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All You Need to Know About Study Abroad Unsecured Education Loan

Posted by eduloans on July 17th, 2020

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 master’s 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 aa 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 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 study abroad education loan.

Also See: Education Loan, Study Abroad, Unsecured Education, Overseas Education, Loan, Education, Study

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