When to Apply For a Study Abroad Education Loan in India?
Most students who wish to study abroad resort to education loans to fund their course. When it comes to the process of applying for a study abroad education loan in India in order to fund higher studies, time is of the essence. In order to be able to get an early sanction of your study abroad education loan in India, it is very important to apply at the right time. This article aims to elaborate on this very point.
In any abroad education loan process, knowing when to apply for one makes a huge difference to a student’s education loan process. Although it may sound easy, the process of securing a study abroad education loan in India could prove to be a tiresome and long affair if students are not mindful of applying on time. It is a well-known fact that a study abroad education loan in India is divided into two different categories based on the need of collateral security.
It is common knowledge that education loans in India are divided into two different categories based on the need of collateral security. Secured education loans from government banks are one of the most common sources of higher education funding chosen by students in India. Students who plan to apply for a government study abroad education loan in India to fund their higher studies are often advised to be prepared for a really long and tiring process. Let’s find out why this is so and what is the possible solution to this problem.
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Why Does a Government Student Loan in India Take More Processing Time?
As per the definition, secured education loans are provided by government banks on the basis of collateral security. In order to get an abroad study abroad education loan in India from nationalized banks, applicants need to pledge some sort of asset as collateral security. Most banks in India accept two different forms of assets: tangible assets and intangible assets.
Tangible assets refer to physically present, legally registered immovable properties, such as an independent house, non-agricultural land, non-commercial flat, a plot of land with defined boundaries, etc. Intangible assets generally refer to liquid security such as fixed deposits, life insurance policies with a fixed maturing date, government bonds, etc.
Almost 95% of the students who apply for a student loan from abroad with government banks pledge immovable properties as collateral security. Government banks in India conduct a legal, as well as financial verification of the property, pledged as collateral, before deciding its market price and making a decision on the final education loan amount that can be granted to candidates.
Numerous practical hurdles may pop up when you pledge an immovable property as collateral security with government banks. In the abroad education loan process, the phase in which the bank conducts the legal verification and financial examination of immovable property takes longer to complete when the house or land which is pledged as collateral security is found to have any legal problems.
For example, in a majority of the cases, students who are found to have lost one or two property documents are denied a secured study abroad education loan in India. They are required to apply for fresh documents and then restart the entire process again. Similarly, a bank-appointed civil engineer conducts a thorough study of the property and estimates its final market price. Banks consider this price while calculating the final education loan amount. During the evaluation process, if the engineers come across any violations of the bank’s policies regarding immovable property, borrowers are asked to correct the problem and then re-apply.
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Many students often wait for their confirmation letters to arrive from the respective universities before applying for an education loan for abroad studies. This leaves them with very little time between the commencement of their course and the education loan sanction. An important point to note is that a student’s confirmation letter is not required by banks until the legal verification phase is completed successfully. When students apply for an education loan for abroad studies after having received their confirmation, they could themselves really crunched for time as they might need their funds within a short period of time to fulfil their financial obligations to study in another country, and with banks taking time to sanction their education loans, this could become a complex affair.
So how do you cater for these problems in the process of getting an abroad study abroad education loan in India from government banks?
Instead of waiting for a confirmation letter and then applying for an abroad study abroad education loan in India, students should apply for a study abroad education loan in India for abroad studies immediately after dropping in their university applications. This way, by the time their legal and financial reports are done they receive a confirmation letter from the respective universities, the legal and financial evaluation of the property will have been completed by the bank.
Even if the students have to re-apply for missing property documents, they can do so, before the confirmation letter arrives. In order to know when would be the right time for you to apply for a study abroad education loan in India, do get in touch with the financial team of WeMakeScholars.
After reading about all of the possible hurdles that borrowers of a secured study abroad education loan in India are most likely to face, you might think of funding your higher education with the help of an unsecured student loan for abroad studies. You might be surprised to come across the fact that unsecured education loan applicants also happen to face bouts of delays in the process, even though collateral security is not involved.
Factors Responsible For Delays in Unsecured Education Loan Process
In the unsecured education loan process, the co-applicant’s income profile plays a major role in determining whether the applicant gets to avail a non-collateral student loan for abroad studies. Borrowers with co-applicants who are self-employed, often find it difficult to obtain a study abroad education loan in India without collateral because self-employed co-applicants do not possess the right documents which show a legal income source. Besides that, co-applicants with low CIBIL scores are also not accepted by most of the private lenders.
The Right Time To Apply For an Abroad study abroad education loan in India
The best way to get an abroad study abroad education loan in India is to apply for one as soon as possible. This means that students who are sure of securing admission into the desired university in any of the countries abroad must apply for an education loan for abroad studies as soon as they submit their application for admission into a university of their choice. In this way, they will be able to manage their financial obligations in an efficient manner.
This is specifically applicable to students who plan on studying abroad in countries like Canada, Germany, New Zealand, etc. which require applicants to deposit their living expenses before applying for student visas.
If you have just submitted your application for admission to a university abroad and are awaiting confirmation before proceeding with the application process for a study abroad education loan in India, do get in touch with the financial team of WeMakeScholars at the earliest opportunity.
Note: WeMakeScholars is an organization funded and supported by the Government of India that focuses on International Education finance. We are associated with 10+ public/Pvt banks/ NBFCs in India and help you get the best abroad education loan matching your profile. As this initiative is under the Digital India campaign, it’s at free of cost. The organization has vast experience dealing with students going to various abroad education destinations like the US, Canada, UK, Australia, Germany, Sweden, Italy, China, France among others