Business | Your Money

It is better to start saving early for college education

It is always good to shop around for the cheapest loan available

  • By Gaurav Ghose, Financial Features Editor
  • Published: 21:00 July 27, 2013
  • Gulf News

Higher education, more so abroad, is expensive. It is important for parents to start saving for their child’s college education as early as possible.

“Hopefully mum and dad set aside money regularly for years in anticipation, perhaps in a regular savings plan, so they have sufficient to fund the whole exercise, says Steve Gregory, partner at Dubai-based Holborn Assets. “Look for the cheapest loan available, and make sure you shop around. Usually the cheapest is from government but not everyone will be entitled to claim it.”

Gulf News spoke with Majdi Abd Al Muhdi, head of corporate communications at Abu Dhabi Commercial Bank (ADCB), on the terms and conditions of student loans:

What are your criteria for an educational loan?

The loan applicant must have a minimum income of Dh8,000 and only needs to transfer the salary to ADCB if the loan amount exceeds Dh150,000. For loan amounts are less there is no need to transfer the salary to ADCB. The interest rates are in the range of 10 to 14 per cent on reducing balance depending on the profile of the customer.

What documents do you need?

The customer needs to provide three months’ bank statement, proof of salary, passport and visa copy, and invoice from the education institute proving the end use of the loan is for education.

What are the repayment criteria? Can applicants top up their loans?

The loan applicant can repay the loan in maximum of 48 months and minimum of six months. The loan applicant gets 30 to 60 days from the date of disbursement to start repayment. They cannot top up their loans but can apply for multiple education loans.

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