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
The SLS Scheme was launched in collaboration with major commercial banks of Pakistan, including the following:
- National Bank of Pakistan
- Muslim Commercial Bank
- United Bank Ltd.
- Habib Bank Ltd.
- Allied Bank Ltd.
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.
Eligibility Criteria
Financing under the SLS Scheme requires students to fulfil a set of criteria for availing of the student loan. The criteria include the following:
- Students who have obtained admission based on merit and by following the standard procedure in any of the Scheme’s approved Universities/Colleges. A list of approved institutions can be found online.
- The student’s age must not exceed 21 years (for graduation), 31 years (for post-graduation), and 36 years (for PhD) at the time of admission.
- The facility is only applicable to public institutions approved by the Scheme.
- The candidate must have scored 70% marks in his last public examination.
- The students must have studied subjects approved by the SLS scheme (The list can be found online). These include Engineering, Electronics, Oil, Gas, & Petro-Chemical Technology, Agriculture, Medicine, Physics, Biology, Computer Science, Economics, Business Management Sciences and many more.
- Only students who cannot afford to self-finance their education are eligible.
Types of Loan
The loan is available in three types, i.e.:
- For paying the schedule fee. This is paid directly to the institution.
- For meeting boarding expenses of universities & colleges. This does not include meals.
- For purchasing textbooks. This is paid to the student.
The loan can be paid in instalments and structured to include all of the above.
Repayment
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.
Student Loans Offered by Private Banks
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 Education Loan
Askari Bank offers “Askari Education Loan” to students pursuing higher education.
Requirements
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.
MCB- Student Personal Loan
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.
Eligibility Criteria
- You must be a Pakistani citizen with a valid CNIC.
- You must provide a written confirmation from LUMS that you scored at least 50% marks in your last public exam.
- Any LUMS student, including fresh applicants who have received confirmation and are between the ages of 21 and 45, can avail of the loan.
- The maximum debt ratio is 80:20, and financing can only be used for meeting education charges such as on-campus residence, registration, tuition, etc.
Bank Alfalah Personal Loan
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.
Eligibility Criteria
- Any Pakistani or foreign national with a valid CNIC can apply for the loan.
- You should be between the ages of 21 to 60.
- Your income or that of your guardian should be at least PKR. 50,000/-
- You must have a clean credit report.
- Your or your guardian’s repayment capacity will be analysed by the bank and must be sufficient to meet interest and debt-bearing obligations.
