Navigating Student loans : A Comprehensive Guide
Yara Technologies (Private) Limited
EdTech Company providing a range of innovative solutions for schools.
The rising costs of higher education in Sri Lanka have created financial challenges for students and their families, making it harder to secure the funds needed for academic pursuits. Post the unprecedented economic crisis in Sri Lanka, with the LKR depreciating close to 50% during the period Feb 2022 to May 2024 (at one point, depreciating as much as 80% before coming back to the current levels), the cost of foreign-affiliated private higher educational programs increased by a sizable amount, creating further affordability issues. This has led to a growing demand for accessible and affordable financing options. This article explores various student loan options available in Sri Lanka, provides guidance on choosing the right loan, and highlights how loan aggregator platforms can simplify the application process, helping students and their families make informed financial decisions.
Explained below is a couple of loan options available for students in Sri Lanka:
1. Government sponsored loans;
The Student Loans Division in the Ministry of Education (MOE) offers the Interest Free Student Loan Scheme (IFSLS) to Sri Lankan students who have passed the G.C.E. Advanced Level Examination, providing financial assistance for selected degree programs at accredited institutions and approved non-state providers [refer note 1].
Additionally, the MOE's Higher Education Sector offers various subsidies and grants, while fostering international partnerships to enhance information exchange and expand scholarship opportunities for Sri Lankan students to study abroad. [refer note 2].
2. Bank and Financial Institution Loans;
Local banks offer education loans with interest rates ranging from 12% to 15% and repayment terms up to 7 years (education loan information extracted at the time of writing this article). To qualify, applicants must be Sri Lankan students with confirmed admission to a recognized institution. Requirements may include passing the GCE A/L examination, providing a co-signer or co-borrower, and submitting necessary documents such as a loan application, proof of identity, an offer letter from the institution, and verification of income or guarantor details as necessary.
Non-Banking Finance Companies (NBFCs) provide educational loan facilities to the students with a confirmed offer from an accredited institution and Co-signer may be necessary. Some of the essential documents can be listed as the Loan application, offer letter, identity proof, income verification and co-borrower documents.
Some of the private local banks are keen to provide education loan facilities to students who are trying to study abroad in order to cover their registration fees, tuition fees, examination fees and hostel expenses [refer note 3].
3. Hybrid and Specialized Credit Programs;
Many private universities have partnered up with many local banks' credit card facilities to provide financial support to students through Easy Payment Plans. These programs have different repayment schemes and some come with 0% interest options as well.
NB: The information provided above is subject to change based on amendments made by the relevant authorities. It is recommended to consult the authorities directly for the most up-to-date and accurate details before proceeding. You may refer to the government, banks and NBFC official websites for the same.
Let’s look at some useful tips on choosing the right loan to address different needs. The below given table summarises the arrears to look at when making an informative decision.
Benefits of utilizing a loan aggregator platform.
Taking advantage of available loan aggregators are highly encouraged in the loan selection process, as they consolidate multiple loan offers from various lenders into one easy-to-navigate interface. They allow users to compare interest rates, terms, and eligibility requirements across different lenders, saving time and effort.
"EduLoan" by Yara Technologies Pvt Ltd is an education loan aggregator platform that helps students compare loan options including loan amounts, interest rates, repayment schemes, and eligibility requirements from trusted banking partners in one place, helping them to choose the best loan facility that aligns with their goals and budget. It features a straightforward online application process, allowing you to request a loan without the need to visit multiple banks or endure long waiting times.
This article concludes with the purpose of navigating multiple education financing options available in the current market and the convenience an education loan aggregator platform could bring into the table by simplifying this research process by enabling the comparison of different financing options provided by different banks and financial institutes under one-roof.
Please refer to EduLoan official website for FAQs and additional information on requesting an educational loan the most convenient way - https://eduloan.lk/
Note 1
https://www.mohe.gov.lk/images/pdf/INTEREST_FREE_STUDENT_LOAN_SCHEME.pdf
Note 2
Note 3
https://www.combank.lk/downloads/file/205/education-loans