Guidelines to Consider while applying for an Overseas Unsecured Education Loan

Finalising the university for your higher education must have been a tricky task as multiple viable options are 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. There are two kinds of overseas education loans, namely Secured Loans also called Collateral Education loans, and the other one is Unsecured Loans that is also termed Collateral Free Education loans.

Hence, to make it simpler, we are here to share some guidelines that should be considered while applying for an overseas education loan. Keep reading to know more about the important factors before you commence your education loan for abroad studies process.

About Unsecured Education Loan for Abroad Studies

Unsecured Loans are those loans that are given without pleading any security. While these loans were offered mostly by private banks, NBFCs & international lenders, now even nationalised banks are offering unsecured education loans for abroad studies.

As these loans don’t require any collateral security, there are certain important factors that you must fulfil to get a successful loan sanction. In this article, we are going to share some insights that should be considered while applying for Unsecured Education Loan.

Unsecured Education Loan for Abroad: Guidelines for Bachelor’s Degrees

Every bank and financial institution has different guidelines for various levels of study. Some of the important parameters that should be kept in mind while applying for a loan for a bachelor’s level program are listed below.

• Private Banks: Many of the leading private banks offer unsecured education loans for abroad of up to INR 75 Lakhs for Prime Listed Universities. All you need to have is a confirmed admission letter from any of the universities enlisted by the bank, a good academic profile and a co-applicant with ITR of INR 15 lakhs & above. 

• NBFCs: A non-banking financial institution (NBFC) is another great option for getting an overseas education loan for a bachelor's degree. They offer up to INR 50 Lakhs for Prime Listed Universities. To apply for this type of loan, parents’ monthly income should be of minimum one-lakh.

• International Lenders: These lenders mostly offer loans for master’s degrees, but a few do provide unsecured education loans for abroad at the bachelor's level as well. However, they fund for the 3rd and 4th year of study. For the 1st and 2nd year of study, parents have to fund the education. Applicants can get up to USD 100,000 for two years if the university is listed with an international lender.

Now that we know the guidelines for bachelor’s degrees, going further let’s check the details for masters levels.

Unsecured Education Loan for Abroad: Guidelines for Master’s Degrees

For a master’s degree, there is a wider range of options for unsecured education loans for abroad. However, keep in mind that these unsecured loans will not apply to the students who are applying for undergraduate diplomas, pathways, foundation, or integrated courses leading to master's degree programs.

Also, most lenders offer unsecured loans to students who are going for Science, Technology, Engineering, Mathematics, and Management field-related programs.

• Nationalised Banks: Under their exclusive schemes for unsecured education loans for abroad studies, a few of the leading nationalised banks offer a substantial loan amount of up to INR 50 Lakhs for Top Ranked Universities.

• Private Banks: For master’s degrees, private banks offer unsecured education loans for abroad of up to INR 75 Lakhs for Prime Listed Universities. In most cases, they provide 100% funding.

• NBFCs: An NBFC offers up to INR 50 Lakhs for Prime Listed Universities for masters courses. Generally, a parent’s annual income is considered for loan approval.

• International Lenders: As a sought-after choice for unsecured education loans for abroad for a master’s degree, all the popular international lenders provide 100% funding and good loan amounts. They also offer loans based on the GRE scores of the applicants. Applicants can expect to get up to USD 100,000 for all the masters courses & up to USD 121,000 for specialised courses like MBA.

Considering that you are now familiar with the general requirements, going ahead, let’s have a quick glance at the academic requirements to take such loans.

Unsecured Education Loan for Abroad: Academic Criteria

When applying for an unsecured education loan, academic conditions play an important role in the approval process. The general academic criteria for education loans include the following:

• For the USA, the GRE score and TOEFL score should be more than 300 and 90 respectively.

• Students should have completed 10th, 12th, and Graduation in first class.

• Students should have a minimum number of backlogs with no academic gap.

Apart from the academic conditions, there are some other important factors to consider. Read ahead to know more about these factors.

Unsecured Education Loan for Abroad: Other Factors to Consider

Here are some common parameters every student must know if he/she is looking to apply for unsecured education loans for abroad:

• The student’s age should not be more than 30 years.

• The student should not have any type of loan on himself/herself.

• Student’s residence should come under the serviceable area.

• Parents’ monthly income should be more than 20,000 excluding other expenses and liabilities.

• Parents’ CIBIL score should be above 700 with a strong credit history

• If parents are running any household business, that business should be registered.

• Financial criteria will be considered while applying for certain unsecured loans.

Once you have all these aspects in check, you can apply for an unsecured education loan for abroad.

We hope that you have some clarity on the guidelines that need to be followed while applying for unsecured loans. If you wish to explore the funding options for your higher education, then Team Élan is at your service. Our expert Overseas Education Loan Advisors will not only help you find the right loan option but also assist you in getting the best student loan interest rates. Connect with our experts today!