The first step towards financial independence for students requires them to hold a degree in their preferred academic field. Then comes the future job prospects, where opportunities and circumstances will lead them to a fruitful career and a fulfilling life. However, to reach this dream, there’s a huge deal of financial hurdles to overcome. Although overseas education loans have addressed these issues tremendously, many are still confused about how to apply for one, given the many misconceptions surrounding this particular topic.
In this blog, we’ll address everything you need to know about applying for an overseas education loan, how to tackle some of the drawbacks effectively and secure the best possible financial support.
Common Challenges and Misconceptions
When you’re about to venture into unknown territory, there are bound to be some challenges ahead. Especially when it comes to applying for an overseas education loan, doing proper research and study are extremely important. We’ll give you a thorough explanation of why. But before that, let’s look at some of the challenges involved.
- Requiring loads of documents for the application process.
- Various loan options to consider leading to confusion.
- Uncertainties about long-term commitment.
- Repayment concerns and dreading interest rates.
- Application not getting approved due to discrepancies in eligibility criteria.
- Maintaining a good credit score.
Understanding these scenarios thoroughly will help students acquire an overseas education loan for their studies abroad without any complications. Now, let’s dive deeper.
The Dos of Applying for an Overseas Education Loan
Here’s a list of what you should do when you’ve decided to get an overseas education loan.
1. Apply Early
Humans have this bad habit of procrastinating, but when it comes to sensitive issues such as getting a study abroad education loan, do not wait until the last minute to initiate the loan application process. Make a decision 6-8 months in advance. It is a lengthy process and takes time. But hold on—we know what you’re curious about. 6-8 months doing what exactly? Right. We’ll answer the questions for you.
- Taking time to research various lenders.
- Gathering all necessary documents before they ask saves time and avoids rush.
- Understanding repayment terms and developing a realistic budget.
Pro Tip: Maintain a well-organised file system to store all your documents electronically or physically. Ensure all the documents are genuine, up-to-date, and contain clear and accurate information.
2. Research Thoroughly
As previously mentioned, researching thoroughly gives you an automated boost that drives you closer to acquiring that loan. Here’s a piece of advice: Don’t settle for the first lender you encounter. Different lenders have different rates for their services, so you have to compare them and choose wisely. Here’s how to conduct a comprehensive exploration:
- Compare loan offerings from banks, non-banking financial service providers, or other government schemes.
- Consider interest rates, repayment terms, processing fees, and prepayment penalties.
- Use online resources or consult education consultancies.
- Consider lender reputation, customer service, and additional benefits like education loan insurance.
3. Understand the Eligibility Criteria
Before diving headfirst into a pool brimming with the convenience that comes from education loans, you need to make sure you’re eligible. The process is pretty straightforward. Each lender has their own eligibility criteria that applicants must meet inorder to qualify for a loan.
- Minimum marks in previous academic years or standardised test scores like GRE, GMAT, TOEFL, or IELTS.
- University’s accreditation or ranking requirements.
- Financial standing of applicant and co-applicant, including credit score, income stability, and existing debt obligations.
4. Develop a Clear Repayment Plan
Repaying loans isn’t at all an easy process, but if you have decided to get one, you must be prepared for whatever comes along with it. That’s why you need to plan. Here’s how to approach this:
- Research average starting salaries in your chosen field post-graduation. That will help you repay loans without too much stress and uncertainty.
- Explore repayment strategies like fixed monthly payments, graduated payments, and extended repayment plans.
- Create a comprehensive budget considering living expenses, health insurance, and travel expenses.
The Don’ts of Applying for an Overseas Education Loan
As we’ve provided a comprehensive overview of the “dos” to empower your decision-making process, let’s move on to the “don’ts” of applying for an overseas education loan. We’ve summed up whatever you’ve understood in this blog so far and highlighted some underlying dangers you need to be aware of.
1. Don’t Rely Solely on Loans
Education loans cover all financial aspects of a student’s study abroad journey, but is it okay to rely on these loans alone? No, it’s not. Exploring all funding options is very important. Why? Because the more you borrow, the higher your debt burden will be after graduation. What can you do?
- Explore alternative funding options like scholarships, grants, and part-time jobs.
- Avoid high interest rates on education loans.
- Have a backup plan or additional income sources.
- Pursue paid internships or study-abroad programs.
- Maintain a healthy credit score by minimising student loan debt.
2. Don’t Choose a Loan Provider Hastily
Nothing good comes from last-minute hassle. Take the time to consider various loan service providers and look through the rates they’re charging you. Seek advice from trusted financial advisors or individuals who have experience with overseas education loans.
3. Read the Loan Agreement Carefully
The loan agreement includes all the terms and conditions of your loan. Do not skip it! Sure, it might contain a few lengthy pages, and the assistant might’ve provided you with all the information you need, but don’t just skim the pages casually. There could be hidden passages that do not resonate with your goals. Here’s where to pay close attention to:
- Interest Rates: This influences the overall cost of credits or borrowings. Find out whether the interest rate is variable or not.
- Repayment Terms: This covers the loan period, repayment method, and any penalty fees for not paying the loan on time.
- Fees: Look out for the rate of processing fees, origination fees, late payment penalties and so on.
- Disbursement Process: Know how and when the loan will be credited to your bank account.
Conclusion
By following these comprehensive “dos” and “don’ts” of applying for an overseas education loan, you can approach the process with a clear understanding. We encourage you to continue exploring resources and seek advice from financial experts like Unipay Forex when applying for your first overseas education loan. Now, embark on your journey towards pursuing your educational dreams abroad!
