Basic Overseas Education Loan Terminologies – Glossary 2

Hello Reader,
The fact that you have landed on this page proves that you are applying for an overseas education loan to study abroad. Congratulations on that!


Either you are new to the loan specific terminologies or want to double check your knowledge. Either ways, you have landed on the right page. Have you read our 1st article - Basic Overseas Education Loan Terminologies – Glossary 1 which covers the 1st part of the loan terminologies? 


This article is in continuation to it with the 2nd part of Glossary to help you understand better. You can find the 1st article on the same page.
 


Read on to get introduced to the next set of foreign education loan terminologies.


Interest Rates related Education Loan Terms:

Accrued Interest:

The interest earned by the lender and payable by the borrower is called as Accrued Interest which is calculated on top of the unpaid principal balance on a daily.


Floating Interest Rate:

The interest rates which are likely to change over a short period of time are called as Floating Interest Rate which is generally applicable for certain NBFCs and many international education loan lenders, as well.


Fixed Interest Rate:

interest rates which do not keep changing within short periods of time is known as a fixed interest rate and if in case the do change it does not affect those candidates who have already availed education loans.


Marginal Cost of Funds-based Lending Rate (MCLR):

Most of the Indian Lenders follow fixed interest rate, this benchmark value based on which the loans are given is called as MCLR and is often used in the online education loan pages.


APR (Annual Percentage Rate):

International loan lenders often use this to indicate the interest rates charged by them for abroad education loans. Example: MPower Finance, Leap Finance, Prodigy Finance.


We will now focus on the education loan jargons related to Secured Overseas Education Loan Process. As known by all out of the 2 types of loan available by Indian Loan enders – Secured Loan are where collateral needs to be pledged, whereas Unsecured Loan is where collateral need not be pledged.
Read on.


Collateral:

For an education loan the asset mortgaged by the borrower is called as a collateral.
An immovable property or liquid assets is pledged as collateral security to the lending bank in order to borrow an education loan.


Loan Margin:

Granted by government banks in India this education loan term is mostly used by lenders of collateral education loans which basically refers to a candidate’s contribution towards their total expenses for higher education abroad expressed in percentage.

Education Loan Terms Related to Disbursement

Education Loan Disbursement:

The amount of education loan released to candidates is often referred as education loan disbursement which is used by the lenders when they release the amount to candidates. The whole process is called as disbursement of education loan.


Pre-visa disbursement:

before candidates begin their visa, application process a certain part of the loan amount must be disbursed, this term refers to the pre-visa disbursement. 


This was all about the overseas education loan jargon glossary. As maximum terminologies are covered in the article above, you can contact any financial advisor for how to get education loan for study abroad or visit our previous articles for elaborated information.
Good luck!

 

Comments

  1. StevenHWicker3 December 2020 at 10:19

    Interesting Article. Hoping that you will continue posting an article having a useful information. Uni rankings UK

    ReplyDelete

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