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4 Excellent Factors of Education Loan Without Collateral

4 Excellent Factors of Education Loan Without Collateral

Education loan is always termed as a ‘blessed burden’ since it makes expensive studies possible for the time being but gets on to your chest for years once you start repaying it. What haunts the most about overseas education loans is the extravagant interest rates that typically double up the amount which is to be repaid at the end. This factor makes it a much debatable topic for students aspiring to study abroad in top universities but it becomes more difficult when the applicants are asked to put their assets as collateral with the financial institutions to reduce the risk involved in lending big money.

Almost all the banks deny to pay education loans without collateral for heavy amounts since the students do not have any source of income then or they will have to quit their job for taking up higher education. To recover their losses in the event when the applicants are unable to pay the loan, banks keep security which can be seized. But there are many organizations that provide education loans without collateral on the basis of student’s academic backgrounds and sometimes a good consignor profile. The Student profile is linked to the course, University and Country they are admitted. Most lenders have a preferential list universities, assuming they will soon get a dedicated job. In this blog post, we shall be discussing a few points you should know before seeking an education loan without collateral. Take a look!

● According to guidelines set by RBI, all banks have provisions to supply education loans without collateral up to INR 7.5 lakhs if the borrower comes up with a co-signer. If you would like to avail of an education loan that exceeds the amount of INR 7.5 lakhs, NBFCs (Non-Banking Finance Corporations) provide loans up to INR 20 lakhs without security.

● Your profile matters the foremost if you can't provide collateral. Banks consider your employability potential which is predicated on your academic record, University’s reputation, standardized test score (GRE/GMAT), co-borrowers salary, etc. Banks will increase their limit of study loan only they’re certain of your job stability. Banks generally provide unsecured loans above Rs 7.5 lakhs for Ivy League colleges (in case of abroad) and premier institutions like IIMs and IITs (in case of India).

● Interest rate increases by 1-2% if collateral isn't provided but the method of availing the loan is quicker because the banks don’t need to verify the collateral.

● Interest paid on Education Loans are eligible for Tax Benefits under Section 80E. But beware! Not all unsecured loans are eligible for an equivalent.

The Bottom Line!

Although overseas education loan can be an expensive affair, in the long run, they can surely help you realize your dreams and make you capable enough to repay the amount. There are many financial institutions providing schemes that can be helpful and save you money.

● NBFC provides you Non collateral loan based on your profile and the profile of your consignor. They are very happy in case you are going to a STEM focused Masters program in a globally ranked University. They do consider your GRE score as well while deciding the amount of non collateral loan you can be issued.

● We work with US Funds Namely - Prodigy Finance, Leap finance & M power who provide unsecured loans purely based on the University admit of the student. They all fund MBA majorly as well as STEM focused Masters program of global ranked Universities

● In case the student is looking to go to the US , Banks in US fund International students without a consignor provided they have a US guarantor.

But to avail of these schemes, it is important to submit all the right documents at the time and be extremely careful throughout the process. To help aspiring candidates get through the entire process at one go, we at Edulaons have built a team of excellent counselors who help students fill out the application form and get the best loans possible in their case. Please ensure you register at Eduloans and take benefit of our services.

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