Cough up more security or top-up your loan

Arun Jacob, managing director of Array globe.com, an education consultancy for Britain, New Zealand and Australia, says the new visa norms mean a student's budget goes up by Rs 4-5 lakh on average, besides the rupee volatility.

For students like Sidhhesh Inamdar, it is a bigger shocker because he's been selected by The University of Warwick and is likely to receive his call letter by this weekend. He had planned to apply for a visa after that. “I was ready with £8,000 (based on the earlier, £800 norm) to show at the consulate. Now, I will have to borrow another £1,000 from my father,” he says.

In situations like this, says Aurangabad-based education consultant Anirudha Hatwalne, students often enquire if they would get a leeway since they've already secured a seat. “But, visa guidelines have nothing to do with a student's admission. Even if the norms change on the day of applying for a visa, you will have to adhere to the new norms,” he explains. Presently, Hatwalne says, admissions are on for the September intake in Britain and the July intake in New Zealand (though the last date is approaching). One is required to have the total amount for at least 28 days on you (either in a savings account or in a fixed deposit) or as part of an education loan. Consulates prefer that you have an education loan because your background check has been done by the bank that offers a loan to you and that also establishes you will not default on college fees.

You are asked to show the amount (partially or completely) at the time of applying for a visa, warn consultants. The tuition fee for UK universities is around £10,000, plus £9,000 now for the visa. That is, at the time of filling the application, for you have to show you have the entire £19,000. In case you've part-paid, you will have to show the remaining funds with you for a month.

Fund accumulation may not be a very difficult task for Inamdar. But, other may revisit their decision to study abroad. Such students can either see if their education loan can be increased or take a top-up. Say, you were planning to apply to UK colleges, for which you had accumulated £7,000 (£800 times nine). Now, you need to show another £1,500-2,000 or up to Rs 1.5 lakh (£1=Rs 80). You could add this amount to your loan requirement or ask for a top-up of this amount.

When you apply for an education loan, you do not need any collateral/guarantor till Rs 4 lakh. Between Rs 4 lakh and Rs 7 lakh, you need a guarantor and for over Rs 7 lakh, you need some collateral. In this case, you may be asked for higher collateral to be eligible for a higher loan amount. What is accepted will vary from bank to bank. Largely, it can be investments that can be kept with the bank. “In such cases where the overseas universities hike the fund requirements, borrowers can opt for a top-up loan. The requirement of collateral usually increases with the quantum of loan," said A K Dutt, executive director of Dena Bank.

Mostly Indian banks lend between Rs 10 and 15 lakh for study in India and up to Rs 20 lakh abroad. According to the State Bank of India website, for studies in India, the maximum loan available is Rs 10 lakh and for studies abroad, the maximum is Rs 20 lakh. The bank will charge you 13.5 per cent for loans up to Rs 4 lakh and 13.25 per cent for loans between Rs 4 lakh and Rs 7.5 lakh. It is 12 per cent for loans above Rs 7.5 lakh.