Factors to be considered while availing education finance
Earlier education was funded by family savings, borrowing from relatives and acquaintances, selling assets like land or property. But now the banks and financial institutions in India have been providing education loan. These study loans particularly covers the expenses like tuition fees, the living expenses in case of overseas education, materials that are required to complete the course. The banks and the financial institutions have been providing education loan in India at a lower interest rate of 12.75 % with a mere processing fee of 1–2 % of the loan amount. Hence, a lot of people now prefer the option of higher studies as it helps you to preserve the family savings, provides income tax benefits, also helps a student to take up his or her own financial responsibility and even helps in building a good credit rating.
With the rapidly increasing costs of education, it becomes difficult to support higher education entirely on the savings. Hence, educational loans have been a huge relief for the people who are seeking higher education. Around 41 % of Indian population belongs to the age group of below 20 years; this makes India the large pool for students. With the rising costs in the education sector in the recent past educational loan in India have become popular.
While availing for a study loan you should consider certain points. First of all check the eligibility of the educational loan. Loans are provided for various courses leading to graduate, post graduate, P.G. Diploma. However professional and technical courses are also taken into consideration. Check the eligible expenses of the education loans if it covers up the payable fees, accommodation charges, exam and library fees, reasonable expenses of books and materials required to complete the course. The financial institutions provide flexibility for the educational loans in India, flexibility is provided in case of repayment options, interest rates etc. A person can opt for moratorium period; he can opt for EMIs, or other available options. Incase if the person is choosing to study abroad the banks and financial institutions may issue a certificate based on the financial condition and capacity of the student, which is a must if he or she chooses to study abroad. An individual between the age group of 18 to 35 can apply for educational loan in India anytime. In case if the further study emerges there is no need to avail a new loan as a top up loan is available over the same loan. The repayment of the loan will begin after the completion of the study.
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Banks need a collateral security for a loan of above 7.5 lakh the value of the collateral should be however equal. Collateral can be any possession like gold, home, property, and bond, NSC, fixed deposit or any endowment policy. Usually parents will be the co borrower incase if the applicant is married the spouse or the husband / partner will be the co borrower.
Education loan also provide tax benefits. Educational loan in India have thus made the dream of higher education more feasible.
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