How to Secure a Good Education Loan at a Low Interest Rate: Education loans come to the rescue when finance becomes an issue in your journey of pursuing higher education abroad. For example, if you are studying at any university in UK you can get loans up to INR 1.5 crores which will cover your tuition fee and cost of accommodation. However, there are certain parameters that are considered while approving the education loan. If you are taking a secured loan you need to show a collateral of certain value. Also, your credit score shall be good which will show your ability and history of loan repayment. Let’s check and understand in detail all the parameters used by the lender while approving an education loan.
Table of contents
Maintain a High CIBIL Score
Your credit history shows your repayment behaviour towards the loans. CIBIL (Credit Information Bureau of India Limited) score or credit basically shows all the details of your past and ongoing loans and your repayment history. Always maintain a high CIBIL score by making all the payments at all times and make sure your CIBIL score is at least above 750. If your credit history shows that you have delayed loan repayments the bank will consider you as a risky borrower and may deny the approval.
Also Read: Reasons to Choose Fly Finance for Study Abroad Loan
Show Proper Collaterals
A lot of banks in India especially the public sector banks demand collateral for an education loan to study abroad. There are basically two types of collaterals accepted by the banks: (a) Immovable Assets, and (b) Liquid Collaterals. The immovable assets consists of properties like house, flat, land etc. and Liquid collateral includes assets like term deposit, insurance policies, government bonds etc. Show and pledge proper authentic assets and make sure there are no discrepancies in the supporting documents. Any error or mismatch in the documents related to your collateral may lead to the rejection of the education loan.
Maintain High Grades
It’s a common understanding that students who are meritorious aspire to pursue higher education in a foreign country. The bank will consider your application and approve it after checking all your previous mark sheets like HSC, SSC, Graduation (if applicable) and other qualifications based on your requirements. By analysing all your academic details the bank makes sure that you are a meritorious student and that your chances of getting a job with handsome packages are high after the completion of the course.
Have Work Experience
A lot of students pursue higher education in foreign countries after having work experience for a considerable period. If you have prior work experience and you are applying for a loan the bank will understand that you have a proper earning capability even without the concerned degree. Hence you will be low low-risk borrower and this will ultimately increase your chances of getting a study abroad education loan of the desired amount.
Also Read: Inflation and its Effect on Education Loan
Get a Scholarship
When you get a scholarship from the government or from the university where you are applying it increases the chances of getting an education loan quickly. This ensures two major things: (a) You are a meritorious student, and (b) You require a lesser amount of loan as there is already a scholarship involved. By showing the bank details about your scholarship you can get your loan approved faster and the disbursement will also be done accordingly. Always try to get a scholarship of any kind so that you can get your admission easily without any financial hindrance.
Select a Reputed College and a Top-notch Course
All the major banks or NBFCs in India have their own list of recognized universities in foreign countries. When you are applying for an education loan make sure that the university where you are taking the admission is a reputed university and the selected course is highly job oriented. Selection of top-notch courses and universities will show that you have a serious interest in pursuing the course and the bank will make the entire process of a loan easier and faster. For example, a student applying for a course at Cambridge University will get a loan faster as compared to a student applying for a course at any Tier-2 university abroad.
FAQs
Education loans to study abroad generally come with interest rates ranging between 8% to 15% or more depending on your requirements. If you want education loans with the lowest interest rates you can explore the schemes by the Government of India.
Usually, the SBI and Bank of Baroda are the most preferred public sector banks for study abroad loans. However, you can check and compare the terms and conditions of multiple lenders and find out the best lender as per your requirements.
Any score above 7 is considered a good CIBIL score. It keeps fluctuating as per your repayment behaviour and credit enquiries.
This was all about How to Secure a Good Education Loan at a Low Interest Rate. By analysing all the above-mentioned points the banks may offer low-interest rates considering you as a less risky borrower. Education loans to study abroad are common these days and you can easily secure a good education loan at a low interest rate. There are a lot of lenders in the market offering education loans at affordable interest rates. However, you should always make sure that your credit score is good and that you are fulfilling all the other eligibility requirements.
To know more about the loan application process, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience. Follow our social media handles on Twitter, LinkedIn and Instagram.
