Education is the lifeline for every student. As a student, you have high aspirations of securing the best education to get your dream job in the future. It is also important to note that being a student, it might be difficult to get instant funds to finance your educational dreams. But there is a solution to your immediate cash needs, an education loan.
An education loan is the most preferred and convenient way to secure money to achieve your dreams. These loans offer instant approvals and are generally popular as education loans without collateral which means no requirement of asset pledging with the lender.
This post explores the key features of an education loan and how to avail of one.
Key Features of an Collateral-Free Education Loan
Understanding the key features of education loans is essential for making informed decisions that align with individual needs and goals.
Here are the features of an education loan without collateral:
1. Collateral-Free Borrowing
Education loans without collateral alleviate the burden of borrowers needing to pledge assets like property or jewellery as security. This feature makes the loan accessible to students from diverse financial backgrounds without requiring tangible assets.
2. Access to Domestic and International Courses
These loans cater to domestic and international courses, promoting instant education loans by providing opportunities to individuals regardless of their socio-economic status or nationality.
3. Comprehensive Coverage
Depending on the lender’s policies, education loans may cover a significant portion or even the entire cost of educational expenses. It includes tuition fees, accommodation, books, equipment, and other related costs, ensuring students have adequate financial support throughout their academic journey.
4. Competitive Interest Rates
While interest rates for unsecured loans may be slightly higher than secured loans, education loans without collateral often offer competitive rates. This feature enables borrowers to access funds at reasonable interest rates, making education financing more affordable in the long run.
5. Student-Friendly Repayment Terms
Repayment terms and conditions for these loans are designed to be student-friendly. They may include moratorium periods, during which borrowers are not required to repay loans until after completing their course or for a specified period after securing employment. This flexibility eases the financial burden on students as they transition into the workforce.
Process to Get an Education Loan as a Student
The process of obtaining an education loan as a student without collateral involves the following steps:
1. Research Lenders
Research banks or financial institutions offering education loan without collateral. Focus on those with favourable terms and student-friendly policies.
2. Check Eligibility
Understanding and meeting the eligibility criteria is fundamental. It includes factors such as admission to recognised institutions, Indian nationality, and age requirements. It’s also important to confirm if co-applicants or guarantors are necessary and gather the required income and identity documents. It will save time and effort on your applications.
3. Complete Application
Please complete the loan application online/offline accurately, providing details about your course, institution, loan amount needed, and repayment preferences. Then, submit it along with the required documents.
4. Await Approval
After submitting your application, wait for the lender’s approval. If approved, the loan amount will be disbursed directly to your educational institution or you, depending on the lender’s policy.
5. Use Funds Wisely
Use the loan amount wisely for educational expenses, including tuition, accommodation, books, and other essentials. Begin repaying the loan according to the agreed-upon terms and stay informed about your responsibilities.
Benefits of Collateral-Free Education Loans
1. Pre-Approved Instant Sanction
Customers receive instant sanction letters online from their homes for their pre-approved education loans.
2. Tax Benefits
The loan qualifies for tax benefits under SEC(80E), allowing for a 100% deduction on the interest paid without any upper limit. This feature effectively reduces the interest rate. Detailed calculations can be checked using the Tax Benefit Calculator.
3. Easy Application
Applying for an education loan is simplified through the bank’s Internet banking facility, requiring just a few clicks. This easy application makes the process simple and convenient.
4. Rapid Turnaround Time
This instant approval feature significantly reduces the time for loan sanction from several days to just a few minutes.
Conclusion
Securing an education loan without collateral is an accessible option for aspiring students to pursue their academic dreams without financial constraints. With features like collateral-free borrowing, comprehensive coverage, competitive interest rates, and student-friendly repayment terms, these loans empower students from diverse backgrounds to access quality education.
By understanding the process of obtaining such loans and utilising their benefits, students can confidently begin their educational journey, and secure the knowledge that their dreams are within reach. Collateral-free education loans provide immediate financial assistance and pave the way for a brighter future filled with academic success and professional achievements.
