Can we borrow an abroad education loan from multiple lenders?

Many factors go into making a higher education process successful. One of the most important factors in making the process of studying abroad simple is the proper arrangement of finances. However, there are certain individuals who might lack funds, so a wide range of lenders offer loans for education abroad. When students have access to a variety of funding alternatives for higher education, they frequently plan to use the better ones.

This leads a lot of students to believe that borrowing a study loan from various lenders is acceptable when they are studying abroad. Many of these students are aware that while they are permitted to sanction their loan for their international studies from two distinct lenders, the rules and regulations only permit them to receive payment from one of them.

Why do students choose different lenders for study abroad loans?

In recent years, a tremendous increase has been noticed in the number of students flying to different destinations abroad to pursue their higher education. This also shows an increase in the number of students applying for study abroad loans to finance their education abroad without any hustle. This advent has paved the way for the emergence of multiple lenders in the Indian market, providing students with flexible and varied options in abroad education loans, making them an easily available option. Students prefer to get the best deal on their education loan to study abroad.

Students find unsecured loans more feasible and easier to apply for in comparison to secured loans because they are not required to provide any security to the lender. Aspirants who are in dire need of an education loan abroad often find unsecured loans to be a go-to option to finance their higher education. Unsecured loans are majorly sanctioned by private banks and NBFCs, and they ensure to complete the entire education loan process from start to finish within 3 to 7 working days only.

What happens if you apply to multiple lenders for a study abroad loan?

It depends on the requirements of the applicant; some try to apply for an unsecured loan and some for secured loans from different lenders. A secured loan from a public bank is largely used to manage their living expenses and for tuition fees. However, for other expenses, they approach the NBFCs, though this is unacceptable.

Even some students have a query as to whether they are eligible to apply for an education loan for the same course from multiple lenders. To answer this, we have enlisted all the things that a bank follows for lending study abroad loans, so keep that in mind while accepting loans from various lenders:

• The financial institution's first step is to check the CIBIL scores of both applicants and co-applicants, and if they are qualified, the banks will move on to the next stage of the loan application. The bank will forward your loan application to another department for the next step of verification and profile assessment.

• If your profile is assessed and meets all the eligibility parameters, the banks will definitely provide you with the loan sanction letter as approval for your loan. If any discrepancy is found at any stage of the loan application, in terms of the income of the co-applicant being insufficient, defaulting on earlier loan payments, or your academic profile being unable to match the eligibility requirements, these factors can lead to the rejection of your loan application. But to make it clear, applying to multiple lenders for the same course will not impact your loan application.

What procedure will other lenders follow while reviewing your loan application?

• The various lenders must adhere to the same process; they will also examine the applicant's CIBIL score and approve it for the following stage. It is important to keep in mind that, till this stage, the CIBIL score of the applicant is under the assessment stage only. Once the verification is complete by both the lender and the borrower, an approval and sanction letter will be provided to the applicant as proof of their loan sanction. It is completely possible that multiple lenders will provide you with the sanction letter, but the real picture is still about to start.
• The foreign education loan application has various phases, including a profile assessment of the applicant and document verification; these are the common steps followed by almost every lender. But the loan disbursement changes the whole scenario, as before the loan disbursement, both the applicant and their co-applicant had to co-sign the loan agreement and complete the other loan formalities. These formalities an individual can do only with a single lender and not with multiple ones. Once the applicant and co-applicant sign the loan agreement with any lender, whether bank 1 or bank 2, they will soon get the loan amount disbursed by the lender in their account.
• This activity will reflect in the credit report of the borrower, and after this, another lender will have the right to immediately reject your loan application.

It is clear from the above events that applicants can apply for education loans with multiple lenders without any difficulty to get the best deal for their requirements. However, only one lender would be allowed to disburse the loan amount.

If you also wish to apply for an education loan to study abroad, then contact the education loan guru.