For many Nepali students, managing funds can be challenging, as tuition fees at foreign universities are higher than in Nepal. Considering such issues, banks and financial institutions in Nepal have education loans for students in Nepal. The education loan provides students with funding to cover their study-related expenses without paying the entire cost upfront to achieve their desired degree at a selected university. But what is eligibility, and how to apply for an education loan in Nepal?
In this blog, we provide information about eligibility requirements for education loans and the process to apply in Nepal.
Education Loan Eligibility in Nepal
The eligibility of education loans in Nepal varies according to the policy of financial institutions or banks. However, most institutions require applicants to be Nepalese citizens aged 18 to 70 years and meet income requirements.
Banks and financial institutions may assess the financial status of the applicant, which involves evaluating the income, collateral, applicant’s repayment capacity, proof of admission, and course details.
Major Banks Offering Education Loans in Nepal
Many leading commercial banks in Nepal offer education loans in Nepal for students who want to study abroad. The information about banks that offer education loans for abroad studies is provided in the table below.
| Bank | Education Loan Information |
|---|---|
| Nabil Bank | Nabil Bank provides education loans up to NPR 10 million with a flexible repayment option up to 20 years. The moratorium period is limited to 4 years or to the duration of the course (whichever is earlier). Students can get an education loan, which can be disbursed to a per-institution at an attractive interest rate. |
| Global IME Bank | Global IME Bank offers flexible education loans to students who want to pursue higher education locally or globally. Applicants get flexible repayment terms, up to 15 years in competitive interest rates, and moratorium options. |
| NIC Asia Bank | NIC Asia Bank provides collateral-based education loans up to NPR 10 million to students with a fixed interest rate of 6.99%. up to a period of 20 years to fulfill students' study abroad dreams. |
| NMB Bank | For Nepali students between the ages of 18 and 50 years, NMB Bank offers education loan facilities for a tenure of 15 years. The financing ratio covers up to 100 percent of tuition fees and travel costs. |
| Nepal Investment Mega Bank | Nepal Investment Mega Bank (NIMB) offers education loans for Nepali students planning to pursue higher education at a registered university or institution. The maximum tenure for a loan is 15 years, and the limit of loan amount is 80% of total eligible educational expenses or NPR 10.00 million. |
In addition, all other commercial banks, including Himalayan Bank, Laxmi Sunrise Bank, and Siddhartha Bank, approve education loans to Nepali students as per their policy and provisions.
How Much Education Loan Can You Get in Nepal?
The limit of education loans that you can get in Nepal depends on the bank and financial institutions, the applicant's financial profile, course, and destination country. Banks and financial institutions may also consider tuition fees, accommodation, and other eligible expenses to determine the loan amount.
In Nepal most banks limit the maximum education loan amount to NPR 10 million, or 80% of eligible education expenses (whichever is lower), with a tenure of 15 to 20 years and an interest rate of 6.99%, or a floating interest rate.
Documents Required for an Education Loan
Nepali students may require various documents to apply for education loans in banks and financial institutions. While the document requirement may vary based on the institution, the common documents include academic documents, collateral-related documents, income-related documents, and security-related documents. The example of important documents required for educational loans includes the following:
- Application form for the education loan
- Copy of Permanent Account Number (PAN) Card, Citizenship or National ID Card, and valid passport/visa.
- No Objection Certificate (NOC) from Ministry of Education
- Offer letter with details of course and fee structures
- Transcripts or marksheets of previous qualifying exams
- Collateral documents like lalpurja (land or property ownership certificate), tax receipt, trace map, approved drawing map of property, building completion certificate, and property valuation documents.
- Income verification documents like salary certificate, business income, tax-related documents, evidence of remittances, job agreement, etc.
- Any other documents if required by the bank or financial institution.
How to Apply for an Education Loan in Nepal: Step-by-Step process
You can apply for an education loan in Nepal via any commercial bank or financial institution. The education loan application process involves several processes that the applicant must follow for faster processing. Below we provide a step-by-step process to apply for an education loan in Nepal:
Step 1: Calculate your total education cost.
The first step involves calculating the total cost that you require, including tuition fees, living expenses, travel, accommodation, and other study-related costs.
Step 2: Compare education loan options.
After calculating the educational costs and related expenses, applicants are required to compare loan schemes provided by various financial institutions. One must compare the loan amount, interest rate, repayment method, and moratorium options.
Step 3: Check your eligibility.
This step involves checking the applicant's eligibility requirement for the education application. Applicants are required to ensure they meet age, income, academic, and collateral requirements.
Step 4: Prepare documents.
In this step, the applicant prepares important documents, including academic, financial, and collateral documents.
Step 5: Submit the application.
Following document preparation, applicants are required to submit the required document to the bank or financial institute.
Step 6: Property and income verification
After submission of the application, the applicant might also provide property and income verification documents if necessary.
Step 7: Loan approval and agreement
Upon approval of an education loan, it is important to review the terms, tenure, and interest rate and verify other details before agreement.
Step 8: Loan disbursement
Upon agreement, the bank releases funds or the loan amount as per its disbursement procedure or educational institution’s requirements.
Conclusion
An education loan can be of great benefit to students who want to pursue higher studies locally or globally. And before applying for an education loan, a student must compare interest rates, eligibility requirements, collateral requirements, repayment periods, and moratorium options of financial institutions. Preparing all required academic documents, collateral documents, financial documents, and income documents is important for smooth processing and timely approval of education loans.
The entire journey of applying for an education loan may be a hassle to many applicants. For proper financial guidance, assistance, and support in preparing documents required for education loan processing for abroad studies, contact 360 Education.
