With dwindling funding in the arts field, more and more esteemed private universities are filling the gap by providing competent courses in the arts field.
However, private universities have a fee system in place that deters many talented but underprivileged students.
To provide a solution to such a roadblock, the non-banking sector has devised financial products that are specifically tailored to cater to student needs.
Dealing with the non-banking sector is easier because they typically are more flexible with the loan types and repayment periods, thus fulfilling student needs better.
Often, these sectors have tie-ups with banks and other big financiers so they can afford to loan out significant sums with student-friendly perks.
Let us learn about the eligibility criteria, features, and loans without collateral systems of NBFCs.
Eligibility for Obtaining a Student Loan
It is important to dream of a successful career, and it is equally important to plan in detail to realise the dream.
Let us now take a look at the eligibility criteria that you must adhere to before applying for a student loan.
Read Through the Rules and Regulations
Certain non-banking financiers require admission documents before considering you for the loan.
Therefore, it is always wise to plan in advance.
Applying to various institutions offering a similar course is a wise idea because then the chances of getting through on the final list get higher.
Also, having a budget in mind is good, and since the institutions declare their fee structure beforehand, you get more time to choose the best available loan that suits your purpose.
Know the Interest Rate
Read through the fine print, especially that concerns the rate of interest on the loan amount.
Calculate the total sum you would have to pay across the repayment period so that you can plan your finances to that end.
Compare the loan offers made by different financiers and choose the one that has the best combination of a favourable interest rate, repayment period, approval time, and other related factors.
Understand the Flexibility of The Repayment Period
Before you opt for a specific loan available in the market, make sure it aligns with your current financial situation.
Defaulting on your loan is not good for your credit score and may squander future chances at securing a loan.
Features of The Education Loan Providers
The features of loan providers need to be studied properly before you decide on the financier you would like to proceed with.
Let us take a look:
Loan Coverage and Loan Amount
As a student, you would need to pay for a variety of facilities, for instance, hostel fees, books, exam fees, etc.
The amount might vary according to the reputation of the educational institution, its location, the nature of the course, and whether you are placing a collateral while obtaining the loan.
Understand the Repayment Terms
The repayment fine print has to be understood well to avoid a misunderstanding.
Certain non-banking sector entities allow a grace period, known as a moratorium, after the end of the course, after which you must begin the repayment process.
The Disbursement Process
With the non-banking sector, disbursement is quicker than that of banks, requiring far less documentation and less elaborate eligibility.
As a result, the disbursement of funds is quick as the approval time is minimised.
The Required Collaterals
Depending on the loan amount, you may be required to pledge collateral against the loan amount.
Typically, this happens when the loan amount is significantly high, which is unusual if you are opting for the arts field.
Look for Additional Benefits
The non-banking sector provides a lot of additional support with regard to educational loans.
With increasing tie-ups with educational institutions, you might expect a seamless admission procedure without having to shell out a lump sum for your degree.
Loan without Collateral
It is best if the non-banking entity you opt for provides the loan facility without requiring you to pledge collateral.
It is crucial because it would become a complex affair to put a family property on the line, structure the loan process, and close the whole process smoothly.
However, to obtain such loans, you must have an outstanding academic record, creditworthiness and a third-party guarantor to go forward with the process.
If you think you have what it takes to make things work, discuss the process with a suitable NBFC and fulfil your dream!
The Final Word
The non-banking sector has become a strong player with regard to educational loans.
They now have the upper hand with students because of a strong presence in the online marketplace and have grown sustainably as a sector.
The key collaborations they make with large financiers have lent flexibility to their projects, shared their risks and diversified their portfolios.
Thus, as a student, you can count on these financial entities to give you a good deal on fulfilling your educational dreams.
