Cheapest Student Loan
The US is the preferred destination for Indians students. There were about 103,000 Indian students in the US in the academic year 2013-14, more than double the number of students 15 years ago. Engineering is the most popular major, followed by computer science, according to the US embassy in New Delhi.
With more students than ever heading to foreign universities at undergraduate and post-graduate levels, many parents in India are taking student loan in the form of secured and unsecured education loan both. Many are pledging their homes as collateral for student loan taken to meet the cost of their children’s education overseas, including tuition and living expenses.
Secured education loan is a loan offered to both Undergraduate and Post-graduation/Master students. This type of loan is taken against a collateral which can be a physical property or a fixed deposit. Eligibility of this type of loan is based on various factors such as GRE score, CIBIL and salary of the student and CIBIL and salary of the co-borrower but the amount of loan under this category is mainly decided upon the value of the property and the rate of interest is comparatively minimum among all types of education loan which varies from 8% – 10%. Also, a co-borrower is required by this type of loan.
Most undergraduate programs in sought-after universities abroad entail spending of about approx. Rs. 1 crore over four years. Princeton University charged around $41,820 (Rs. 26.3 lakh) for tuition fees in 2014-15. 1
So, in case of this kind of a program only companies offer secured loan due to two reasons. Firstly, the amount of loan required by the student is very huge i.e. average amount is over Rs. 50,00,000 which is difficult for the loan company to give without any mortgage and secondly mostly undergraduate students do not start working after the program so the loan cannot be given in anticipation of the earnings of the student.
For agencies providing such student loan, real estate is better collateral. Banks and finance companies are always comfortable lending against property, especially when the amount involved is very high, because they have the collateral in case of a default.
Consultants say over 80% of education loans have been taken with personal homes as collateral. In Mumbai, 70% of the clients offer their homes to back loans.
Unsecured education loan is a loan offered to only Post-graduation or Master students. Under this type of loan all the things such as eligibility, amount of loan and ROI are based on same factors which are: University, GRE score, CIBIL and salary of the student, CIBIL and salary of the co-borrower. The average rate of interest varies from 11% – 14%.
Under this type of loan, simple interest has to be paid by the co-borrower each month starting from the date of loan disbursement on the basis of loan ROI and the amount of loan disbursed. In case co-borrower request to reduce the amount of Interest, then he can choose a low amount called as partial simple interest ranging from Rs. 2,000 to Rs. 5,000.
Student Cover has carved a niche for themselves in the US education loan market by providing the maximum loan amount at the lowest possible interest rate. We are tied-up with India’s best financial companies which helps offer loan schemes for every type of student profile.
In-depth analysis of the financial profile of the borrower and the co-borrower are done, on the basis of which the best loan scheme from our partner financial companies are offered. We have some standard guidelines which are transparent for the student to check. On the basis of these guidelines, maximum loan amount at minimum ROI for the particular profile of the student can be offered by us which would be unmatched by any other Loan assisting firm.