If you are planning to opt for an education loan to achieve your study abroad dream, you must understand various aspects before applying for one. You must select from two types of student loans, secured (with collateral) and unsecured (without collateral). Let’s understand the meaning of these terms and the procedure of non-collateral student loans better. So, let’s dive in.

Key Highlights

• Types of student loans
  • Secured education loan (with collateral)
  • Non-collateral education loan for abroad
• Process for non-collateral education loans
  • Thorough research before opting for an education loan for study abroad
    • Eligibility criteria for unsecured study abroad loan
  • Documents required for non-collateral education loan
  • Application process
  • FAQs

Types of student loans

• Secured education loan (with collateral)
  If you have an asset such as residential property and are willing to offer it to the financial institution as a security against the loan, it is a secured loan. This security in the form of an asset you offer to your lender is known as collateral.
• Non-collateral education loan for abroad
  What if you don’t have any collateral or are not willing to offer? Does it mean you will not get any education loan? Well, don’t be disheartened. In this case, an unsecured loan is for you. Many financial institutions offer unsecured (non-collateral) education loans too. You can choose between secured and unsecured education loans based on your preference and financial requirement.

So, let’s understand the process for non-collateral education loans

Thorough research before opting for an education loan for study abroad

You must carry out thorough research to find various aspects of study loans. Although interest rates are important, you must not forget other factors. In an attempt to search for an education loan with a low-interest rate, you may end up with the wrong loan provider or a fraud app. Therefore, consider the following aspects when opting for a student loan.

• Costs covered
• Disbursal time
• Customer support
• Customer testimonials
• Education loan rate of interest
• Repayment options
• Other features and benefits extended to you by the lender

Eligibility criteria for unsecured study abroad loan
Checking the eligibility criteria of your loan provider will be part of the research. Please check the lender-specific eligibility criteria. Here are the basic eligibility criteria that you meet to apply for a student loan.

For students

• The student must be an Indian citizen
• The age should be 18 or over 18
• Should have confirmed admission before the final disbursal
• Should apply with a co-applicant who earns in India

For co-borrower

• Should be an Indian citizen
• Can be a parent, legal guardian, sibling or other blood relative
• Must have a bank account in India that allows them to sign cheques
• Co-signer will be a primary debtor

Documents required for non-collateral education loan

Ensure all your documents are in place to eliminate any chances of delay or rejection of a student loan.
Here is the list of important documents that you will need

For students

• Academic transcripts
• Student KYC
• Aadhar card
• Birth certificate
• Fee Structure
• 2 Colour Passport-sized Photos
• Photo ID

For co-applicant

• PAN card
• Co-borrower KYC and income details such as income proof and bank statement
• 2 Colour Passport-sized Photos
• Photo ID
• Relationship Proof   

Application process

Once you have finalised your education loan provider, you can initiate the application process. Financial institutions have revolutionised the education loan application process in this tech-centric world. Therefore, student-centric lenders such as Avanse Financial Services have moved the process completely online.
So, follow these easy steps to apply for an education loan

• Fill out an online education loan application form
• Send the necessary documents
• Receive the loan amount, if you meet the criteria

FAQs

Will I have to arrange margin money for a non-collateral education loan?
Margin money is like a down payment. So, margin money is the contribution you have to arrange to fund your education. Depending on the lender, you may or may not have to organise the margin money.
For instance, at Avanse Financial Services, we provide 100% finance so that you can focus on your education better. We provide loans for students that cover the holistic cost of education, including tuition fees, accommodation costs, living expenses, travelling expenses, the cost of learning devices and other education-related expenses.

What will be the parameters based on which my application for an unsecured education loan will be evaluated?
Your lender will examine aspects such as:

• Standardised test scores
• Academic scores
• English proficiency exam scores
• University ranking
• Demand for the courses
• A gap in the academic life

So, with this information, you can start your student loan planning. If you need assistance, please remember all you have to do is connect with us. We will be glad to assist you on your academic journey. We wish you all the best!