Student Loans – How To Get Educational Loan Without Collateral

Student loans are now accessible to applicants that know how to source for it. As much as everyone aspires to go to the top university, it’s crucial to remember that some of the biggest gigs charge premium. Without adequate finance, it is nearly, or should I say completely impossible, to accomplish some specific goals in any sector, particularly the educational one.

The difficulty of getting a loan as an international student is the motivation behind this post.

It’s a smart decision to want to study abroad, and this article discusses how to secure a loan for international studies as well as other crucial points to remember, such as the types of student loans and how to apply for study loans.

Educational Loan To Study Abroad

A student loan is money given to you by an organization for studies abroad that you must repay after a predetermined amount of time.

You can apply for these loans from your nation’s government, a local private bank, or a foreign bank in the nation where you will be studying.

Because the amount is so high, private loans require you to co-sign with your parents, but government education loans for study abroad have better terms.

Based on your credit score or financial necessity, a loan for international studies may be granted.

How To Get An Educational Loan For Studying Abroad

It is not impossible to obtain student loans for international study, but in order to do so more quickly, you must establish your eligibility for such loans and meet the requirements set forth by the investors.

This is how you apply for the highly publicized student loans for studying abroad.

1. Have An Impeccable Academic Background

To be able to get loans from abroad to study, you need to have a good academic background, because a poor result can reduce your chances of receiving that loan, as study abroad loans are highly competitive to gain.

2. Get Yourself A Cosigner

Having a cosigner is important, especially when applying for a loan in America, as a non-American citizen.

In this case, your cosigner should be a U.S. citizen or permanent resident with a good credit score, who has lived in the U.S. for up to two years. A cosigner will sign that they’ll pay off the loans should you be available to pay it.

3. Enquire From Your Program Of Study

The faculty of the program you’ll be studying abroad is a good place to get reliable information about student loans, and other financial aids that may be available to you.

They could also tell you the right processes to follow, and even offer to assist you with applying for the loan.

4. Ask The Financial Aid Office Of Your University

The financial aid officer at your university is another reliable source for getting accurate information on study abroad loans. They’ll provide you with trustworthy organizations you can get a loan from, and help you avoid scammers.

5. Apply For Federal Student Loans

The process for applying for federal student loans can go on for a while, so it’s always best for you to start your application on time, so you have all your documents ready without any hassle and don’t lose your spot to another applicant. If you are confused about this process, you can ask the financial aid office of your school of study for clarification.

6. Save Up

It is wise that you save up some money to fund your studies abroad, because it could help you if the loans you get partially cover the cost of your studies, or if you are eligible to receive a loan.

7. Explore Your Options

Try to explore other options you have, while asking for a loan, so that you can choose the one that suits you best.

Options you can explore include government covered loans and private student loans.

8. Apply For Government Student Loans

Government loans are highly recommended because they’re your best options when applying for study abroad loans.

This is because government student loans have lower interest rates, are easier to qualify for, and have flexible repayment options.

The only downside to government study loans is that it might not cover all the expenses from your studies, so you might need to get extra money from somewhere else. Other than that, this is a good option for study abroad loans.

9. Get A Student Credit Card

Getting a student credit card for yourself prior to applying for a loan, builds yourstudent line of credit for studying abroad, thereby increasing your chances of your application for a loan being accepted.

Types Of Student Loans For Study Abroad

Federal student loans and private student loans are the two main types of student loans to take into account when applying for an education loan for abroad studies.

Government agencies or private organizations like banks and other financial institutions may help pay for your student loans.

You have access to a variety of federal and private student loan options, but you can always base your decision on factors like your academic year, your financial needs, and your credit history.

However, compared to private student loans, federal student loans are thought to be more flexible and offer more advantages.

Federal Student Loans

Federal student loans are essentially government education loans for study abroad that are provided to you by your country’s government and are typically based on need.

A Free Application for Federal Student Aid must be completed in order to apply for a federal student loan through the financial aid office of your institution of higher learning (FAFSA). Only students who are presently earning credits from their home university may use federal student loans overseas.

First-time applicants go through entry counseling, during which the loan application process is explained and the instruments for financial planning are given to them.

Federal Student Loans Types:

You may be eligible for a government education loan for study abroad through certain country-based federal student loans, for instance:

American Government Federal Student Loans

The Government of The United States Of America, does well to offer different student loans for american students studying abroad.

Categories Of US Government Students Loans

Some of such federal student loans are:

1. Direct Subsidized Loans – for eligible undergraduate students who showed finance need to cover their higher studies at a college or career school.
2. Direct Unsubsidized Loans – are for undergraduate, graduate, and professional students, who qualify for a loan, but don’t demonstrate a financial need.
3. Direct PLUS Loans – are awarded to graduate or professional students and parents of dependent undergraduate students who help them cover the cost of tuition. This loan doesn’t require financial need, but you need a credit check.
4. Direct Consolidation Loans – provide you with the option to combine all your eligible federal student loans into a single loan under a single loan service.

American Government Federal Student Loans Examples:

1. Stafford Loans

Are granted as both subsidized and unsubsidized loans.

2. Federal Perkins Loan Program

The Federal Perkins Loan Program funds college or career school students with financial needs.

It is a low interest loan, but isn’t available in all schools. You are advised to check with the financial aid office of your school of study.

3. Foreign Enrolled Loans

Foreign Enrolled Loans are granted to US students who are either directly enrolled, or working on securing a degree or certificate at a non-US school.

This loan has over 400 approved schools around the world, and allows you to borrow up to $50,000 per year for undergraduate study programs, and up to $70,000 per year for students in medical, dental, law or business school to fund your studies abroad.

To qualify for the Foreign Enrolled Loan, you need to have a cosigner, but if you don’t have one, a good credit history can be another advantage.

The Foreign Enrolled Loan has a high loan limit, which is particularly helpful for US students studying in countries with a high cost of living.

Eligibility For American Government Federal Student Loans

1. Must be a US citizen or US permanent resident studying outside their home country in an approved US school at an undergraduate or graduate level.
2. Must receive credit at your home college or university.
3. The school you choose must be accredited by the United States Secretary of Education recognized agency,
4. Be eligible to participate in all federal student aid programs.

Recommended: Apply For Tuition – Accommodation Free Scholarships In The US

Canadian Government Student Loans For International Study

The Government of Canada and most of its provinces, work together efficiently to offer Canadian student loans for international study.

One such student loan is the Canada Student Loans Program which offers repayable and non-repayable grants to Canadian students.

Canada Student Loans Program is available in partner provinces and territories, and is awarded to:

1. Full time and part time students.
2. Low and middle income students.
3. Students who have dependents.
4. Permanently disabled students.

Canada Student Loans Program Distribution

Distribution of student loans in Canada, are based on provinces you apply from.

Students in provinces like Ontario, British Columbia, Saskatchewan, New Brunswick, Newfoundland and Labrador, get Integrated Student Loans.

Alberta, Manitoba, Nova Scotia and Prince Edward Island, students can apply for Canada Student Loans and Grants.

Nunaut, Northwest Territories and Quebec, have their own loan programs, so Canada Student Loans are not available in these places.

In Yukon, only permanent residents can get Canada Student Loans and territorial Grants.

What Can The Canada Student Loan Program Fund?

The Canada Student Loans Program pays for living expenses in addition to tuition, lodging and board, books, and other educational costs.

Canada Student Loans Program Eligibility Criteria

1. Must be pursuing a degree, certificate, or license at an eligible university in the United States or in Canada as citizens.
2. Cosigners are required for Non-US citizens.
3. Must be a Canadian citizen, a permanent resident in Canada or a designated protected person.
4. Must be a resident of a Canadian province or territory that offers the Canada Student Loans.
5. Demonstrate tangible financial need.
6. Is enrolled in a minimum of 60% of a full course load or 40% for students with permanent disabilities), if you as a full-time student.
7. Is enrolled in 20-59 percent of a full course load as a part-time student.
8. Be enrolled in a programme offered by a stated post-secondary school which runs programs for at least 12 weeks within a 15 week period.
9. Pass a credit check if you are over 22 years of age and it’s your first Canada Student Loan application.
10. Would not have exhausted your maximum lifetime limit for financial assistance.

Note: eligibility criteria differs for permanent residents of Northwest Territories, Nunavut and Quebec, as they have their own financial aid program.

Education Loan For Abroad Studies By Indian Government

The Indian government has established a number of financial programs to help deserving students with their academic endeavors.

Notable Educational Loans Offered By The Indian Government

Here are some education loans the Indian government offers for study abroad programs:

1. NBCFDC Education Loan Scheme

The National Backward Classes Finance & Development Corporation education loan scheme is given to applicants from the Other Backward Class (OBC), who wish to study general, professional, or technical courses at a Master’s or Bachelor’s degree level in an Indian university, or an Institution abroad.

NBCFDC Eligibility Criteria

1. Government issued certificate of OBC.
2. Admission into a foreign or Indian university.
3. Admitted based on an entrance exam or on merit.
4. Family income of less than Rs.3.5 lakhs.

2. Dr. Ambedkar Central Sector Scheme

The Dr. Ambedkar Central Sector Scheme is a government education loan scheme that was launched to finance the studies of students from backward and weak economic backgrounds at foreign universities.

Dr. Ambedkar Central Sector Scheme Eligibility Criteria

1. Government-issued certificate of OBC.
2. Admission into a foreign university only.
3. Admitted to study at a master’s & Ph.D. level
4. Applied for bank loans from a bank that is a member of the Indian Banks Association.
5. Family income below Rs. 3 Lakhs p.a.

3. Padho Pardesh Education Loan Scheme

Like the Dr. Ambedkar Central Sector Scheme, the Padho Pardesh Education Loan Scheme is another Indian Government education loan scheme established to help students from economically weaker sections of minority groups, complete their studies in foreign universities.

Padho Pardesh Education Loan Scheme Eligibility

1. Must be pursuing & have secured admission seats at Masters or Ph.D. level.
2. Must belong to a minority community declared in section 2(c) of the National Commission for Minorities Act, 1992 ( Muslims, Christians, Sikhs, Buddhists, Zoroastrians (Parsis) and Jains )
3. Have applied for a loan from a bank that is a member of the IBA.
4. Family income should be less than Rs.6,00,000 lakhs p.a.

4. Central Scheme of Interest Subsidy for Education Loans (CSIS)

The CSIS is an initiative by the Ministry of Human Resources Development, Department of Higher Education for students from economically weaker sectors in India, who wish to pursue technical or professional courses in Indian or foreign universities.

CSIS Education Loan Eligibility Criteria

1. Admitted to study any of the approved courses in a recognized Indian or foreign universities.
2. Applied for loan under the Educational Loan Scheme of the Indian Banks’ Association (IBA).
3. Family income of less than Rs. 4.50 Lakh per annum.

Private Student Loans

If you need them, private student loans are offered by banks and other organizations that provide financial aid and can be used in certain situations.

You must apply for private loans directly with the bank or other financial institution you intend to use for funding.

When you apply for a private loan, you must provide evidence of your ability to repay by way of a high credit score. You may be able to obtain bank loans for international students if you have a cosigner.

Types Of Private Student Loans

Here are a few banks where you can obtain a loan for international study.

1. State Bank Of India
2. HDFC Bank
3. Bank Of Baroda (https://www.bankofbaroda.in/)
4. Bank Of Alfalah (https://www.bankalfalah.com/)
5. FCMB (https://www.fcmb.com/)
6. Punjab National Bank (https://www.pnbindia.in/)
7. We Make Scholars (https://www.wemakescholars.com/study-abroad-education-loan)

Requirements For Applying For Student Loans Abroad

Each institution has specific documentation criteria before they would provide you a loan for an international higher education.

Nevertheless, the following are some fundamental documents you could need for a student loan:

1. Filled application form
2. Passport photographs of you and your co-applicant.
3. ID of you and the co-applicant (ID can be a PAN card, driving license, Voter ID card, Aadhar (for Indian applicants), Card, or Passport.
4. Resident proof of you and the co-applicant.
5. Academic documents – Mark sheet and certificates
6. Results for GRE, GMAT, TOEFL,or IELTS, etc.
7. Admission letter from the university or college.
8. Last six months bank statements of your co-applicant
9. Income proof of your co-applicant
10. Collateral (if applicable) – flat, home, or non-agriculture land. The following documents are required – property title deed, building approved plan, and NOC for a mortgage from builder or society.

How To Apply For Student Loans

You must adhere to the terms and conditions outlined by the loan provider, qualify for loans, and, most importantly, understand how to submit a loan application in order to obtain the best education loan for studying abroad.

Although each institution has its own application procedures, the straightforward steps for applying for student loans are listed below.

1. Compare And Explore Study Abroad Loans

Compare each study abroad loan option presented to you, so that you can ultimately find the best education loan for abroad studies for you. Most loan websites have a comparison tool you can use to do this or they have a team of advisors that can match you to the right loans that suit your profile.

2. Review Terms And Conditions

Review the terms and conditions of any lender you matched with regarding your loan, then compare each one and pick the one that is good for you.

3. Apply

Depending on the stipulated process, an application for a loan can be made in person or online, during which you and or your co-applicant / co-signer will be required to submit the required documents online.

How To Apply For Abroad Education Loan Without Collateral

When you apply for an education loan to study abroad, you must pledge collateral to the lender. Collateral includes things like personal real estate, home equity, personal automobiles, paychecks, cash or savings accounts, investment accounts, paper investments, fine art, jewelry, or collectibles.

Collateral is required so that the bank or other organizations can take control of those items in lieu of the money they gave you if you are unable to repay the loan.

It is challenging, but not impossible, to obtain a non-collateral education loan for studies abroad because you may always choose an unsecured education loan, which provides funds to you without requesting a collateral.

The sole criteria used to determine if you and your co-signer qualify for one of these school loans for study abroad without collateral is your future income and creditworthiness.

This kind of loan can be granted if both you and your co-signer have a solid credit history and the educational and professional background necessary to succeed following the master’s program you applied for.

Organizations That Provide Uncollateralized Student Loans

Education loans without collateral for international studies are frequently provided by nationalized banks, private banks, NBFCs, and foreign lenders.

All you have to do is look for organizations and banks like the ones listed below and submit an application.

1. Leap Finance

Leap Finance is an Indian international loan provider, that sanctions an instant collateral free education loan for abroad studies which you can avail after 3 days of applying for the loan on their online platform.

2. Axis Bank

Axis Bank offers up to INR 40 Lakhs without collateral, for its study abroad loan without collateral. Interest rates vary from 11.25% to 13% depending upon the applicant’s profile.

3. InCred

InCred is an NBFC that offers overseas education loans without collateral of up to INR 40 lakhs, an exception however, can be made for this amount. Interest rates for InCred are from 11.75% to 16% depending on the loan amount.

4. Avanse

Avanse provides both secured and unsecured loans, their foreign education loan without collateral is facilitated via the latter. The loans start from INR 1 lakh to INR 40 lakhs, it can be increased depending on your profile.

5. Auxilo

Auxilo offers education loans abroad without collateral, and they also provide loans for studies in India. You have no influence on the minimum amount you can borrow. However for their unsecured loans, the maximum amount is INR 40 lakhs; case-level exceptions can be made.

Conclusion – Educational Loan Without Collateral

As we stated at the outset, obtaining a loan to finance your studies abroad is not something that is unattainable or inaccessible. In fact, as long as you contact the appropriate organizations and adhere to the correct procedures, you will be well on your way to obtaining an educational loan without collateral.

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