Disbursement Process of Canara Bank Education Loan

Did you know? Students who experienced loan disbursement delays had problems covering their personal expenses, registering for courses, and attending classes. These challenges had a significant impact on the final performance in terms of GPA.

When you get a sanction letter, it means your loan application is approved. But, the actual money transfer, or disbursement, happens after you complete some additional formalities following the approval. Let’s understand every aspect of the Canara Bank education loan disbursement process in detail so that you can do it with ease. 

Overview of Canara Bank abroad education loan

There are several Canara Bank education loan schemes, but only two are specifically designed to assist students studying abroad. Let's take a glance at these schemes.

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1. Education loan scheme for pursuing MS abroad:

The scheme provides financial support for abroad studies from select top-ranking universities. This scheme is limited to STEM master’s courses only. 

2. IBA model education loan scheme:

This is the Canara Bank abroad education loan scheme which is almost similar to other public sector banks’ IBA education loan for abroad schemes. An overview of this scheme is shown in the table below. 

Disbursement process of Canara Bank education loan

For all the public sector banks the disbursement process is quite similar. Canara Bank education loan also looks like them as well. The disbursement process of Canara Bank education loan takes place as per these steps - 

• Documentation for disbursement:

Before you can receive the disbursement, several documents must be submitted. First, you need to fill out a disbursal form to obtain the disbursement letter from the bank, which will be used later in the process. Additionally, you must submit proof of the required funds. For tuition fees, you may provide documents like the I-20, and similar documents for other expenses. An Income Certificate, covering the annual income of the entire family of the applicant, must be submitted at the time of loan sanction or the disbursement of the first installment. This may be requested every year, depending on the applicant's profile.

• Verification and disbursement letter:

A final verification process is conducted for the documents submitted in the previous step. The bank may perform an Original Seen and Verified (OSV) process to ensure everything is in order. Once the bank completes the verification, it issues a study loan disbursement letter, specifying the final loan amount to be paid. The disbursement letter needs to be signed by the student before the disbursal.

• Transfer of funds:

In the final stage, Canara Bank disburses the tuition fee directly to the university. Just to be on the safer side it is always recommended that a borrower should submit the tuition fee disbursement schedule to the lender in advance. If you opt for on-campus housing then in this case as well accommodation cost is also sent directly to the student.

For other expenses like off-campus accommodation and other living expenses, the funds are transferred to the student's bank account. Apart from that, the bank also provides a travel card (FOREX Card) that can be topped up with foreign currency for students to spend. This helps them initially when they land abroad and do not have a foreign bank account.

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Challenges during education loan disbursement

Common challenges experienced by borrowers in the disbursement of education loans are - 

• Discrepancies in loan amounts: The ultimate disbursed loan amount may deviate from the initially approved sum, attributed to adjustments by the lender or alterations in the student's eligibility.
• Loan servicing and communication hurdles: Borrowers may encounter difficulties in communicating with the lender or its loan servicing agency regarding inquiries, modifications in repayment terms, or other related concerns.

To prevent or reduce these problems during the disbursement process of Canara Bank education loan, students should stay active, know what is happening, and stay organized while applying for and receiving the loan. But do not worry, because Canara Bank's disbursement process is easy and does not have these issues.

Read also:

• HDFC Credila Disbursement Process
• Avanse Education Loan Disbursement Process
• SBI Education Loan

After getting the loan, students often forget important steps in the education loan process. Things like repaying the loan, taking advantage of tax benefits, and other crucial factors are often overlooked by lenders. Since education loans are long-term commitments, it's a good idea for students to get advice from experts. Our knowledgeable education loan counselors guide students throughout the process and help them make smart decisions. Considering the already high cost of studying abroad, we do not want students to stress about our fees. That's why all our services at GyanDhan are completely free for students. Start your journey today by checking if you're eligible for a loan.

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Frequently asked questions