• Education Loans
Foreign Education Loan Approval Factors: Program Type and Country
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An education loan covers various costs for a student such as tuition fees, travel expenses and other education-related expenses. Deep dive into this article to know some important details about overseas education loans such as the documents required, eligibility criteria for education loans, the education loan process and how the type of program and country students choose can affect their overseas education loan approval.
A lot of international students prefer taking education loans to fund their abroad studies because they get a higher loan amount and longer repayment tenure. Also, today there are many banks which provide study loans to pursue foreign education without collateral. This article is for all those who have many questions in their mind regarding foreign education loans.
What is an International Education Loan?
Eligibility for Foreign Education Loan
Foreign Education Loan Documentation
Types of International Education Loan
Secured Education Loan | A secured education loan is a type of loan where a borrower needs to provide collateral to banks such as fixed deposits or property to secure the loan. If the borrower fails to repay the loan the bank can use the collateral to get money back. A secured education loan for foreign education comes at a lower rate of interest. |
Unsecured Education Loan | An unsecured education loan is a loan where a borrower doesn’t need to provide any collateral to the loan provider. Due to no security, the interest rates of unsecured loans are higher than secured education loans. |
Factors Affecting Foreign Education Loan
Credit History | A good credit history can help students to get foreign education loans faster. Students can show a good CIBIL score for their co-applicant. If the CIBIL score shows that the previous loans taken were paid on time, it will increase the chances of getting loan approval. |
High Earning Potential | Students may get quick approval of their overseas education loan if they choose a high-earning potential course. The courses like medicine, management and engineering have a great earning potential. Therefore, it's important that students choose their program carefully as banks don’t sanction part-time, correspondence or distance courses. |
Academic Record | This is good news for all the high achievers. A good academic record can increase the chances of getting a loan approved. It doesn’t mean that average students won't be able to get education loans. An average student who enrolled in a premier academic program will have a higher chance of getting an education loan. |
Institutional Accreditation | Students applying for foreign study loans should be aware of this thing that banks decline the education loan if the student is applying to an unrecognized institute. Hence a student must apply to a recognized institution to have a higher chance of getting an education loan. |
International Education Loan Process
How does the program type and country affect International Education Loan Approval?
Type of Program
Further, the approval of overseas education loans will also depend on the cost of the program. If the program is very expensive then the banks may reject the application due to the risk associated with it. The duration of a program is also a crucial factor impacting loan approval. The longer courses with a duration of 4 years will have less chance of approval as they are seen as riskier by the banks while shorter courses such as certificate or diploma courses. The approval of study loans can also be affected by post-graduation opportunities offered by the program.
Type of Country
Another factor which affects the approval of an overseas study loan is the type of country the applicant chooses. The developed countries have higher approval rates due to factors such as stable political systems, well-renowned institutions and strong economies. Such countries are the USA, Australia, Germany, Canada etc.On the other hand, developing countries have lower approval rates due to factors including quality of education, political uncertainty and economic instability. Loan approval also depends on the living expenses of the country. A lower cost of living will be seen as less risky by loan providers and may result in faster loan approval. Government policies are another factor which can impact the study loan approval. the banks may approve study loans if a student is going to study in a country where the government offers scholarship programs or loan schemes to foreign students.
Conclusion
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