Collateral and co-signer-free loans are currently one of the most sought-after credit options for students or borrowers. Thus, their financial burdens are reduced. Moreover, students are provided with assistance in managing other obligations that come along with it.
Studying abroad is perceived as a gateway to a brighter future. Students abroad help in equipping students with the necessary skills. It also offers an enriched perspective to fit and excel in a highly competitive environment which is continuously evolving.
The process of planning and eventually getting admitted to a dream university is a complex process. This condition mainly implies when it comes to financing the course. Applying for loans poses various drawbacks due to the complications involved.
Various difficulties such as prolonged processing time, excessive paperwork, tedious credit assessment, pledging security against the loan, etc., are all considered setbacks when opting for a loan. Collateral and co-signer-free loans have been emerging as a more conducive option for students. This is because they eliminate or reduce the complexities mentioned before.
This article offers the top five reasons on why a student must consider choosing collateral-free loans:
1. EFFICIENT AND EASY PROCESS
The entire process of application and procurement of funds has now become quick, reliable and efficient. There is zero involvement of middlemen and there is no need for additional paperwork. This has become a hassle-free experience for the students. This advantage can be attributed to the advantage of technology, all-around digitisation and deeper internet penetration across households.
2. LOANS FOR TUITION AS WELL AS LIVING COSTS
Students opting to study abroad have to bear the burden of other costs such as accommodation, books, travel, laptop library and other miscellaneous expenses in addition to travel. Collateral-free loans, being cognizant of the financial situation of a student, covers these additional expenses for the student.
3. MERIT-BASED LOANS
Loan applications are generally processed based on the worthiness of the credit of the applicant or their family income. This condition generally obstructs students from obtaining loans. Collateral-free loans are merit-based loans. This is provided on the future earning potential of a student rather than their credit scores or family income. This makes it a more beneficial and convenient option.
4. FLEXIBLE REPAYMENT OPTIONS
Collateral-free loans have an advantage of a flexible repayment plan with maturities. The tenure for repayment ranges from 5 to 20 years along with a period of forbearance. The repayment process is made much easier and less cumbersome for students. The students or borrowers are encouraged to focus more on their education without having to worry about the repayment.
5. NO PREPAYMENT PENALTY
A prepayment penalty is a fee charged by some lenders. This is mainly charged on early repayment of a loan or a part of it. Collateral-free loans offer no prepayment penalty. Thus, it prevents the student from forgoing extra charges due to early repayment of the loan.
Due to its advantages and popularity earned over time, collateral and co-signer-free loans have made an impact on the finance and banking industry. This provides the students with a hassle-free process. Also, it offers a reliable source of funding for domestic or overseas education.
Collateral and co-signer-free loans are currently one of the most sought-after credit options for students or borrowers. Thus, their financial burdens are reduced. Moreover, students are provided with assistance in managing other obligations.
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