Banks in Pakistan offer various types of loans for different purposes, including higher education. With ever-increasing inflation and the commercialisation of the education sector, higher studies have become considerably expensive in the last two decades. Getting a professional degree in Pakistan from a reputable institution requires a considerable sum of money both for admission and for fulfilling ongoing requirements throughout the degree.
Education plays a vital role in improving the quality of life of individuals and in improving the economy of a country. Realising the importance of education and the lack of affordable student opportunities, the Government of Pakistan launched the SLS- Student Loan Scheme in 2002. Although the Scheme has many attractive features, there is still a lot more that needs to be done to ensure that higher qualifications are accessible and affordable for Pakistani students.
Nearly all commercial and private banks in Pakistan offer student loans. Let us first look at the SLS scheme for students.
The SLS Scheme was launched in collaboration with major commercial banks of Pakistan, including the following:
The SLS scheme is led and administered by a committee of high-rank government officials, including the Ministry of Finance, SBP, and commercial banks.
This Scheme aims to provide a means of financial assistance to performing students who have a good track record. The loans offered under this Scheme are interest-free and cater to various education sectors in the country, including engineering, medical, and other professional fields.
Financing under the SLS Scheme requires students to fulfil a set of criteria for availing of the student loan. The criteria include the following:
The loan is available in three types, i.e.:
The loan can be paid in instalments and structured to include all of the above.
The SLS loan can be availed for a maximum tenor of 10 years. Repayment of the loan starts one year after the completion of education or 6 months after getting the employment, whichever is earlier.
Private banks also offer some education-based loans, but their features differ significantly from the SLS scheme. Some banks offer a nominal loan, while others offer much higher limits. The repayment of nearly all of these loans starts right from its disbursement, and there is no grace. However, these loans also do not have strict requirements regarding merit and can help you improve your education even if you have not performed well in the past. These loans have higher pricing and, therefore, are unsuitable for those who cannot afford them.
Askari Bank offers “Askari Education Loan” to students pursuing higher education.
Eligibility: You are eligible for AKBL’s education loan if you are a Pakistani national and have already received admission from a recognised Pakistani or foreign institution. The age limit is very broad, and anyone between 18 and 50 can avail of this loan. You can also apply for the loan as a co-applicant with another friend or family member.
Academic Record: Strong academic credentials are a plus, and you must have scored at least 50% marks in your last examination.
Limit: The maximum allowable limit of this loan is PKR 1,000,000/
Apart from these general requirements, the bank will conduct a detailed analysis to gauge your debt repayment capacity and conduct a background check. The bank will also scrutinise your creditworthiness by checking your credit report.
This product was developed by MCB in collaboration with LUMS. The facility is only available for LUMS students. Under this facility, MBA (regular & executive) students can avail up to PKR 1,000,000, which can be used for education expenses.
Almost all banks also offer personal loans, which can be utilised for various purposes, including education. Bank Alfalah’s personal loan is one of them. The loan is charged at standard rates, and therefore, you need to have adequate income, or your guardian needs to be able to repay the debt & interest obligations. With BAF’s personal loan, you can avail anywhere between fifty thousand to three million rupees for one to four years. There is no restriction on fund usage, so you can use the loan to pay your fee or meet your day-to-day education expenses.