Every year, Lakhs of students in India apply for an abroad education loan. Only a few manage to receive funding from their lenders. The proportion of students who have failed to obtain funding due to an education loan rejection is way higher than those who have successfully obtained the same. In the majority of cases, candidates are not even aware of the reasons behind the education loan rejection.
This article aims to address some of the major indicators behind an education loan rejection and provide tips on how you can successfully manage to obtain funding for higher education abroad or in India.
Factors That Lead to an Education Loan Rejection
Some of the major reasons why lenders reject an education loan are listed below.
- Poor CIBIL scores
- Poor academic scores
- Chosen country for higher studies
- Chosen course for higher studies
- Insufficient documentation
Education loan rejection due to Poor CIBIL Score:
To those who have applied for any kind of loan previously, CIBIL score may not be an alien subject. The Credit Bureau of India Ltd. or as it famously called CIBIL is the major governing body that examines every loan applicant’s credit score. This is done so in order to determine an applicant’s worthiness to receive any particular loan.
When it comes to education loans, most lenders have very strict policies regarding the CIBIL scores of both, education loan applicants, as well as their co-applicants. A CIBIL score lower than 600 is one of the reasons behind an education loan rejection in a majority of the cases. In order to know whether you qualify for an abroad education loan with your current CIBIL score, get in touch with the financial team of WeMakeScholars at the earliest. Let us move on to understand the next factor which invites an education loan rejection.
Poor Academic Scores:
The application process to obtain an overseas education loan may seem easy to most of you. However, that is definitely not the case. Many students face an education loan rejection due to their poor academic performance. So what all can be considered by lenders as poor academic performance?
- Losing out on a year due to repeated failure in certain subjects leads to discontinuation of the course. This remark in a student’s academic record can be considered as poor academic performance.
- Inability to complete your course in time is also counted as poor academic performance. However, when you apply for an abroad education loan through WeMakeScholars despite having such a profile, our team can help you find alternative ways of getting your higher education funding.
- Most lenders have set certain benchmark scores for candidates in order to qualify for an education loan. Students who have completed their course after having scored less than 60% marks in their exams are less likely to get their education loan application approved by lenders.
- Being debarred from appearing for qualifying examinations can also be a cause for education loan rejection.
Chosen Country for Higher Education:
This is one of the major factors behind why many students get their education loan applications rejected. It is important to understand that while many lenders, especially the private ones promote the approval of an education loan for any country in the world, this is not the case in reality. Education loan lendersboth public and private, maintain a list of certain countries and courses for which an education loan is approved.
Some of the countries which are on the lender’s list as the best countries for studying abroad include
- The USA
- The UK
- New Zealand
Students who have been selected into universities from countries not rewound for their education system face higher chances of an education loan rejection like-
Chosen Course for Higher Education:
Most of the education loan lenders in India have a specific list of courses for which they lend funding. Students who have secured admission into any of these courses are more likely to get approval from their respective lenders.
- STEM courses: STEM stands for Science, Technology, Engineering, and Mathematics. Students who have gained admission into international universities to study in any of the fields mentioned above are less likely to get their education loan application rejected.
- Management courses
- Other postgraduate level Degree, diplomas, Certificate courses, etc.
- Job-oriented courses
It is important to note that although most lenders grant an education loan to students who have been accepted for postgraduate level courses, many of them (private lenders) do not approve of education loan applications for MBBS, Ph.D. courses.
Education Loan rejected due to Insufficient Documentation:
More often than not, lenders do not provide specific reasons why an abroad education loan was rejected. Insufficient documentation is one of the most common reasons for an education loan rejection.
Documentation is an essential part of the abroad education loan process. Especially when it comes to collateral education loans from government banks. When you pledge any of the 7 types of collateral securities against an abroad education loan, it is crucial that you provide the right documents pertaining to the asset being pledged as collateral.
The requirement of education loan documents differs from lender to lender. For example, the documents required by private lenders for an education loan without collateral are different than those required by public banks. This concept is explained well in Episode 30 of the Loanflix web series.
WeMakeScholars – One Stop Solution for All Your Education Loan Woes!
At WeMakeScholars, the financial team keeps a track of the changes in the education loan market and guides the loan applicants accordingly. Thousands of students who stood no chance of getting an education loan under any circumstances were able to secure one successfully without any hassles because they approached the WeMakeScholars team to accompany them on their journey.
So what are you waiting for? Request a callback today and get your education loan in a hassle-free manner, without paying anything in return for the services.