Table of Contents
- Education Loans are Debts You Can’t Pay Off Easily
- Students Without Collateral Won’t Get an Education Loan
- Collateral or Cosigner is Mandatory for an Education Loan
- Self-financing is Better than Education Loans
- Lack of Financial History is an Ineligibility
- Education Loans Only Fund Your Tuition Fees
- Only STEM Degrees are Funded by Education Loans
- Everyone Gets the Same Education Loan Option
- Interest Repayment is Mandatory While Studying
- Education Loan Terms are Fixed and Rigid
- The Process for an Education Loan is Lengthy
- Frequently Asked Questions
Education loan options empower and actualize the dreams of many global study aspirants. For example, in India, they have become the fuel to breach financial barriers for the common people. According to the Union Ministry’s report, the total education loan disbursement in the country with a significant number of youngsters overseas was INR 17,600 Cr in 2022 – 2023, compared to INR 16,000 in 2021 – 2022.
The scope of education loans in empowering your future can’t be underestimated. However, you might encounter the invisible challenge of myths when you step in. They are everywhere, disguised as facts to demotivate you from taking the big leap. Let’s uncover the myths and replace them with the facts before applying for an education loan to study abroad.
Myth: Education Loans are Debts You Can’t Pay Off Easily
Fact: Paying off your education loan is not a financial burden if the repayment is timely and without pending. Students get around 10 – 15 years to complete their repayment with interest. It is important to start the repayment after the moratorium holiday to avoid accruing debt.
Myth: Students Without Collateral Won’t Get an Education Loan
Fact: Study abroad education loan options are available with and without collateral. Many lenders offer unsecured (without collateral) student loans for abroad studies on the guarantee of a financially earning cosigner or without a cosigner. The interest rates are optimum, according to the financial market standards.
Myth: Collateral or Cosigner is Mandatory for an Education Loan
Fact: Often, students believe that collateral or cosigner guarantees are required for all kinds of overseas study loans. You should know that international lenders provide options without collateral or cosigners to facilitate your international education. Each lender keeps a list of eligible countries and courses. It takes around 2 – 5 days to finalize your loan product and proceed with disbursement.
Myth: Self-financing is Better than Education Loans
Fact: Taking an education loan is a better way to fund abroad than exhausting a significant amount from your savings. Instead of spending your emergency funds, taking an education loan provides you with enough funds and repayment time.
Myth: Lack of Financial History is an Ineligibility
Fact: Students are not expected to have a financial history to apply for an education loan. In fact, it is your cosigner whose profile is financially evaluated before granting an education loan. For no-cosigner options, only your academic details, such as scores, course, university, and country, are checked, not your past financial history. However, your CIBIL scores are crucial for no-cosigner loan options.
Myth: Education Loans Only Fund Your Tuition Fees
Fact: No. Education loan options cover your tuition and living costs abroad. Students need to provide the cost of attendance document they receive from their university abroad to prove the total expenses. The lender will allocate funds for your tuition and other academic expenses, living costs, travel charges, etc.
Myth: Only STEM Degrees are Funded by Education Loans
Fact: STEM and non-STEM courses abroad are eligible for education loan options. The courses could be degrees or diplomas. If you can prove your employability after studies, study abroad loan options are available for any course from a variety of lenders in the marketplace.
Myth: Everyone Gets the Same Education Loan Option
Fact: An education loan is a financial product customized to each person applying for it. Students must evaluate their profile before applying for an option. Factors like your academic scores, university of admission, course of study, country chosen, and past financial history (if any) matter when the lender considers your profile for an overseas student loan.
Myth: Interest Repayment is Mandatory While Studying
Fact: Repayment of education loan interest while studying depends on your lender’s terms. While it is mandatory for many, not all lenders require students to repay the interest in the moratorium period. Often, it is possible to negotiate and postpone the interest repayment after studies with accrued interest.
Myth: Education Loan Terms are Fixed and Rigid
Fact: The terms and conditions for a global study loan are not fixed or rigid. Students can negotiate with lenders on interest rates, the repayment period, and interest payments during the moratorium period. Many lenders are flexible in deciding the terms and conditions after a negotiation with students. Also, fixed and variable rates of interest are available in many cases, especially of no-cosigner education loan options.
Myth: The Process for an Education Loan is Lengthy
Fact: Getting an education loan for studies abroad is not a lengthy process if documentation is done in a timely manner. Start with your application, submit the documents, and let the lender examine your documents and decide further. Typically, it takes a maximum of 30 days for public and private banks and 1 to 2 weeks for NBFCs (Non-Banking Financial Companies) to process your education loan application. For international lenders, the total process takes place within 3 – 5 business days.
Concluding Remarks
Education loans support you in studying abroad despite your financial background. Take advantage of them to fulfill your academic goals overseas. Don’t let a myth become a hindrance in the process. Research well to understand the nitty-gritty of overseas education loans.
Debunk the myths of study-abroad education loans with the right guidance. Visit Nomad Credit, your overseas education partner. Our expert counselor evaluates your profile and extends personalized support in the education loan application, documentation, abroad admissions, and student visas at zero cost. Save big and step into greatness. Connect with us today!
Frequently Asked Questions
Is it safe to take an education loan to study abroad?
Taking an education loan to study abroad is a great way to finance the education of students. Education loans cover a big chunk of the expenses overseas. Regarding financial safety, if you can start repaying the loan debt after the moratorium holiday, there is nothing to worry about the debt. Connect with Nomad Credit’s counselor for overseas education loan guidance and repayment planning.
What are the risks of an education loan to study abroad?
The main risk of an overseas education loan is defaulting. If you fail to repay the EMI after your studies, it will negatively affect your financial credibility, which in turn affects your future financial transactions. Also, you may face legal consequences if the repayment is pending for long.
What happens if my education loan repayment is not made timely?
Failure to repay your CIBIL on time reduces your CIBIL score and affects future financial transactions. If the repayment is delayed for long, the lender may send you legal notice.
What expenses does an education loan for studying abroad cover?
An education loan to study abroad cover major academic and living expenses like tuition fee, accommodation costs, travel expenses, and food. It depends on the total cost of attendance you have abroad.
Will I get an education loan for abroad studies with backlogs?
Typically, 1 – 2 backlogs are okay if you manage to get admission abroad. However, universities abroad in general do not offer admission to students with backlogs.
Will my cosigner’s CIBIL scores affect my study abroad education loan application?
Your cosigner’s financial history and CIBIL scores will affect your education loan application. If the CIBIL scores are very low, the chances of getting an education loan will be lesser.
Which lender is the best for a study abroad education loan?
Deciding your top lenders for an abroad education loan is personal. Your profile must be evaluated to scrutinize your course, country, academic scores, and security details. Connect with Nomad Credit today and receive a zero-cost profile assessment and personalized education loan guidance for studies abroad.
