{"id":9219,"date":"2022-12-20T10:48:29","date_gmt":"2022-12-20T10:48:29","guid":{"rendered":"https:\/\/varthana.com\/student\/?p=9219"},"modified":"2024-05-24T06:19:35","modified_gmt":"2024-05-24T06:19:35","slug":"what-is-an-unsecured-education-loan-and-how-can-it-help-students","status":"publish","type":"post","link":"https:\/\/varthana.com\/student\/what-is-an-unsecured-education-loan-and-how-can-it-help-students\/","title":{"rendered":"What is an unsecured education loan and how can it help students?"},"content":{"rendered":"

India now has 1,000 universities and 40,000 colleges, and the country\u2019s higher education system is about to undergo a major transformation. In addition, the new National Education Policy (NEP) will significantly impact the overall system.<\/span><\/p>\n

With changing times, the education system has come a long way in making our country progressive. At the same time, with this continuous evolution, the cost of education is also increasing at a sharp pace.\u00a0<\/span><\/p>\n

Given the cost of expenses, funding education becomes very challenging but thankfully there\u2019s an easy option for students called an unsecured education loan through which they can afford to finance education and pursue their dream of higher studies.\u00a0<\/span><\/p>\n

Education loans have emerged as a panacea that addresses the concerns of both students and parents. With the help of unsecured education loans, no student would be denied funds to finance their dream of studying in India.\u00a0<\/span><\/p>\n

Banks, non-banking financial companies (NBFCs) and other financial institutes also provide unsecured education loans in India. This article will provide information on non collateral education loans in India.<\/span><\/p>\n

Types of education loan<\/span><\/h2>\n

There are two types of education loans<\/a>:<\/span><\/strong>\u00a0<\/span><\/p>\n

1. Secured education loan – <\/strong>A secured loan is one where the student must mortgage collateral to avail the loan. Both tangible (flat, house, non-agricultural land, etc) and intangible assets (insurance policy, fixed deposits, etc) are accepted as collateral.<\/span><\/p>\n

2. Unsecured education loan – <\/strong>Unsecured loans are those where the borrower is not required to put up any type of security or collateral.<\/span><\/p>\n

Unsecured education loan in India<\/span><\/h3>\n

In a non collateral education loan, the lender does not request collateral from the student in order to avail an education loan, saving time in the loan processing and simplifying the documentation process. This is the biggest advantage of an unsecured education loan.<\/span><\/p>\n

Students have to meet certain eligibility criteria set by the lending institution like course, university etc to avail the loan. However, the interest rates are higher for education loans without collateral<\/a><\/strong> <\/span>because the financial institution is taking on higher risks.\u00a0<\/span><\/p>\n

A student cannot take an unsecured education loan in India without a co borrower as the education loan without collateral is sanctioned on the basis of the income and CIBIL score of the co borrower or the guardian.\u00a0<\/span><\/p>\n

There are other factors also which students and co-borrowers have to meet in order to avail an education loan without collateral.<\/span><\/p>\n

Purpose of unsecured education loan<\/span><\/h2>\n

Attending university may be the best decision for a student\u2019s career, but funding the education can be difficult to come by. If they don’t have enough financial aid to pay for tuition and other costs, they should think about getting an education loan.\u00a0<\/span><\/p>\n

However, before signing anything, you should look for the best education loan rates<\/a><\/strong> <\/span>and additional benefits.<\/span><\/p>\n

How to apply for unsecured education loan<\/span><\/h2>\n

Aspirants can apply for education loan<\/a><\/strong> <\/span>either online or in-person at a branch. The online process is very easy. Follow the steps to apply today:<\/span><\/p>\n

    \n
  1. Visit the <\/span>chosen financial company’s website and fill out the application form<\/span><\/li>\n
  2. Enter your personal information and property details<\/span><\/li>\n
  3. Fill out your\/co-borrower\u2019s income details to access a personalised offer<\/span><\/li>\n
  4. After the submission of the required information, an authorised person will contact the student to provide additional loan processing instructions.<\/span><\/li>\n<\/ol>\n

    Unsecured education loan- Eligibility criteria for students<\/span><\/h3>\n

    To approve <\/span>educational loans<\/span><\/a><\/span>,<\/span> the lender will typically look at the following criteria. The applicant should:<\/span><\/p>\n