Students who take Education Loans have higher chances of visa approval

Securing a student visa for studying abroad is a significant step in the academic journey of many students across the world. However, the financial aspect of getting an international education often poses a considerable challenge.

In recent times, it has become increasingly evident that students who opt for education loans have a higher chance of obtaining approval for their visas. In this article, we are going to list reasons why taking an education loan can improve your chances of VISA approval. 

But before that, you’ll need to know what an education loan is. So let’s get started.

Education Loans are funds provided to students for funding their higher education, both within India and abroad. Various financial institutions, including public sector banks, private banks, and NBFCs, give out these loans. They are majorly divided into two types

• 1. Secured Education Loan:
  This type of education loan requires the borrower to pledge collateral, which can be an asset like a house, flat, non-agricultural land, fixed deposits, insurance policies (term insurance), or government bonds.
• 2. Unsecured Education Loan:
  An unsecured or collateral-free education loan allows students to obtain financial assistance without providing any security or collateral. Unlike secured loans, this type of education loan does not require the borrower to pledge assets, making it a more accessible option for those who may not have significant assets to offer as security.

Reason #1: Demonstration of Financial Capacity 

• One of the main requirements for getting your visa approved is demonstrating your financial capacity to the government and immigration authorities of the country you are planning to go to. 
• Having the financial backing signifies that the student has the necessary means to sustain in the country without ending up there without any financial help increasing the pressure on public services of the country, which creates a positive impression during the VISA application process.

Reason #2: Increased Credibility

• The evaluation process done by banks and financial institutions signifies that the student meets all the eligibility criteria set by the banks. I.e., the student meets the CIBIL, academic and financial guidelines set by the bank. This tells the immigration authorities that the student is of a sound background improving your chances of VISA approval.  

Reason #3: Structured Financial Plan

• VISA officers generally look for a well-structured financial plan that can cover all the expenses that can incur while studying abroad. 
• An education loan provides students with a structured disbursement plan where it is clearly outlined how the banks intend to meet all of the timestamps. Leaving a positive impression on the immigration officers. 

Reason #4: Demonstrating serious intent to study abroad

• Everyone knows that taking an education is not an easy deal to go through, there are stringent measures and checks banks go through before funding a student through an education loan. And the fact that someone is willing to go through it shows their commitment and intent to pursue their higher education abroad. 
• VISA officers are more likely to approve applications from students who have taken proactive steps to fund their education through education loans, as it reflects their dedication to their academic aspirations. 

Reason #5: Mitigating Financial Risks 

• Education loans can act as a safety net for both applicants and immigration officers. When it comes to students an education loan provides financial safety which ensures that they can cover all of the expenses it takes to study abroad which can include health insurance. 
• Whereas, for visa officers, it reduces the risk of students facing financial difficulties during their stay, which fosters a sense of confidence in their decision to approve the student’s VISA application. 
• You might be thinking, if funding improves my chances at getting my VISA approved, why go for an education loan for it? I can fund it myself by choosing other financing options. Well, that isn’t very beneficial and we’re going to explain why in the section below. Keep reading. 

In this section, we are going to discuss all the issues students face with self-funding to meet the financial expenses to pursue their higher education.

1. Arranging Large Funds: Embassies often ask for proof of funds for the entire course duration. When students self-fund they are under pressure to arrange a large sum of money at the beginning of the course because of this reason. Education loans on the other hand periodically disburse the required amount directly into the university’s bank account. 

2. Living expenses: Students who are self-funding must cover their living expenses separately apart from their academic expenses. While education loans include living expenses and other miscellaneous expenses which eliminates the need for other funding options. 

3. Currency Fluctuations: Self-funding students must deal with currency fluctuations which can affect the amount they’ve calculated and have gotten disbursed into their account. They might end up needing more than they anticipated which can leave them stressed to find another source of funds in a short period. Whereas, education loan disbursements are adjusted to compensate for the change in currency values. 

4. Government Subsidies: Various subsidy schemes and income tax exemptions are only provided when a student takes an education loan through a financial institution operating in India. Which leaves the self-funding students unable to benefit from these schemes. 

5. Moratorium period: Many banks and financial institutions in India offer a moratorium period or a repayment holiday to students. This is the period given to students after they are done with their course. It can last from 6 months to a year when they don’t have to start paying back their education loan. Self-funding students have the pressure to immediately find a job after finishing their education to deal with the expenses of living abroad. 

But getting an education loan is not that easy. From researching all the education loan lenders in India to comparing their terms to find the one best for you, negotiating the ROI, then making several trips around the banks to submit all the documents one by one to the banks can be very stressful and time-consuming. 

This is where we come into the picture. WeMakeScholars is a government-funded organization funded and supported by the Ministry of IT, the government of India. We help students find the best lender for them to get their education loan, help them throughout the application process, negotiate the best deal for them, and even help with post-sanction support. You can reach out to us by requesting a callback or by commenting down below.