Studying abroad gives an unparalleled exposure as the stamp of a foreign university and the exposure gained by it is at a next level, eventually putting a trampoline impact for your career. This is one of the prime reasons why a greater number of students are opting for higher education abroad. However, it is also a known fact that the international degrees and courses are expensive. This is where the need of an education loan comes upfront.
In India, as we all know, there are 2 types of overseas education loan available. On the same context when the study abroad aspirants plan to avail a foreign education loan, they generally opt for education loans without collateral due to its super-fast processing time.
However, it is essential to understand that the terms and conditions of an education loan determines the quality of any study abroad loan scheme. Let us consider one of the most popular study abroad destination for its expenditure – US. It generally costs INR 30 Lakhs to INR 1 Cr. to pursue, including tuition, fees, room, and board, can cost or even more for top universities. While banks are keen on sanctioning higher-sized loans, the stats indicate that, they do so only for capable students.
So, now let us understand how to make sure that your loan application isn't lost in the pool of uncountable applicants?
Read on to know how to make your application rejection-proof?
Well choose the right loan option that fits perfectly with your profile the answer is simple as this. for Indian students aspiring to study abroad let’s check what are the loan options available?
We dive into this topic today.
What is Unsecured Education Loan?
An unsecured education loan is also known as the collateral free education loan for abroad studies that doesn’t ask the borrower to pledge any security.
- Unsecured education loans have one more advantage besides the non-requirement of collateral that’s their paperwork is less complicated and thus processing time is swift.
- The interest rates of loans without collateral are higher since the risk that the financial institution takes is greater.
- A co-applicant or co-signer is required for these loans.
- The co-applicant’s income and CIBIL score becomes the basis of the loan sanctioned.
What is Secured Education Loan?
Similarly secured loans are the ones which need collateral to be pledged in order to avail the loan.
The said that secured loans are safer and better alternative if you have suitable collateral. Check the four reasons stating why:
Having It saves money in the long run as they charge a lesser interest rate.
- INR 1.5 Crore can be availed as a loan amount which is a little tricky in case of loan without collateral property.
- Longer and sometimes flexible repayment time.
- The loan help you save on taxes as it comes with tax-deductible benefits.
This proves that there are merits and drawbacks in both the types of study loans.
The Choice Between Lenders -
Next to help you out with the lenders generally people prefer the below lenders in the decreasing order since it is considered to be right.
- Public Bank for having the lowest interest rates
- Private Bank for having the lower interest rates than NBFCs
- NBFC as they have higher rates than public and private banks but in Indian Currency
- International player which is generally not recommended as the loans are sanctioned in other currency
This is an analysed sum up of finding the right education loan scheme.
So, now the decision to avail unsecured overseas education loan or secured overseas education loan can be easily taken.
