If you’ve kept up with the latest trends in the education sector, you would know that cost of schooling has risen all over the world. A prime reason for this is the increase in the number of top-notch Universities. This is why education loans have become one of the most easily financing option for students looking to venture into higher studies.
But, do you know what the education loan situation is like in the Philippines? You will, once you read through this page which includes all the basic information regarding education loan in the country.
How is an Education Loan provided in the Philippines?
Education loans in the Philippines are mostly supported by the government. Developmental Bank of Philippines (DBP), a state-owned bank specifically runs the Higher Education Loan Program for Students (HELPS). Through this the government gives out about PHP2 billion to educational institutions, who in turn will lend it to the students. However, the decision on who gets the loan is under the institution's’ discretion.
Apart from HELPS, there are a few other less-known loan program which one can apply for at the university they are looking to study in.
Is there a selection process to choose the best education loan applicants?
Yes, all the institutions run a carefully-planned selection program to select the best students from the lot. This is because the government has less money to spare when compared to the number of college applications that come in.
The selection process is more likely to choose a student with an exceptional track record with regards to their previous academic performances. However, if you are considering applying for a education loan, you need to first check to see if the university you are applying offers any scholarships.
What is the procedure to apply for a Student Loan?
The application process for a student loan usually differs from university to the other as they are given the autonomy to choose a system that best suits them. However, the basis for all these loans remain, more or less, the same.
Here are a couple things you need to do:
- You will need to submit a properly filled application form with the right information.
- You will have to submit a copy of the billing statement for the course you are interested in.
- Although, this requirement isn’t compulsory, you will need to provide proof that you really are in need of a loan. For instance, the Social Security System (SSS) loan program requires you to provide proof that your family’s monthly earning is at least PHP25,000 or below.
In some cases, you will need to provide extra documentation as and when instructed. To get a clear idea of what the exact prerequisites are, you will need to get the relevant information for each program individually.
Can one get a Student Loan with a bad credit?
Having a bad credit is detrimental to your loan application, irrespective of what you need the money for. The process may get extremely difficult when you are applying for loan at a private student loan. However, there are a few ways you can employ to deal with the situation.
- Pay a risk premium
You will be expected to pay a risk premium, which would get you slightly higher interests but you will get the loan nevertheless. In case, you don’t want to agree to the high-interest rate deal, banks are likely to demand for a collateral that has a considerably higher value than the loan you’ve applied for.
- Get a co-signer
This is the best possible way to get an education loan with low interest rates. Besides, when you get a co-signer, the chances of your application getting approved dramatically increases. The co-signer, though, needs to be a family member or a close friend who is willing to support you on your educational journey.
Getting an education loan is the best possible way to fund your higher studies as your education will eventually help you repay the loan. However, you need to be extremely careful so that you don’t end up choosing a loan that might burden you in the long run with heavy interests.