A List of Basic Student Loan Terminology
Posted date: 28 Apr 2022
Most students who intend to pursue higher education abroad choose an education loan as a source of funding. There is a good risk that such higher education seekers would become lost in technical language while performing their research on education loan providers. In clear, basic language, this article will provide you with some of the most regularly used student loan phrases.
Education loan disbursement: Lenders frequently use the term "education loan disbursement" to describe the amount of education loan that has been given to applicants. The procedure of disbursing an education loan occurs when the lending institution releases the loan amount to applicants.
Pre-visa disbursement: This term refers to a portion of the loan money being disbursed before applicants begin the visa application procedure. Candidates who have acquired foreign education loans to enroll in countries such as Germany and Canada frequently request a pre-visa payout. Students must deposit one year's living expenses and provide documentation of the same in order to obtain a student visa to study in such countries.
Cosigner: If you are an international student studying in the United States, you will almost always need a cosigner who is either a United States citizen or a permanent resident. This person is equally liable for the debt and, as a result, must return it alongside you.
FAFSA: The Free Application for Federal Student Aid (FAFSA) is a form that students may fill out and submit each year in order to request financial assistance.
Loan Tenure: One of the most common student loan terminologies is "loan tenure," which refers to the length of time it takes to repay a student loan. Loan tenure of 15 years, for example, suggests that applicants are allowed to repay their education debt over a 15-year period.
Amortization: This refers to the gradual payback of an education loan in the form of periodic installments of the principal and interest amount. Many foreign lenders use this word to describe the payback process for overseas education loans.
Deferment Period: A deferment is an extension provided by the lender on the repayment of the principle amount to loan applicants.
Loan Waiver: Students who are unable to find work for five years after completing their studies are eligible for a loan waiver. Students must offer genuine reasons for their allegations that they are unable to repay their student loans to lending institutions. Waiving an education debt is entirely dependent on the policies set forth by various lenders.
Floating Interest Rate: Interest rates that are anticipated to alter over a short span of time are referred to as floating interest rates. Many foreign education loan providers, as well as some other non-bank financial institutions (NBFIs), have fluctuating interest rates.
Accrued Interest: The interest income by the lender and owed by the borrower is referred to as accrued interest. On top of the outstanding principal debt, daily interest is calculated.
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