Are you planning to pursue your higher education in elite universities in the United States but stuck due to the high cost of education? Don’t worry, an overseas education loan is one of the best options that will help you sail in the ocean of your dreams.
Commonly, there are two types of education loans: secured and unsecured loans. In a secured loan, you need to pledge security as collateral because in case you default on the loan, lenders can recover the amount by selling the pledged collateral. However, if you don’t have assets to offer as collateral, there’s still a viable path to take an education loan.
In this article, we will give you an overview of how to apply for a student loan for USA without the need for collateral. So, stay engaged as we dive deeper.
What is an Unsecured Education Loan?
An unsecured loan, also known as a loan without collateral, is a type of lending arrangement where the financial institution does not demand collateral as security. Unlike secured loans, which require tangible or intangible assets to be pledged, unsecured loans do not impose any collateral. Instead, approval for such loans depends upon the borrower’s financial reliability, university selection, academic track record, standardized test score, and earning potential.
Key Considerations for a Collateral free Loan
Before proceeding to apply for a collateral free education loan for the US, keep in mind the below-mentioned factors about the types of lenders.
|Particulars||Nationalized Banks||Private Banks||NBFCs||International Lenders|
|Popular Lenders||SBI, UBI, BOB, BOM, BOI||ICICI Bank, Axis Bank, IDFC First Bank||HDFC Credila, Avanse, Incred, Auxilo||MPower Finance, Prodigy Finance|
|Quantum of Finance||Up to 7.5 Lakhs (Without any schemes) Up to 50 lakhs (Under special schemes)||Up to 50 Lakhs (Without any schemes) Up to 75 lakhs (Under special schemes)||Up to 50 – 60 Lakhs||Up to 75 Lakhs|
|Loan Repayment Tenure||Up to 15 years||15 years||Up to 10 years including the program duration||12 years|
|Interest Rate||9.8% – 11%||12 – 15%||11 – 15%||9.50 – 16%|
|Loan Financing and Margin||75%+25%; 90%+10%||85%+15%||100% loan funding||100% loan funding|
|Processing Time||10 – 15 working days||7-10 working days||8-10 working days||5-7 working days|
|CIBIL Score||Mandatory||Mandatory||Mandatory||Not required|
These are some of the key considerations before applying for a non collateral education loan for USA. Now, let us glance at the requisites to apply for an unsecured education loan.
Requisites to Apply
Applicants should fulfill the below eligibility criteria and be prompt about the essential documents to apply for an unsecured loan to study in the USA.
|Eligibility Criteria||Essential Documents|
|– Applicant should hold Indian Nationality|
– Applicant should be above 18 years of age.
– Good income profile of the co-applicant
– The co-applicant should have more than 700 CIBIL Score
|– Copy of Offer letter from US university|
– Academic Transcripts of SSC, HSC, and Graduation Degree (if applying for PG)
– Test scores – IELTS, PTE, SAT, GRE, etc.
– Proof of Income – Salary slips, bank statements, or Form 16
– Proof of Identity – Valid Passport, Aadhar Card, PAN Card
Since you are acquainted with the eligibility criteria and the essential documents now let us check the procedure to apply.
Basic Procedure to Apply
Here is the procedure to apply for a collateral free education loan in the USA.
- Find a suitable financial lender considering all the essential factors like the rate of interest, moratorium period, repayment tenure, etc.
- After picking the financial lender, fill out the loan application form duly and submit it to your preferred lender online on the official website or offline by visiting the bank.
- Submit all the essential documents that are mentioned in the above table.
- Wait for the approval of the loan, the processing time varies among different lenders. Since it is an unsecured loan there will not be any collateral documentation. Thus, the processing time will be less.
We hope this article has given you a brief insight into applying for an unsecured loan to study in the USA. If you want more updates on the interest rates for education loan for abroad studies, reach out to the top overseas loan advisor. Good luck!