HNB Educational Loan: Step by Step
Hatton National Bank (HNB) offers many financial services, and one of the highly sought-after is their Educational Loan. The loan is intended to help students who would like to pursue higher studies locally and abroad. If you are thinking of availing the loan for studies, you should know how to apply, how much you can apply, and how the loan terms and repayment plans are.
1. What is HNB Educational Loan?
An HNB educational loan is a personal loan which is utilized to finance study expenses. This may be the tuition fee, boarding, traveling cost, and other expenses related to studying. If you are doing an undergraduate degree in Sri Lanka or want to study abroad, easy options are present at HNB to finance your studies.
The loan is normally given for international and local education, which has varying limits based on where one is studying. The bank offers the financing that will enable your education to continue without being interrupted due to finances.
2. Eligibility Requirements for HNB Education Loan
Before you obtain an education loan from HNB, you must fulfill a set of requirements that qualify you to be given a loan. The requirements guarantee that the bank lends money only to students who are capable of repaying the loan. The requirements are as follows:
Age: The applicant for the loan must be between 18 and 65 years of age at the time of submitting the loan application. The co-borrower, usually a parent or guardian, will be older.
Citizenship: The applicant must be a citizen of Sri Lanka, and the school or university must be recognized by the concerned authorities.
Income Requirement: You must show you have a regular source of income. The applicant (or the co-applicant) must possess at least LKR 100,000 as the monthly income in order to avail themselves of the loan.
Educational Requirement: You must pursue a study in a foreign or domestic approved institution/university of study. In pursuing your studies overseas, you must show the letter of acceptance or documents of admission by the institute.
Co-borrower: If the borrower happens to be unemployed (e.g., in the case of a young student), then a parent or guardian will typically be asked to sign the loan agreement as a co-borrower and will be liable for making repayments.
3. How Much Can You Borrow with an HNB Educational Loan?
The quantum of loan for which you are eligible will depend upon factors such as whether you want education within the country or abroad and how much fee your course is being charged. HNB maintains flexibility to determine the quantum of loan, usually up to 90% of the education cost.
For Local Studies: The loanable amount can be up to LKR 5 million for local studies, like tuition fees, accommodation, and other study-related costs. It will be based on the specific course nature and overall study cost.
For Foreign Studies: In case you need to study abroad, the comfort of the loan can be up to the value of LKR 20 million. This covers tuition fee, living costs, traveling and other study costs that you might need.
Even though these are typical loan amounts, the funds that you will borrow will be based on your needs, the expense of the school program, and if you can afford to repay the loan.
4. Repayment Terms and Conditions
Repayment is also the most critical feature of any loan, and you would be well aware of what is the deal after you get the terms clarified. The HNB Educational Loan provides easy terms to repay for ease of students as well as families by alleviating their financial burdens.
Grace Period: You have a grace period when you are paying back the loan from the bank. In most cases, you will not be required to begin paying back the loan until you graduate from school, which might be a couple of years. In most cases, there is a grace period which lasts until 6 months after graduation or after securing a job.
Repayment Period: The repayment period depends on the amount borrowed and your personal financial situation. The repayment period is typically 5 years to 10 years. With longer terms, monthly payments are less, although you are paying more in interest over time.
Interest Rates: HNB provides attractive interest rates, and the interest rate can differ based on whether you opt for a fixed interest rate or floating interest rate. The interest rate can make a huge difference in how much you have to pay each month, so it is advisable to calculate and select accordingly based on your financial capacity.
5. Documents to Apply for an HNB Educational Loan
When advancing a loan to you from education loan by HNB, they will need to see some documents in order to expedite processing of the application.
The documents assist them in tracking your record, performance in academics, and wealth position. All the documents are listed below for your requirement.
Application Form: Duly filled loan application form, which can be found in any of HNB's branches or their website.
Proof of Identity: Sufficient National Identity Card (NIC) or proof of identity through applicant's and co-borrower's passport.
Proof of Income: Three months bank statements or salary slip to establish economic stability of the applicant or co-borrower. If the co-borrower is employed, income details also have to be provided.
Educational Papers: Document of admission or joining a good institution. It can be an admission letter, fee structure, or any other document the school issues.
Co-borrower Information: Since you may not be employed, you would need a co-borrower to settle the loan. The co-borrower too needs to provide his/her income information and identification documents.
6. How do I Apply for the HNB Education Loan?
It is easy to apply for an education loan at HNB. Here's what you have to do:
Visit the HNB Branch: Begin by visiting the local HNB branch or calling the loan department. You can also visit HNB's website for more details.
Fill Out Loan Application: Fill out the loan application, with your own details, the course you are studying, and the amount you want to borrow.
Send Required Documents: Send documents as stated above (proof of identity, proof of income, proof of enrollment, etc.).
Loan Assessment: HNB will determine your qualification according to your financial stability, education cost, and the requested loan amount. This can involve a credit evaluation and determination of your repayment ability.
Approval and Disbursement: HNB, after being approved, will transfer the loan into your student's institution account or to yourself, as agreed.
7. Benefits of HNB Educational Loan
There are several benefits of availing an HNB Educational Loan, which is why it is so popular among students:
Convenient Repayment Terms: You can avail up to 90% of your higher education cost, which in fact becomes a relief for your pockets.
Grace Period: With the grace period wherein you can study tension-free before paying the loan cost, you do not have to develop immediate financial burdens.
Competitive Interest Rates: HNB's competitive interest rates are relatively lower interest rates compared to most of the other loans that enable easy repayment.
Longer Repayment Period: The easy repayment plan has the facility to repay the loan in a series of years with small and convenient monthly payments.
Financial Advice: HNB provides you with financial advice at every stage of the loan process to allow you to select the most suitable loan scheme according to your requirement.
8. How Much Loan Do You Need?
To figure out how much you require for your education loan, you need to estimate the total cost of education. Here is how you need to do it:
Tuition Fee: Determine the tuition fee, whether domestic or international.
Accommodation: If studying abroad, include living costs such as rent, electricity and water bill, and food bill.
Travel: Include travel cost, fare, visa fee, and other costs incurred on traveling.
Books and Supplies: Don't miss the cost of study material such as books, computer program, or laptop.
Miscellaneous Expenses: Include other fees such as health insurance, internet, or extra-curricular activities.
Once all these charges have been computed, you would get to know the amount of money you would borrow. HNB loan limit would be worked out on that, and you would be eligible for borrowing a maximum of 90% of total study expenses. Borrow the exact amount needed and do not overload yourself with excessive debt.
Taking an HNB Educational Loan is a logical option for the student who should go for further studies but is not able to do so due to lack of funds. With their easy interest rate, easy loan repayment facility, and repayment of all the studies' expenses except part of the cost, HNB offers a complete finance plan for students. With the understanding of the factor of eligibility, loan size, and the term of the loan, you can make an informed choice and pursue higher studies with confidence.
When you take this loan, ensure that you analyze your financial needs appropriately, read the terms of repayment properly, and ensure that the size of the loan is as per your real needs. This will enable you to concentrate on your studies without any financial worries.