Guidelines to consider while applying for an Overseas Unsecured Education Loan
Finalizing the university for your higher education must have been a tricky task as there are multiple viable options available. But you have finally done it. Congratulations! You are one-step closer to your dream university. Now, it is time for you to choose a suitable funding option. Getting a loan can be one such option that can be considered for funding your overseas education. We understand that loan processes are lengthy and super confusing. Hence, to make it simpler, we are here to share some guidelines that should be considered while applying for an overseas education loan.
Let us first know the two options of loan-availability for overseas education aspirants
First one is Secured Loans that is also called as Collateral Education Loan and the other one is Unsecured Loans that is also termed as Collateral Free Education Loan.
Secured Loans are the types of loans where the bank asks for a security against the loan. This security can be a movable asset such as a fixed deposit, LIC policy, govt. bonds or immovable asset like a flat, individual house, land, shop, provided the immovable asset should be located in an urban area.
Unsecured Loans are those loans that is given by any private or nationalized bank without pleading any security.
Although a lot of factors should be considered while choosing a suitable loan option, a student can go for any one of the available loan options as per the convenience of the student itself.
In this blog, we are going to share some insights that shall be considered while applying for Unsecured Education Loan.
Checkpoints to be considered while applying for Unsecured Education Loan
Let us know the parameters that should be kept in mind while applying for loan for undergraduate level program:
For applying for a loan for bachelor’s degree, there is a single loan option available for private bank i.e. of ICICI Bank, provided the chosen university should be listed with ICICI as prime university listing. The direct EMI option will be applicable to the students.
For undergraduate level courses, student can reach out to international lenders like MPower Finance for higher education loans provided the chosen university should be listed with the international lender. The international lenders will provide loan for third and fourth year whereas student’s parents should be required to fund the course for first and second year.
A non-banking financial institution (NBFC) is another option for getting an overseas education loan for bachelor degree. To apply for this type of loan, parents’ monthly income should be of minimum one-lakh.
Are Unsecured loans applicable for all streams for masters program?
Unfortunately, no. Unsecured loans are given only to the students who are going for science, technology, engineering, mathematics, and management field-related programs.
Unsecured loans will not be applicable to the students who are applying for undergraduate diploma, pathway, foundation, integrated courses leading to masters degree programs.
Academic conditions to remember while applying for unsecured loans
For USA, the GRE score and TOEFL score should be more than 300 and 90 respectively.
Students should have passed 10th, 12th, and graduation in first class.
Student should have minimum number of backlogs with no academic gap.
Financial criterion considered while applying for Unsecured Loans
Parents’ income should be more than 35,000 per month excluding other expenses and liabilities.
If parents are running any household business, that busines should be registered.
Loan cannot be given if the parent’s source of income is via agricultural or rent.
Common conditions to be considered for Unsecured Loans
Here are some common parameters every student must know if he/she is looking to apply for Unsecured Loans:
Parents should have a house on their name.
Parent’s CIBIL score should be above 700 with strong credit history.
Student's age should not be more than 28 years.
Student should not have any type of loan on himself/herself.
Student’s residence should come under serviceable area.
Apart from getting the loan sanctioned quickly, Unsecured Loans has numerous advantages. We hope that you have got some clarity on the guidelines that need to be followed while applying for unsecured loans. If you wish to explore more funding options for your higher education, do refer to our rest of the blogs.