An education loan is no longer a choice but a necessity for most students aspiring to study abroad. Although there are several financing options like banks, private lenders, and NBFCs open, it is not an easy feat to get the loan sanctioned.
There are numerous criteria to meet that confuse the applicant.
In this blog, we will go through some of the important tips for maximizing your chances of getting approved for an abroad education loan so that the loan journey remains smooth, quick, and easy.
10 tips to consider before applying for an abroad education loans
1. Study courses and university
Financial institutions put a great deal of emphasis on the course a student wants to pursue and the university they have been admitted to.
The most important tip for maximizing your chances of getting approved for an abroad education loan is that the study course should be accredited otherwise, the loan application can be rejected.
STEM courses like mathematics, engineering, and science have higher earning potential compared to arts, humanities, or commerce; hence the chances of a loan being approved are high.
If you are considering the other courses, make sure you balance them out with a good and reputed university. It should be a top-notch place to study with a good reputation or ranking.
2. Academic history of the applicant
Academic history matters as it will give a fair idea of the student’s capabilities, whether they are serious about their studies, and do they have the intelligence to get exceptional marks.
A student with consistently good grades has a better chance of loan approval than an average student or an applicant with an academic gap or backlog.
Applicants seeking an overseas education should be serious about their studies from the word go, as it will improve their chances of loan approval.
3. Applicant and co-applicants age
Financial institutions generally do not have an age limit for a secured loan, but for unsecured loans, the maximum age limit is 28 years.
The co-applicant should not be close to the retirement age as lenders are hesitant in sanctioning them the loan. Applicants should be aware of the age criteria and apply for the loan accordingly.
4. Genuine and complete documents
Fake or incomplete documents will result in the cancellation of the loan application; hence never try it. Read the guidelines carefully and submit each document as per the requirement.
These include the loan application form, academic records and mark sheet, entrance test scores, address and identity proof like Aadhaar and PAN, admission letter from the university, and statement of costs.
5. Good CIBIL score
CIBIL scores of the applicant and the co-applicant matter as a good score suggests that the previous loans have been paid on time and the chances of getting back the loaned money are high.
A bad score means a delay in repayment or a cheque bounce. A good score will increase the chance of securing a loan; hence applicants should be conscious of maintaining a good CIBIL score from the beginning.
6. Too many loan inquiries are harmful
Students should not apply to numerous financial institutions as they, in turn, inquire with CIBIL Agency which mentions the number of inquiries in the credit report.
This has an impact on the CIBIL score; thus, the applicants must research beforehand and apply for the loan at the appropriate place and at the right time after going through all the pros and cons.
7. Must fulfill the income criteria
Applicants must find out the minimum income required by the lender and then fill out the loan application; otherwise, it will be rejected.
8. The repaying capacity
Lenders will look at the repaying capacity of the applicant and their total income. In case the loan is passed and is mid-way, and the co-applicant has lost or left their job, the loan can still get rejected.
9. Types of collateral
Financial institutions have a list that defines which properties are considered collateral and which are not; hence applicants must go through the list before naming that property as collateral.
10. Meet the set policy
Every lender has a specific set of rules, and the applicant must go through them in detail and then fill out the form and submit the required documents.
Conclusion
Lots of students apply for an education loan every year, but only a handful of them manage to get it sanctioned. In most cases, the applicants are not even aware of the true reason for the loan rejection.
Knowing about the above-mentioned tips can maximize your chances of getting approved for an abroad education loan.
Reach out to the counselors or experts on the Edufund app for an abroad education loan, and they will guide you through the whole process in quick and easy steps.
