When we talk about studying abroad, its charm and potential for career growth are thrilling. At the same time, heavy budgeting spoils our mood. Every year, numerous deserving and meritorious candidates miss the opportunity to fulfil their study abroad dream due to a lack of funding. Education loans are very crucial factors or we can say the backbone of a middle-class student’s study abroad journey. The good news is that education loans are easily available these days. However, it has been found that because of a lack of awareness and expert guidance, students still failed to get their loan applications sanctioned. It can be a complete hustle alone but through these study abroad loan tips from Fly Finance, you can get your education loan processed easily. Here, in this blog, we will decipher things related to education loans from scratch to disbursement.
What is Education Loan?
An education loan is the money you borrow from financial institutions to fund the total cost of your education. Education loans often also include costs apart from tuition including your cost of living, expenses on study materials etc. Especially in the case of foreign education where the cost of study touches millions of rupees, these education loans act as a big saviour for students. Education loans are divided into different categories based on the parameters.
Types of Education Loans
There are mainly two types of education loans available to students to fund their study abroad expenses. One is secured education loans & another is non-secured education loans.
|Parameter||Secured Loan||Non-Secured Loan|
|Rate of Interest||Low||High|
Secured vs Unsecured Loans
|Parameter||Secured Education Loans||Non-Secured Education Loans|
|Collateral||An education loan which is supported by any collateral comes under the category of secured loans.||An education loan which is free from any collateral comes under the category of non-secured loans.|
|Rate of Interest||Financial institutions charge a low rate of interest in the case of secured loans.||Financial institutions charge a high rate of interest.|
|Loan Amount||The usually bigger loan amount is granted because of collateral.||Comparatively lower loan amount is granted.|
|Approval Chances||Loan approval chances are comparatively higher.||Loan approval chances are comparatively lower.|
What can be collateral and what cannot?
Loan providers usually set fixed guidelines around what can be used as collateral. Here are some points to keep in mind.
- Usually, lenders accept only residential property and fixed deposits as collateral.
- Residential property being used as collateral should lie in a municipality location.
- Lenders do not accept agricultural land as collateral.
Also Read: How to Get an Education Loan to Study Abroad
Rate of Interest
The rate of interest in the case of secured loans is low as compared to non-secured loans.
|Loan Category||Rate of Interest|
|Secured Loans||8.5% – 11.0%|
|Non-Secured Loans||11.0% – 14%|
Who can be a Co-Applicant?
Co-applicant or Co-borrower is usually an of the education loan amount on the behalf of the applicant. Lenders prefer parents as co-applicant. If parents cannot be co-applicant, brothers or sisters or first blood relatives can be co-applicants.
Documents Required for Education Loans
The below-mentioned documents are mandatory to initiate the loan application process.
- Student’s academics transcripts
- Work Experience of student
- Annual financial statements (latest 2 years for Applicant and co-applicant)
- Complete Know Your Customers (KYC)
Education Loan Process Cycle
Here are the steps involved in the disbursement of an education loan.
- Fly Finance loan experts call the students who need education loans. On the introduction call, after confirmation from the students, counsellors ask the students for the mandatory documents.
- After receiving the required documents, the finance team sends the document to the QC (Quality Compliance) team for the verification process.
- After the document verification student documents are sent to the eligible lender.
- Lender evaluates the student profile thoroughly and shares their final decision on the application. Turn around time or TAT of this is usually 10-15 days.
- In the case of approved applications, the next step is the payment of processing fees by the students which is usually 1% of the approved loan amount.
- After payment of the processing fee, the Student gets a disbursement agreement.
- Disbursement happens within 7 working days post receipt of the complete disbursement agreement.
Also Read: 5 Things to Keep in Mind to Apply for an Education Loan
The details of the lenders are mentioned below:
- AVANSE Financial Services
- Prodigy Finance
- ICICI Bank
- Mpower Financing
- HDFC Credila
- IDFC Bank
- Axis Bank
Why Apply for Study Abroad Loan through Fly finance?
- Fly Finance offers its students one point of contact for all lenders.
- Special discounted rate of interest for Leverage Edu students.
- Smooth hustle-free services with an impressive success rate.
- Dedicated loan experts
- Zero Service Fee
- Multiple Loan Providers
- Collateral Free Loans
Loan Repayment Routes
There are multiple ways through which students can repay the loan amount or interest rate or both based on their affordability. Some common loan repayment routes are mentioned below:
- Simple Interest
- Direct EMI
- Full Moratorium
If you want to get into your dream course in a high-ranked global university, you’ll need more than just good grades; you’ll also need flawless application because the competition is fierce. You may enlist the assistance of Fly Finance specialists to assist you with the application process so you can realise your goals. Call us immediately at 1800 57 2000 for a free 30-minute counselling session.