In the ever-changing landscape of overseas education, one of the most significant demands is a smooth educational journey with no concern about financial limitations. In this condition, one of the best solutions available is a non-collateral education loan that offers a pathway to study abroad aspirants to access funds without pledging any asset.
However, aspiring learners face numerous considerations that may overwhelm them when applying for a non-collateral loan. This article highlights the crucial factors that should be considered when applying for a non-collateral education loan for USA, UK, Australia, France, or any other study destination academic pursuits.
Factors to Keep in Mind When Applying for a Non-Collateral Education Loan
Non-collateral education loans make it possible for students from different backgrounds to pursue their dream of studying even without any assets or security. Find below the key elements of this loan type that one must go through before applying for it.
-
Requirement of a Co-Applicant
See if the potential lender requires a co-applicant to process your overseas education loan. When applying for non-collateral education loans, most private banks demand a co-applicant for loan approval and incorporate factors such as the co-applicants credit score, income proof (for business), Form -16 (for full-time employment), existing obligations, etc. However, most international lenders process a non-collateral education loan solely based on the student’s academic profile.
-
Comparison of the Loan Amount
Compare the maximum loan amounts lenders offer in a non-collateral education loan. Lenders incorporate other factors when analyzing a non-collateral education loan, as any asset is unavailable. If the lender requires no co-applicants, the factors evaluated are your educational background, the courses you are applying for, the institutions you are applying to, course duration, etc. As a borrower, you must compare the loan amounts different lenders offer and decide accordingly.
-
Verifying the Interest Rate
Understanding the interest rate associated with education loans is important. Non collateral education loans for abroad studies often have different interest rates, although this might vary based on the type of lender you choose. Before picking a lender, consider the difference in interest rates offered by various lenders which differ across government banks, private banks, NBFCs, international lenders, etc. The difference can be attributed to multiple reasons, including your academic profile, the financial status of your co-applicant (if applicable), etc.
-
Loan Tenure
Loan tenures refer to the duration you are expected to repay the non-collateral education loan. It plays a significant role in determining your monthly payment and the overall cost of the loan. Longer tenure typically results in lower monthly payments but may lead to higher total interest payments over time. On the other hand, shorter tenure requires higher monthly payments but can save money on the interest in the long run. When considering the loan tenure, it is essential to align it with your financial capability to avoid any payment hassles in the future.
-
Application Process and Sanctioning
It would help if you looked for a lender that offers easy-to-meet eligibility criteria and a hassle-free documentation process. With online loan applications’ availability, the application process has become faster and requires minimal time. If you have not finalized a lender, compare the processing time of different lenders without collateral and pick the borrower that best suits your needs and sanctions loan without an extended waiting period.
These were crucial elements to undertake when applying for a non-collateral education loan. Other factors, such as processing fees, penalty charges for missed EMIs, and foreclosure charges, must also be considered. Furthermore, look for hidden charges such as establishment or direct debit fees and compare the differences between the lenders.
You can also connect with education loan advisors for more information on overseas education loans for UK without collateral or any other destination you aim for. These experts help simplify the excruciating process of applying for collateral or a non-collateral education loan by streamlining all the steps for you.
