A study abroad education loan is one of the most important
considerations while applying for masters in a foreign land. As soon as
students decide upon their academic platforms, they seek education loans with
or without collateral from reputed financial institutions to meet all the study
expenses that are yet to be incurred during the course of the program.
Education loan without collateral would want a higher profile of Student and
Parent. An Unsecured Education loan is only given at the masters level. In this blog post, we shall study about study
abroad education loans in detail. Take a look!
Types
of Education Loans
You must have understood why
taking a study abroad education loan
is the pre-requisite of studying abroad. Now, allow us to throw some light on
the various sorts of overseas education loans available for our readers.
Basically, there are two sorts of student loans for studying abroad. they're -
Secured Loans and Unsecured Loans. allow us to discuss all of them below.
Unsecured
Student Loan - It's a student loan in which the borrower doesn't
need to pledge any security (collateral). This loan is best for college kids
who prefer taking education loans without collateral. However, it should be
remembered that an unsecured education loan features a higher rate of interest
(as against secured loan) and is harder to be approved. They even have a
shorter repayment period and need certain repayments to be done during the
study period too. Also, a minimum parental income is mandatory for this type of
education loan.
Secured
Student Loan - A secured education loan is one where the
borrower has got to offer tangible or intangible security. The safety is often
within the sort of immovable property, FDs, LIC insurance, land, etc. This type
of loan takes longer for approval because the bank has got to verify all the
documents associated with the safety being pledged. However, it's lower student
loan Interest Rates, longer repayment periods, and no repayment during the
study period. This loan also has higher chances of approval and parental income
isn't a deciding factor when it involves approval.
Options
for Education Loan Without Collateral
|
Features
|
Public Banks
|
Private Banks
|
NBFCs
|
|
Maximum Amount
|
Only up to INR 7.5 Lakhs, which is not sufficient.
|
INR 50 lakhs
|
INR 40 lakhs
|
|
Rate of Interest
|
8% - 10%
|
11.25%-13%
|
12%-14%
|
|
Processing Charges
|
INR 10,000 only
|
0.5% - 2% of the Total Sanction
|
1% - 2% of the Total Sanction
|
|
Number of Colleges Supported
|
Although many colleges are eligible, PSUs don’t offer unsecured
loans for higher amounts
|
More than 200
|
More than 500
|
An unsecured loan is heavily dependent on the student profile and the
parent profile.
The student profile consists of his GPA, competitive exam score,
course, country, University. An unsecured loan provided by private lenders and
NBFCs are limited to students studying Masters courses. Generally only students
studying stem focused programmes or MBA are provided unsecured loans by the
lenders. In case of the parent profile most institutions are looking at a
minimum ITR of 4 lakhs to 8 lakhs. The private banks Require a better parent
profile than compared to NBFCs.
Repayment Tenure - People
choosing unsecured student loans for studying abroad from private banks get 20
years to repay their loans. NBFCs give 10 years to the borrowers to repay the
loan. Avail a customized foreign loan through us as we request the lenders for
an extension within the repayment period on your behalf.
Processing Period - 5-7
days is what private banks got to process unsecured student loans. If the loan
has been applied through Eduloans, and there's a delay from the side of the
lender, we contact them and quicken the sanction of the study abroad education loan.
Expense Coverage - If you
decide for an unsecured loan from an NBFC, you'll get 100% of your expenses
covered, whereas, within the case of personal banks, you'll get 85% of your
expenses covered. Eduloans also makes sure that if a rustic requires you to
point out a selected amount in your checking account as proof of funds for a
visa, that quantity is disbursed before visa.
Income Requirement of
Co-applicant - Student education loans without collateral from private and public banks need the
co-applicant to earn a minimum of INR 35,000 per month. the precise income
requirement is subject to vary consistent with the loan amount. In our
experience, typically, 50% of the income should be capable bear the interest
during the moratorium period for loans from NBFCs and 65% of the income for
loans from banks.
Reasons for Decline - A
personal bank or NBFC decline foreign studies education loan thanks to
inadequate monthly income requirement and poor CIBIL score. However, you are
doing have chances to secure an education loan albeit your CIBIL score is weak.
Eduloans’s counselor can come up with solutions for you to cross the hurdle and
obtain your loan sanctioned.
Different Options for Loans With Collateral
|
Features
|
Public Banks
|
Private Banks
|
NBFCs
|
|
Maximum Amount
|
upto INR 1.5 crore
|
upto INR 60 lacs
|
upto INR 50 lacs
|
|
Rate of Interest
|
8.85%-10.25%
|
11%-13%
|
12%-14%
|
|
Processing Charges
|
INR 11800 (Can be
refundable)
|
No fee for loan above INR 20
lacs and INR 750 on each lac above a loan of INR 20 lacs
|
1%-2% loan amount
|
|
Payment During Study
Period
|
None
|
Simple Interest
|
Simple Interest
|
Repayment
Tenure - There's a 15-year repayment tenure for overseas
education loan from public banks. For NBCFs, it's 10 years, and for personal
banks, it's 20 years.
Processing
Period - It takes public banks 12-15 days (only if applied
via Eduloans, otherwise can take months) to process student education loans
with collateral and 8-10 for personal banks. NBFCs manage to urge the loans
processed in 5-7 days.
Expense
Coverage - there's a 90%-100% coverage of the prices
including living expenses within the case of loans from public banks, but
private banks cover only 86%. Loans from NBFCs offer 100% coverage of expenses.
Reasons
for Decline - The common reason why a public bank will decline
a secured loan is incomplete collateral documents. Incomplete documents and low
CIBIL score are the explanations which private banks cite for rejecting loans.
For NBFCs, CIBIL and low income cause the rejection of loans.
With Edu Loans, you can increase your chances of getting your loan
sanctioned by 50% because of the thorough analysis done by our team. We also
brief you about the funding requirements
and suggest to you only that lender which is most likely to get your loan
approved.
We at Edu loans
carefully assess your profile and requirements for a study abroad education loan.
In case you are looking at an education loan without collateral, we have over
eight lenders who provide the same provided you fit into their eligibility
criteria. We also have international funds or purely funds on the university
and course in which you seek admission. Hence a student looking at an education
loan without collateral has a lot of options. We at Edu Loans can help and guide him for the best available
option that suits his profile. Please reach out to us at www.eduloans.org immediately
to assess your credit for a study abroad education loan.
