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• By Aspireeach
• Finance

How to Compare your Education Loan / Types of Edu Loan / Deciding Factors / Types of Loan Providers

Comparison of Education Loans :         When you want to buy a smartphone then what is the first step you do? You go to Amazon, go to Flipkart & then go to some retail store and check for the best rates & then you wait till festive deals to arrive & then buy it. That’s the same thing how we assist you with Education Loans, we help you to compare your Education Loans with different Loan providers & not just go with one. 

Comparison of Education Loans :

        When you want to buy a smartphone then what is the first step you do? You go to Amazon, go to Flipkart & then go to some retail store and check for the best rates & then you wait till festive deals to arrive & then buy it. That’s the same thing how we assist you with Education Loans, we help you to compare your Education Loans with different Loan providers & not just go with one. 

Traditionally, you just used to go with one Loan provider which used to be the Bank generally situated near to your house. Your Father probably knew the Branch Manager of that bank and to meet his targets he used to push us for loans with a Higher Rate of Interest (generally Loan against property or Personal Loan). Don’t fall for that, you’re generation ‘Z’ so you better be in control of what you want. I don't intend that you go against your parents but you should convince them to check your Loan eligibility with at least 2 or 3 different loan providers. In this manner you won't be just comparing the Rate of Interest and the Sanctioned Amount but you also will be able to check what other benefits the checked loan providers are providing you. There are many other benefits which are provided by Loan providers (you can check the Loan Terms post in this Blog). 

It's obvious that you must have sufficient time in your hand to do this comparison. We have seen many students procrastinating this process and later on pushing the panic button (this includes my close friends and family). That's the reason why we educate you to start with the process early on.

 Education Loan has two types:

      A.  SECURED LOAN | COLLATERAL LOAN -

âž”   Secured Loans are the Loans where you’ve to mortgage your property, It can be in the form of House, Shop, Land or Fixed Deposits.

âž”   These type of loans are generally provided by Banks. Some NBFCs also do provide collateral-based loans.

 B.  UNSECURED LOAN | NON-COLLATERAL LOAN

âž”    Unsecured loans are the loans wherein there is no requirement of mortgaging any property.

âž”    Unsecured loans are especially beneficial for students who are unable to offer collateral but have an extraordinary academic track record.

A question must have sprung in your mind that on what basis a Non-collateral or Unsecured Loans are sanctioned?

 Factors for Non-Collateral Loans?

1.  GRE Score - This is the most important factor to decide the Rate of Interest (ROI) that you’ll be receiving. Higher the GRE score, lower is the ROI & vice versa.
2. IELTS/ TOEFL - This is also considered in overall touchpoints of Non-collateral loans.
3. Past Academics - This states your consistency of performance and will display your future ability to perform.
4. University - You don’t have to necessarily show admits but on the basis of applied universities the credit team of loan providers would be able to judge the amount of loans and ROI. Loan providers generally do have a Grading system with list of University. Better the University, higher is the chance that your loan is approved.
5. Course - This is also a deciding factor that helps a loan provider understand the job prospects for the student. If you’re going for a STEM course then your chances of securing Non-Collateral Loan increases.
6. Credit History of Borrower and Co-borrower - Over here credit history of both are checked. If there is any default in payment of pre-existing loans then loan providers can question you over it and may even decline the credit.

 
Types of Loan Providers :

1. Banks - There are 2 sub types in these too i.e. Public Banks & Private Banks. Public Banks generally offer you the lowest Rate of Interest but they would require a collateral compulsory whereas Pvt. Banks can also do a Non-collateral loan but at bit higher Rate of Interest. Co-borrower is compulsory over here. 

1. NBFCs (Non Banking Financial Co.s) - These are the Private Financial institutions who are specialists in Loan fields only. They can provide you both Collateral as well as Non-collateral Loans. They would need a Co-borrower on the loan structure.
    
2. International Lenders - Those are Foreign based lenders who can fund you the Cost of Education. Their rate of Interest are also very attractive. They usually fund you in US dollars & disburse directly to University.

If you're reading this then we appreciate your quest towards Education Loan. Our aim is to make sure that no one is deprived of this knowledge and to make everything available in this blog is our motto. We have a team of Education Loan Advisors who can also help you with the same (pssst - we don't charge any fees for our service). You can take benefit of our service by simply registering to the below given form. Register here - https://forms.gle/CbbcZ3x2fBpbWWgA7