Every lender has their own prerequisites for getting approved for a student loan. Lenders may look at your employment history, credit score, debt-to-income ratio, and admission status at your school. One of the most common reasons why a student might not qualify for a private student loan is because they don’t meet their lender’s Credit Score criteria. Read this comprehensive guide to guarantee your education loan gets approved.
A Credit Score is a number that lenders use to measure how likely you are to be able to repay debt. If you’ve never borrowed or had to pay back the money before, this number may not be high enough to qualify you for an overseas study loan. If you’re no stranger to borrowing but have missed or been late on payments, your credit score may have also been impacted and can affect your chances of getting approved.
Having a limited or less-than-awesome credit history can make getting approved for a private loan difficult, but there are steps you can take for your education loan approval guarantee
Maximize Scholarships & Grants
Before you consider opting for a private student loan, make sure you have taken advantage of every option to pay for college that is available out there. Make sure you’ve maximized free money options such as college scholarships and grants, and have also considered federal loans. Planning for college abroad can be overwhelming, but some people and resources can make it easier for you. Talk to your counselor and double-check that you’ve taken advantage of everything accessible to you before opting for a private student loan.
Consider A Credit-Worthy Consignee
If you are not able to qualify for a loan on your own, ask a credit-worthy person in your contact to apply for a loan with you as a co-signer (someone who signs for the loan with you). A cosigner with secure employment history and good credit may be able to help overcome your limited or negative credit history and will guarantee your qualification for the loan.
Many students ask their parents to be a consignee, but if that is not an option for you, you can also ask your guardians or relatives to be your cosigner. Just make it a point to have an open and honest discussion with your potential cosigner to safeguard that you’re making a responsible decision.
It’s necessary to understand that your cosigner is equally answerable for your loan, so that means if you miss a payment in any month, it will have an impact on your co signer’s credit as well as your own. After you’ve met certain requirements from your lender, like making a certain number of on-time loan payments, you may be able to release your cosigner.
There’s also an option for parents or creditworthy individuals who wish to help. If they want to take the responsibility for paying for part of your education, they can choose to take out an en education loan in their name, usually called a parent loan.
Check Your Credit Report
You should check your credit once a year to get a better understanding of what is impacting your score. By keeping an eye on your credit score and starting with simple steps like making on-time payments and paying off your balances, you’ll build your credit health in no time.
For students who are new to credit, talk to your parents and guardians about opening a secured or student credit card and perform good credit habits like keeping your balance low and never missing a payment.
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Nationality & Tax Status Of The Co-Applicant
Banks and other lending institutions grant both secured and unsecured student loans only to the residents of the country. This is the same for co-applicants, co-signer, and guarantors as well. If the guarantor, in case, is a foreign national, the education loan application would be rejected.
For guaranteeing that the loan application is approved, the applicant, co-applicant, and guarantor must be residents of the country and should come under the range of income tax laws. However, people who have currently settled abroad but if their income falls under the jurisdiction of income tax authorities are qualified to be guarantors or co-applicants.
Recognized University
This is mostly applicable in the case of unsecured education loans. Before sanctioning the education loan, the lenders authenticate the credentials of the university you have enrolled for a course. Educational institutions that are very popular, top-ranked, or are highly accredited are given priority over the ones that are neither top-ranked nor accredited. Almost all banks and NBFCs maintain a list of well-known and recognized institutions and universities around the globe.
Language Requirement
English is the most common language in numerous countries worldwide. Anyone applying for a course in universities in countries abroad needs to submit proof of their expertise in both written and spoken English. Students usually do this by appearing for TOEFL & IELTS tests. If you are not able to secure satisfactory grades in those exams, you usually are not qualified to pursue higher education or work in those countries. So, always make sure that you go prepared for the exams as it is an important factor in guaranteeing your education loan approval.
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