Can I Get an Education Loan for FRM or CFA Courses in India?
Last Updated : May 30, 2020, 3:06 p.m.
Yes, you can pursue courses such as Financial Risk Management (FRM) and Chartered Financial Analyst (CFA) with an education loan. The bank will lend you money based on your academic performance and capability to earn money after the course completion. Is my loan amount affected by the course I choose? Yes, it may affect your borrowed amount. If you apply for a highly recommended course, the bank provides you a higher education loan and a lower disbursal for a less known course from an educational institution.
CFA or FRM Course Fee Structure
You need to pay a one-time enrollment fee in either of the two courses. While you need to pay the registration fee for Level 1, Level 2 and Level 3 in CFA, FRM comes with only two levels. Both these courses will have tuition fees, book fees, test fees, etc. Based on your expenses involved during the course period, the lender can decide the loan amount for you. You need to submit the fee structure and admission letter to the lender for the loan confirmation.
How much can you borrow?
The bank or non-banking financial institution will provide you the loan amount for the FRM or CFA course based on your academic performance and co-applicant income. An education loan can be given on a co-borrowing basis too.
You have up to 15 years to pay the borrowed amount after the completion of FRM and CFA course. The lender provides you 6 to 12 months of moratorium after the course completion. After the moratorium period, the loan repayment will begin.
What Would be My EMI?
To calculate the EMI of your education loan, you can use the EMI calculator tool. You just need to insert the details of your loan, such as principal amount, interest rate and tenure, in the calculator. See the example below to know how it will work and help you during the loan payment.
Suppose you borrow INR 2,00,000 at an interest rate of 9.55% per annum for 8 years of tenure. Then the repayment schedule for the loan amount would be as mentioned in the table below.
| Tenure (in Years) | EMI (in INR) | Interest (in INR) |
|---|---|---|
| 1 | 17,541 | 10,496 |
| 2 | 9,188 | 20,500 |
| 3 | 6,411 | 30,806 |
| 4 | 5,029 | 41,411 |
| 5 | 4,205 | 52,316 |
| 6 | 3,660 | 63,516 |
| 7 | 3,274 | 75,009 |
| 8 | 2,987 | 86,792 |
Margin on the Loan Amount
Lenders will apply a margin to your loan amount 5% if it is above INR 4,00,000. As per the RBI guidelines, the lender can finance 100% of the course amount if it is below or equal to INR 4 lakh. Otherwise, the user needs to manage the margin money with his/her scholarship or assistantship.
Need for Collateral
You won’t need to provide any type of collateral if it is within the range of INR 7.5 lakh above which the lender may require collateral to sanction the loan amount. You can submit anything from Fixed Deposit, Insurance Policy, Property, Non-agricultural Land, etc. And the collateral not only speeds up the loan process but also lowers the interest rate on the loan.
Effect of Education loan on My Credit Score
You can use the education loan as a tool to build a credit history for you. The timely repayment track can help you maintain a good credit score , which will reward you with furthermore credits as you move on in your life.