bank.

  1. Research on the various student loans available and it is advisable to compare interest rates, loan terms and processing fees of various banks.

After you have finalized on the course of your choice, compare the interest rate, processing fees, repayment terms, and prepayment charges among others. Check to see if you will be required to pay a collateral or provide a guarantor. Understand how much student loan will cover, i.e. if it will cover tuition fees, accommodation costs, books and supplies, study equipment and other general and living expenses. It is important to have a clear understanding of what your scholarship will cover so as to have an understanding of how much money you have to pay from your pocket.

  1. Comprehend and take advantage of the various tax benefits pertaining to student loans.

There is a deduction for various student loans not on the principal amount but on the interest that a student pays. This deduction is available to students if they take loans from registered banks and is available to students for a period of eight years or until the entire amount of interest is paid. Take advantage of these benefits to cut down your costs.

  1. Always have an emergency fund and a backup plan that you can use in case you are unable to pay your student loan.

It is always advisable to have a back plan that you can use in case you are unable to pay your student loan. Due to some unforeseen circumstances, if you are unable to get a job after completing your course, or if you are forced by circumstances to leave an organization after being hired, you would still be required to pay back your educational role. Thus you should spend wisely, curtail your expenses and ensure that you save. Your savings will come handy if you are unemployed for an interim period. It is advisable to save and have savings for at least six or eight months so that you are able to pay your installments in a timely manner without delay so as to mitigate the chances of having a negative impact on your credit score.

Eligibility criteria for receiving an international study loan in Australia

To apply for a student loan from Australia, a student has to meet the list of following important criterion.

  1. The student should have completed high school or the equivalent of high school.
  2. The applicant of the loan should be an Australian citizen and if not, should be a citizen of another country who is eligible for a loan. For further clarifications, you can ask your university or local bank.
  3. The student should have got admission in a university that is approved by the bank. You can check with the bank and ask them to provide you with a list of various universities which they support.
  4. The student should be strong financially. This is done to ensure that the student applying for the loan is able to repay the loan in time and is not a defaulter.
  5. The student applying for the loan should have a valid Australian visa.
  6. The student applying for a loan should have a good academic record and must exhibit academic excellence.
  7. The student applying for the loan should be eighteen years or above, i.e. the student or the loan applicant should be an adult else the student’s parents are required to avail the loan.
  8. While applying for the loan, you have to provide the bank with some kind of security like bonds or collaterals or your parent or any other person taking the loan on your behalf has to have the required amount of money in their account necessary to apply for a loan.
  9. Banks more often than not give loans to students who are full-time.
  10. The student applying for a loan has to provide evidence to show that he truly requires the funds for his education. You can check with the respective banks for the important documents they require at the time of application of a loan
  11. Have a visa
  12. Be able to repay the loan before your visa's expiry date
  13. Have an Australian residence
  14. Have an Australian bank account

Kinds of students loans that students can take in Australia to help fund their education

There are essentially three kinds of loans that students to help can avail to finance their education and support their cost of living in Australia.

They are as follows:

  1. Student Loans that are given to undergraduate students wishing to pursue higher education in Australia at an Australian institute of higher learning like colleges, universities etc. These loans are taken by students who have completed their high school and wish to study further and enroll themselves in a college for an undergraduate degree.
  2. Student loans that are exclusively given to students who have completed their graduation and wishes to study further and enroll themselves in a post graduate degree on the subject of their choice.
  3. Career education loans: These loans are given to those students who wish to pursue a technical course in order to advance their career in the field of their choice in various technical colleges and universities in Australia.

Repayment of an international student loan in Australia

The interest rate depends on the bank or the student’s chosen university or the Australian government issuing the loan. The various modes of repaying the loan include cheque, cash, draft, online payment or demand drafts. You can either pay the loans monthly or on a quarterly as per the policies and guidelines of respective banks. Bank loans, unlike university loans, can be repaid after a student has finished the course or after a year or two after completing their course. There are some banks that do not permit early payments so be sure check with your bank in order to prevent paying any penalties for paying the bank early.

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