5 Tips for Getting an Education Loan in India

Are you dreaming of pursuing higher education in a world-class international university but feeling discouraged by the skyrocketing education costs?

While the opportunity to build a lucrative career through studying abroad is priceless, it can come at a hefty price tag. According to a recent survey, the average cost of studying abroad in 2023 is a staggering $16,000 per semester.

As a result, many students turn to education loans to fund their higher education aspirations. However, getting approved for a student loan is not always a walk in the park, as lenders take into account various aspects such as your credit history, loan amount, academic record, course type, and institute before granting their approval.

Tips to boost your chances of securing a quick and easy education loan

1. Choose the right lender

While there are several lenders including banks, non-banking finance companies and other private organisations offering education loans in India and abroad, it is crucial to weigh in on your options carefully.

When selecting a lender, consider doing a compare check based on the interest rates, loan terms, repayment options, moratorium period, collateral requirements, processing fees, benefits offered and education expenses covered by the loan. This will help you get an education loan on favourable terms.

2. Choose a reputable institute

Seeking an education loan, opting for a renowned institute can work in your favour! Why? Well, it’s simple. Lenders tend to have more faith in premium institutions, which could translate into a greater belief in your capacity to repay the loan upon completing your studies. Besides, an esteemed institute could encourage the lender to sanction loans with low-value collateral. So, choose wisely and give your loan application a boost!

Pro tip: You could ask the lender for the list of universities and courses for which they can offer special benefits such as no/low-value collateral or lower interest rates.

3. Maintain a good credit score

Lenders take into consideration your credit score while screening your education loan applications. Accessing your creditworthiness through your credit score enables lenders to gauge your ability to repay your loan promptly and reliably.

Generally, for availing an education loan, the minimum credit score required is 685. A good credit score makes it easy for you to obtain a lower rate of interest, higher loan amount, longer tenure and quicker approval.

Pro tip: If you are availing a loan for the first time, use this opportunity to build a good credit report and increase your chances of availing a hassle-free loan in the future.

4. Keep your paperwork organised

To increase your likelihood of receiving a loan, be sure to submit all necessary documents when making an application. This will help you make a strong application to support your case. For instance, if you have been awarded a scholarship, provide a copy of the documentation as proof to increase your likelihood of loan approval.

Besides, keep basic documents handy including the letter of admission from the university, credit report, and personal documents such as identity proofs, address proofs, etc.

In most cases, you might also require your parents’ income-related documents as it is less likely to have income proof of your own at that age.

Did you know?: By keeping your paperwork well-organized, you can easily obtain a conditional loan approval letter that can serve as proof of funds when applying for a visa at international immigration offices.

5. Understand loan terms and conditions

It is important to be aware of the terms, conditions and repayment requirements of the loan. It is wise to understand the total cost of obtaining a loan and choose whether you want to go for a fixed or variable interest rate.

If you are taking a high-value loan, you might have to pledge collateral as security against the loan. A collateral could be a house, non-agricultural land, fixed deposit, gold, life insurance, etc.

**Must-know information: **

Different banks have different rules for collateral. But, collateral requirements are as follows:

Bonus tip: A secured education loan can fetch you a lower interest rate, higher loan amount and longer repayment period.

The above tips will help you obtain a hassle-free and quick education loan to get a degree from your dream institute. You may reach out to NuCash, your go-to fin-friend that can help you secure easy education loans from top affiliate banks. NuCash is a NeoBank that aims to offer a better banking experience for college students and bring more transparency and convenience in managing their finance.

Reach out to us today!