Education loans for abroad studies, we can say, are a necessity of the hour. An education loan abroad supports the dream of aspirants by providing the required financial assistance to manage all the expenses. A foreign education loans cover all the necessary expenses, such as travel, living, and other relevant expenses other than the college and university fees. Students who are applying for or have previously applied for an education loan are aware of loan terms such as collateral and non-collateral loans. Collateral is a term used for secured loans, while non-collateral is for an unsecured loan.
Secured loans: Students need to pledge personal property against the loan amount before they can avail of the loan. Tangible assets like a house, non-agricultural land, and intangible assets like insurance policies and fixed deposits are eligible assets for taking out secured loans.
Unsecured loans: A borrower can get the loan without any security. Instead of security or personal assets, the borrower needs to take out loan insurance; this is basically to safeguard the interest of the lender in case the borrower fails to repay the loan.
Abroad education loans have emerged as a great solution to all the problems related to financing overseas education. But not all students have collateral to pledge for a loan; this certainly does not mean that such students will leave their dreams behind. Unsecured loans or non-collateral-based loans are a great option for such students.
Non-collateral loans are straightforward and simple to obtain. You don't need to pledge your property, insurance, or bonds as security to obtain a non-collateral loan. Non-collateral loans are simple to obtain compared to a collateral loan, which is difficult and time-consuming. With the advent of non-collateral loans, it is now possible for students to achieve their goals without sacrificing their dreams while also maintaining a stress-free lifestyle.
Below are a few benefits of a non-collateral loan:
A student must consider all of the factors that make him or her a good fit for the criteria set by lending institutions to lend an unsecured loan before applying anywhere.
Academic Profile of the Applicant: The most important value is the applicant's profile. It is not required to have an excellent academic profile to be eligible for non-collateral loans. Students with first-division marks or an average academic record can also apply for the unsecured education loan abroad. However, students must have a minimum of 60% in their graduation, 10th, and 12th grades, and no more than three backlogs should be there to be eligible for a loan.
Courses/Degree: The courses and degrees chosen by the student also play an important role in making their application more favourable. It is an undeniable fact that students who apply to pursue higher education in STEM courses are preferred by lenders over courses such as aviation and courses related to the arts or public policy.
Gap in Education: Any gaps in education or breaks taken by the student should be disclosed to the bank in a written application.
University: Banks have their own list of universities to which they can lend unsecured loans. Students planning to attend one of these universities will be given preference.
Countries applied by the applicant: This is one of the most important factors because lenders have a limited number of countries in which they can grant loans to applicants. The United Kingdom, the United States, Germany, Ireland, and Canada are the most popular countries where students prefer to study.
Co-applicant and income criteria: A bank will always prefer those candidates who have a co-applicant. Also, the CIBIL score of the co-applicant must be more than 650. In the event they are in default on any past payments and have a poor CIBIL score, it may result in the disapproval of their loan application. Having a good CIBIL score makes the profile of the candidate more creditworthy, thus increasing the chances for the approval of their loan application.
Documentation is a necessary part of any loan application. An applicant is required to submit all the required documents listed by the banks. For unsecured loan applications, banks have categorised the documents to be given by the salaried co-applicants as academic and required for KYC.
The applicant's and co-financial applicant's records, along with KYC information, are the most important, as was already established. However, a lender is still permitted to request from the applicants the papers they deem essential.
Without experiencing any mental strain due to financial constraints, students are now better able to pursue their aspirations of receiving an education overseas thanks to non-collateral loans. With the advent of non-collateral loans, it is now possible for students to achieve their goals without compromising their dreams while maintaining stress-free living conditions at the same time. Still, if you need any assistance with foreign education loan, then contact the Education Loan Guru. They will help you to apply for education loan.
By Education Loan Guru
