Education Loan to Study in New Zealand

New Zealand is becoming a favourite study abroad destination for international students. The main reason of attraction is that all the courses across various disciplines are conducted in English in New Zealand. It has also surprisingly well-developed infrastructure for research. 

The main challenge international students have to face is Arrangements of funds for studying in New Zealand. Studying abroad is always an expensive affair than studying in the home country. So in this article, we are going to present you complete information about Education Loan to Study in New Zealand.

How to get an Education Loan to Study in New Zealand?

Education Loans from banks are easily available for higher studies anywhere in the world. International Students looking forward to studying in New Zealand with the help of an education loan must start their process as soon as possible. You may also choose to start your loan application process with the university application procedure. The following steps will help you to reach your destination of getting education loan for New Zealand:

1. Find out the loan options available, their eligibility criteria and document requirements.
2. Calculate the fund’s requirements for further studies. Also, estimate the fund arrangements from the loan and your savings.
3. Get an enrollment letter from the admission office of the university in New Zealand.
4. Compare the suitable education loan options by considering all the factors. Select the one which matches your needs.
5. After deciding the bank and the loan amount, you should fill out the loan application form.
6.  Make a list and get all your documents required in place.
7. As soon as the bank approves your loan, it will issue a loan document that includes various terms and conditions of the education loan.
8. After signing and submitting the loan agreement, the bank will pay the loan amount to you 

Now its time to deep dive into these steps. You should follow each step with all the details mentioned in it. This is a big decision which will affect your financial life, so be careful with your decision.

Research about the banks and loan options

Find the options of banks available to you. Explore their eligibility criteria, terms and conditions as well as documents requirements. You should do some research about the banks with the help of the internet or visit the banks. But before you research, there are few things you have to consider.

Factors to consider for applying for education loan

Before applying for a student loan to study in New Zealand, you should have a clear estimation of how much money you will require and how much you are going to self-finance. Other important factors to take note of before applying for the education loan are:

• Finalise the university and the study program you want to pursue.
• Find the total amount of funds you will require to study abroad in New Zealand.
• Make a list and assemble all the documents required for applying for the loan.
• Contact the person who would give a guarantee for your loan and make sure that he agrees.
• You need to start the process for the educational loan before the three months of your student visa interview date.
• Estimate the disbursal time.

Once you are prepared with the above factor, you should check whether you are eligible to apply for the loan or not. Here are the criteria:

Eligibility Criteria to apply for international education loan

Different banks are different eligibility criteria for approving the loan. So before you fill your application form., mak sure that you met the eligibility criteria of the particular bank. The common eligibility criteria followed by all the banks are mentioned below. The applicant-

• Must have outstanding educational records.
• Must have a secured seat at the University of New Zealand.
• Must have enrolled in a professional or technical study program of studies. 
• Must be above 18 years of age or else his or her parents will have to apply for the loan.

Calculation  of the fund’s requirements to study in New Zealand

After researching and checking the eligibility criteria you have to estimate the amount you need for your studies in New Zealand. Generally, an education loan covers the total cost of a study for the particular study program. It not only includes tuition fee but also the living expenses. Here is the bifurcation of the expenses which you need to include while calculating the total amount:

• Tuition Fee:- The university fee for each academic period.
• Other university Fees:- This involves expenses such as student centre fees, student activity fees, recreation fees, residence hall activity fees, exam fees, etc. 
• Accommodation expenses:- This expense includes your housing and regular meals expenses.
• Books and Supplies:- You will also have some books and supplies expenses during the study in New Zealand. Supplies include laptop or computer expenses, lab expenses etc.
• Transportation expenses:- Things like airfare, taxi fare, parking permit, monthly bus/train pass etc.
• The premium of Health Insurance.
• Other Expenses:- Expenses of project works, entertainment,  communication, etc

Once you get your final amount requirement, you have to check your savings to check how much you will be able to pay on your own. After including this saving, the remaining amount would be arranged from the education loan. 

Enrollment letter from the university in New Zealand.

It’s time to get the confirmation from the university of Newzealand regarding your admission. This confirmation letter should be presented in the bank while applying as proof. 

There are numerous universities in New Zealand which welcomes international students wholeheartedly. Here are the top universities in New Zealand:

1. The University of Auckland
2. University of Otago 
3. Victoria University of Wellington 
4. University of Canterbury
5. Massey University 
6. University of Waikato 
7. Lincoln University 
8. Auckland University of Technology (AUT)

The list does not end here. There are many more. Check this out: Universities in New Zealand

Comparison of Education loan options

The term and conditions for international student loans may vary from Bank to Bank. You should compare the different loan options provided by the different banks for studying in New Zealand. After comparison select the one which suits your needs better. Compare the loans options with the following factors such as:

• Interest rate
• Expenses covered in the loan
• Documents required
• Processing Fee
• Loan margin
• Income tax exemptions
• Loan processing time
• Prepayment terms

Each factor is essential as it would make your decision of choosing the bank more beneficial than other bank options. If you decide after proper planning and comparing you will be able to save a few dollars. 

International Education Loan application form.

Now it is the time to apply..!! After finalising the bank and loan amount, you have to fill the education loan application form. You can find the form online or else collect from the bank. Make sure to fill correct information in it and recheck it before applying. The details asked int he application form are as follow:  following details in it:

• Your full name,
•  Parents name, 
• Address
• Date of birth,
• ID proof, 
• Course details
• University details
• Fees details
• employment details
• Income source etc

Submit the documents

To get loan approval easily, applicants need to provide some documents as proof and verification.  You can attach the documents along with the Loan Application Form for the New Zealand study. Different banks demand different types of documents. The basic documents requirements for the loan approval are listed below:

Basic Documents for Students (Primary Applicant)

• A copy of a valid passport.
• Applicant’s latest passport-sized photos.
• Previous Academic Records. You should submit your Marksheet of Class 10th, 12th, Bachelors and Masters.
• Identification document of the applicant.
• Proof of Residence.
• Proof of Age. You can present your Birth Certificate as evidence.
• Proof of Admission at the University of New Zealand. 
• Receipt of application fee Payment.
• Schedule of cost of attendance.
• Statement of Other expenses. 
• Scoresheets of exams mandatory for studying abroad.

Documents for Co-Applicants

• Proof of Personal Identification. 
• Proof of Residence.
• Latest passport size photo.

Income Proof for Self-employed Co-applicant/ Guarantor

• Address proof of the Business.
• 6 month’s Bank account statement or passbook copy 
• Income Tax Returns for the last 2 years.
• TDS Certificate.

Income Proof for Salaried Co-applicant/ Guarantor

• Copy of Salary Slip.
• Copy of Form 16.
• Bank account statement.

Other Optional Documents

• Certificates of Extra-curricular activities.
• Certificate of Minority Caste.
• Documents regarding any disability or illness.

International Education loan agreement

As soon as the bank approves your loan, it will issue a loan document The loan document or agreement includes various terms and conditions of the loan. If you agree with these you need to sign it, only then the amount will be disbursed to you. The details mentioned in it are

• The borrower name, 
• Agreed loan amount,
• The period of repayment, 
• Interest rate, 
• Identification proof details
• Guarantor's details
• Disbursement details
• The signature of all the parties involved
• Collateral security etc.

Disbursement of Loan Amount

After signing the loan sanction document, the money lending institution will pay the amount to you in instalments or as required by the university. It will also be mentioned in your loan agreement. Once you receive your money, spend on the essential educational expenses such as tuition fee, books and supplies, project work, accommodation etc. 

Collateral Rules for Education Loan to Study in New Zealand

Any property kept as a security against the education loan is known as collateral. It can be either movable or an immovable. The rate of interest r of the education loans to study in New Zealand depends straightly on collateral value. Most of the banks demand collateral only for high amounts to reduce the risk involved in paying off the credit.

Instruments used as collateral: 

• Any liquid asset such as Fixed Deposits, government bonds, life insurance policies from government-approved lenders, etc
• Any immovable property such as as a residential flat, a house, a plot with defined boundaries, a non-agricultural land etc
• Even gold, mutual fund units, can also be accepted as collateral.

Loan amount  against collateral

• If you are taking the loan by depositing your immovable asset as collateral, the representative of the bank will verify your property and prepare a report whether it can be kept as collateral or not.
• The representative will also evaluate the value of your property. Based on this report, the bank will decide the loan amount.

Repayment of Education Loan to Study in New Zealand

The loan taken to study in New Zealand can be paid in instalments. Repayment of the amount including principal and interest will start after one year of completion of the study program or 6 months after getting the job, whichever is earlier. The loan amount can be repaid in 10  to 12 years. However, the moratorium period and instalment amount vary with the funding intuition and loan amount.

You should also read these articles:

How to Apply to Universities in New Zealand?
Stay back and Work permit after Study In New Zealand
Top 5 Courses to Study in New Zealand