Common Overseas Education Loan Problems & Solutions
27 Sep 2023
Table of Content
Pursuing higher education abroad is a dream for many students. However, the high costs involved in studying overseas can be a significant challenge. To overcome this obstacle, many students turn to overseas education loans. These loans provide the necessary financial support to fulfil the dream of such students.
However, applicants often encounter several common overseas education loan problems while availing of these loans. Let's discuss some of these challenges in education loans abroad and provide solutions and techniques to address them effectively.
Common Challenges Faced with Overseas Education Loans and Their Solutions
Following are some of the common challenges in education loans for abroad and their effective solutions:
1. CIBIL Score Issues
One of the key challenges in obtaining an overseas education loan is maintaining a good credit score. Many applicants may not have a credit history or a low credit score due to their limited financial exposure. This can negatively impact loan approval.
Solution: To overcome this issue, students can consider applying for an education loan for students with a co-applicant who has a strong credit history. The co-applicants credit score will help strengthen the loan application and increase the chances of approval.
2. Multiple Loan Enquiries and Applications
Students often face the dilemma of selecting the right lender for education loans for study abroad. They end up applying to multiple lenders simultaneously to increase their chances of loan approval.
This becomes another significant education loan problem. However, multiple loan enquiries and applications can negatively impact their credit score and create confusion during loan approval.
Solution: It is advisable to research and shortlist a few reputable lenders that specialise in overseas education loans . Rather than making multiple enquiries and applications, students should focus on presenting a strong application to their preferred lenders.
3. Academic Performance of the Applicant
Some lenders may consider the applicant's academic performance as a factor in loan approval. If the student's academic record does not meet the lender's criteria, it can lead to loan rejection.
Solution: Students can address this issue by providing additional documentation or explanations highlighting their potential and commitment to their chosen course.
This can include letters of recommendation, statements of purpose or evidence of extracurricular activities that demonstrate their dedication and aptitude in the field of study.
4. Inadequate Documents
Documentation becomes an important criterion in education loans for study abroad. Insufficient or improper documentation is a common problem loan applicants face, leading to delays in processing and approval.
Solution: Students should carefully review the documents requirement for education loan provided by the lender and ensure they submit all the necessary documents in the prescribed format. They should ensure that the documentation is complete and accurate, as this reduces the chances of rejection due to inadequate documents.
How Does Bank of Baroda Helps You Overcome the Above Challenges?
Bank of Baroda , one of India's leading public sector banks, understands the challenges students face in education loans abroad. The bank offers dedicated education loan products designed to address these challenges effectively.
Some of the key features and benefits include:
• Competitive Interest Rates
Bank of Baroda offers attractive interest rates on their education loans, making them more affordable for students and parents.
- Flexible Repayment Options:
- The bank provides flexible repayment terms, including a moratorium period, allowing students to start repayment after completing their education or finding suitable employment.
- The maximum repayment upto 180 months after course completion + 12 months
- Bank charges simple interest during Moratorium period.
• Wide Range of Expenses Covered :
- The loan covers various expenses, including tuition fees, accommodation, travel, books, and other educational expenses, ensuring comprehensive financial support.
- Need based Funding.
- Bank of Baroda provides upto 100% finance.
• Collateral and Co-applicant Options :
Depending on the type of education loan, amount and terms, the Bank of Baroda offers different collateral and co-applicant requirements, providing flexibility for borrowers and also provides collateral free for select programs and institutions.
• Guidance and Support
Bank of Baroda extends its unwavering support and guidance to you through dedicated loan counselors stationed at our Education Loan Sanction Cells (ELSCs) strategically located in 11 major cities across India, as well as through our vast network of over 8200 branches nationwide.
• Approval process :
- Customized loan solutions based on the applicant's circumstances.
- Simplified loan application and approval process.
• Documentation :
Assistance in document preparation and submission.
- Presence of branches/subsidiaries across 17 countries
- Benefit of Tax under section 80(E)
Also Read: A Complete Guide on Education Loan
Obtaining an overseas education loan can be a significant step in realising your dream of studying abroad. However, it is essential to be aware of the common overseas education loan problems and to implement the right solutions and techniques to overcome them.
Documents Required for Personal Loan
How to Transfer Your Existing PPF Account to Bank of Baroda?
Technology for a Greener tomorrow
What Is Overdraft Facility? All You Need To Know!
Money Transferred to Wrong Account Number? Here’s How to Get it Back
A Complete Guide on Education Loan
Step-by-Step Guide: How to Insert ATM Card into an ATM Machine?
Give Your Home a Festive Makeover with an Instant Personal Loan
Know how to get FASTag for your vehicle
A Step-by-Step Guide to Setting Your New ATM Card PIN
Step-by-Step Guide: How to Insert ATM Card into an ATM Machine?
How to Withdraw Cash from Your Credit Card at an ATM: Step-by-Step Instructions
Easy as 1-2-3: How to Deposit Cash Through an ATM
Decoding ATM: Full Form, Meaning, and Usage Explained
What is Digital Rupee and how does it work
How To Activate Debit Card
A Complete Guide to Get a Loan Against an FD
Understand Credit Card Features, Benefits and Tips
Types of Credit Cards
The contents of this article/infographic/picture/video are meant solely for information purposes and do not necessarily reflect the views of Bank of Baroda. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Bank of Baroda or its affiliates to any licensing or registration requirements. Bank of Baroda shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
Education Loans vs. Self-Finance to Study Abroad
Studying abroad is a dream for many students. It allows them to receive a quality education besides exploring new cultures and gaining global exposure; however, financing an international education can be a significant challenge for most students.