A lot of students from across the globe prefer to study abroad nowadays. An essential reason behind this trend is their accessibility to unsecured loans, readily available without much hassles. It is also their preferred choice for financing international education. No doubt secured loans have their merits, but unsecured loans have emerged as a more flexible and attractive option for students seeking to fund their dreams of studying abroad.
Understanding Secured and Unsecured Loans
If you take a secured loan, it will always be supported by the collateral. Common examples of secured loans include mortgages and auto loans, where the collateral typically comprises your home or car. However, collateral can encompass various financial assets you possess. In case you fail to repay the loan, the lender has the right to claim your collateral as compensation, leading to a repossession that can impact your credit report for up to seven years.
When securing a secured loan, the lender places a legal claim or lien on the asset you use as collateral. Once the loan is fully paid off, the lender removes this lien, giving you ownership of the assets without any encumbrances.
In contrast, an unsecured loan does not necessitate collateral, although interest and sometimes fees are still applicable. Unsecured loans encompass financial products such as student loans, personal loans, and credit cards.
As unsecured loans lack collateral, financial institutions grant them based on your credit score and your history of repaying previous debts. Consequently, unsecured loans may or may not carry higher interest rates compared to secured loans.
Reasons for High Demand are Aplenty
According to a recent study conducted by a fintech company that provides unsecured loans for international education, demand for unsecured loans has surged by 200% in the last year. This is due to a variety of causes, including rising international education costs, more awareness of unsecured loans, and increased acceptance of unsecured student loans by overseas universities.
The survey also discovered that students pursuing degrees in STEM fields—science, technology, engineering, and mathematics—are the ones most likely to take out unsecured loans. This is due to the high demand for STEM degrees and the generally higher earnings received by graduates of STEM schools.
The Growing Expense of Studying Overseas:
The expense of education abroad is rising quickly. Students are finding it more challenging to afford to study overseas without financial aid as a result of this. Students who need assistance paying for their education beyond their means can turn to unsecured loans.
Fast and Simple Process:
In general, applying for an unsecured loan is a quick and straightforward process. Many lenders allow you to apply online, and they can approve loans in a matter of hours or days. For students who are pressed for time to submit their applications for international study, this is a huge relief.
Greater Loan Amount:
Higher loan amounts may be available for unsecured loans than for secured loans. This is so that in the event of a default, lenders won’t have to worry about collateral. Students who need to pay a higher tuition fee may find this useful.
Repayment Terms are Flexible:
Repayment terms for unsecured loans are usually flexible. Students can select a repayment plan based on how affordable it is for them. Students who are still determining the income they will be making after completing their graduation will find this extremely useful.
This is How to Choose the Right Unsecured Loan
It’s essential to take a few things into account while choosing a loan. To make sure you get a good deal, start by comparing the interest rates that different lenders are offering. Furthermore, evaluate the conditions of repayment and select a plan that fits your budget. Pay attention to processing fees by comparing them between lenders, particularly for unsecured loans. Early loan repayment may be an option if the lender offers prepayment options without penalties. Lastly, to guarantee you get the help and support you need along your loan journey, give priority to lenders with a solid reputation for providing excellent customer service.
You can also get assistance from study visa consultants in Gurugram, in person or through a phone call, no matter where you live, and we will help you out with a study loan.
Takeaway
The availability of unsecured loans has a major impact on the growing trend of students opting to study overseas. Although secured loans offer advantages, unsecured loans are becoming a more flexible and desirable choice for individuals hoping to finance their study abroad. STEM fields’ widespread presence, expanding acceptance by international universities, and rising educational expenditures have all contributed to an increase in the need for unsecured loans.
Unsecured loans offer students needing financial support a lifeline while the expense of studying overseas keeps rising. They are a good option because of their quick and easy application process, larger loan amounts, and adjustable repayment terms. To guarantee a good financial deal, it’s imperative to thoroughly evaluate interest rates, terms of repayment, and processing costs before choosing an unsecured loan. In the end, this choice provides students with more comfort and flexibility to achieve their academic goals.
