How To Get A Personal Loan For Studies Abroad

Every year, students from India apply to colleges and universities in the US, UK, Singapore, Australia and many other countries to get their undergraduate or postgraduate degrees. Many families choose to take loans to finance their education. In such a financial situation, a student loan for studies abroad is often the first choice because it has low interest rates and good repayment terms and conditions. But getting a student loan can be difficult because it requires a lot of paperwork and detailed assessment by the lender. For this reason and more, a personal loan for study abroad purposes is a great option.

What Are Personal Loans

Personal loans can be used for different purposes, depending on your needs. This includes paying for an education. The best aspect of taking out a personal loan for study abroad reasons is that you do not have to offer any of your assets as collateral since personal loans are unsecured loans. Personal loans are approved by lenders based on your income, credit history, ability to pay back and some other factors. Using a personal loan to finance an education allows students to use the loan amount for their fees as well as other related expenses such as accommodation, travel, academic materials and more without any restrictions.

What Are Education Loans or Student Loans

Education loans can help students finance their education. They are especially helpful for students who do not have access to money to pay their fees and other academic expenses. Education loans help students lessen the burden of their education-related expenses and allow them to plan their academic and professional future. Many lenders offer student loans for studies abroad and these loans can be used by students for multiple purposes, according to their various needs.

Why Take a Personal Loan For Study Abroad Purposes

• A Single Loan Can Cover All ExpensesYou can use a student loan only for educational expenses. On the other hand, personal loans can be used to pay for plane tickets, food, housing outside of the college campus and much more.
• Flexible Tenure and Loan Amount With a personal loan, the loan amount can be increased if there is an increase in tuition fees, for example. Moreover, the term of personal loans can be extended to up to 60 months. Also, a student can take a personal loan of an amount of up to Rs. 75 lakh. 
• Affordable Interest Rates The interest rate on education loans depends on multiple factors such as your academic record, the educational institution you intend to study in and the duration of the course. But the interest rates on personal loans can be much lower since they are based on your credit score and whether you meet the lender’s eligibility requirements which include age and other factors.
• Minimal Documentation Required Not much paperwork is needed to get a personal loan, but there are strict rules about who can get a student loan for studies abroad. People can get a personal loan for studies abroad if they have documents to prove their identity, job history, income and a good credit report. If the student does not have a source of income, their parent or guardian has to be the guarantor.

Features of a Personal Loan For Study Abroad Purposes

When applying for a personal loan for study abroad reasons, you should keep in mind these important aspects of a personal loan:

• Credit ScoreThe person who wants to borrow money should check their credit score before applying. Lenders look at credit scores to decide whether or not to approve personal loans. On a scale from 300 to 900, 750 is considered an ideal score. 
• Loan AmountStudents and parents should carefully calculate all of their costs such as travel, housing, study materials, tutoring and more. They should also take into consideration the cost of living in the host country and apply for a sufficient loan amount.
• Interest RateStudents who want to study abroad should opt for a long-term personal loan so they can repay their loan in affordable EMIs once they get a job. In this context, it is important to check the interest rate being offered by the lender. 

Before applying for a personal loan for study abroad reasons, it is crucial to follow this process which begins with selecting the right lender to ensure you repay your loan on time. This is the process to be followed:

• Research different lenders and find out their interest rates, loan approval process, details on loan tenure and more.
• In addition to these important factors, check if they offer good customer service and other services you may require.
• Complete and submit the application form, which is either in person at the nearest branch or online.
• Submit or upload all the relevant documents along with your application form.
• It is important to read the loan offer document before you sign the loan agreement.
• Once the personal loan is approved, you are free to use the personal loan amount for any expenses you may have.
• Strictly follow your repayment schedule to ensure you do not default on your payments. Making your EMI payments on time can help you improve your credit score.

Documents Required For a Personal Loan For Study Abroad Purposes

Ensure you prepare the following documents before you apply for a personal loan for study abroad purposes:

• Identity proof documents such as a passport, Aadhaar card, passport, etc.
• Address proof documents such as a driving licence, passport, electric bill, etc.
• The last six months’ bank statements
• Passport-sized photographs

Conclusion

Compared to other types of loans, the application and approval process of personal loans are simple. Personal loans can help students finance their education and give them many other benefits as well. While student loans for studies abroad are a popular option, personal loans for study abroad purposes are advantageous for many students since it allows them to get a loan without collateral. Furthermore, the eligibility requirements for personal loans can be met easily. For more information on personal loans, visit Piramal Finance to read more useful articles and receive guidance on education and personal loans!