Types of Education Loans for Abroad Studies

A degree from a foreign university gives an unparalleled edge in career growth. It acts like a trampoline and provides you kickstart that very few Indian colleges can. It is no surprise that huge numbers of students aspire for higher education abroad. But overseas studies come at a high cost that is not possible to bear for all. Abroad education loans become a savior in such a situation and help students fund their studies abroad. However, understanding the education loan options and choosing the right option can be a herculean task.

Students and parents need to do their homework or get in touch with an abroad education counselor to comprehend the education loan products better. The first step towards understanding it is knowing the types of education loans for abroad studies. From collateral-free loans to those with specific eligibility criteria, the landscape of abroad education loans offers a range of choices to suit individual preferences and circumstances. Let's delve into the diverse types of loans that pave the way for global education pursuits.

Types of Collateral?

The types of collateral accepted for education loans can vary among lenders. Generally, education loans are considered unsecured loans, meaning they do not require collateral. However, in some cases, especially for large loan amounts, lenders may request collateral to secure the loan. Here are some types of collateral that could be considered for education loans:

• Real Estate: Property, such as a house or land, may be accepted as collateral. The lender may place a lien on the property, and if the borrower defaults on the loan, the lender can take possession of the property.
• Financial Assets: Investments, savings accounts, or other financial instruments may serve as collateral. These could include stocks, bonds, or certificates of deposit.
• Guarantor or Co-Signer: While not traditional collateral, having a guarantor or co-signer with a strong financial standing can sometimes be a requirement for obtaining an education loan.

It's important to note that not all education loans require collateral, and many are granted based on the borrower's creditworthiness and future earning potential. Before applying for a loan, it's advisable to carefully review the terms and conditions set by the lender, including whether collateral is required and the specific types of assets accepted.

Types of Education Loans Based on Collateral

• Secured Education Loans: A secured education loan or a loan with collateral is one where the applicant has to offer tangible or intangible security. The security pledged to the lender can be in the form of immovable property, Fixed Deposit, LIC insurance policy, etc. This form of loan takes longer for approval as the bank has to verify all the documents related to the collateral being pledged. Nonetheless, it has lower education loan interest rates, longer repayment periods, and no repayment during the study period. This education loan also has a higher chance of being approved and parental income is not a determinant when it comes to loan approval.

To know more about Types of Collateral Security Acceptable for an Education Loan, click here.

• Unsecured Education Loans: In unsecured education loans, the applicant does not have to pledge any collateral. This type of education loan is best for students who do not have any security to offer. However, it should be kept in mind that an unsecured education loan has a higher rate of interest (as compared to secured loans) and is harder to get approved. Unsecured education loans also have a shorter repayment period and require some repayments to be done during the study period as well. In addition to this, a minimum co-applicant income is mandatory for education loans without collateral.

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Education Loan Types Based on Lenders

Avoid all the hurdles of abroad education financing by simply contacting GyanDhan. Enjoy the benefit from our streamlined education loan process and get an overseas education loan from the comfort of your home. We offer students free expert help in getting education loans to study abroad. Our education loan counselors understand the students’ academic and financial profiles and then tell them about the best loan options available for them. We have partnerships with top lenders in the market, including public sector banks, private banks, NBFCs, and international lenders. With GyanDhan, you can keep all your worries about your abroad education loan application aside. To know if you are eligible for an overseas education loan, check your loan eligibility now!

Read Also:

• Education Loan EMI Calculator
• Moratorium Period In Education Loan
• Floating Interest Rates: A Complete Overview
• Education Loan for Abroad Studies without Collateral
• Vidyalakshmi Education Loan
• Documents Required for Education Loan