Things to Keep in Mind While taking an Education Loan
With the rising inflation in the field of education,it has become costly in the recent times. It is not possible to support education totally on one’s income and savings. Borrowing from the known people also becomes against self-respect and this might further hamper relationship between the borrower and lender. Hence, it’s always right to fund education through a higher education loan. Opting for traditional finances will burn your pocket as it has high interest rates and they do not offer flexibility in the repayment options. Study loans have proven to be boon for the students aiming higher studies within the country or overseas.
The higher education loan is given by the banks and the non-banking financial institutions. These banks and the NBFCs give loan at a lower interest rate of 12.75 % with a nominal processing fee of 1–2 % of the loan amount. An education loan requires long term commitment as the amount involved is high hence you should choose your repayment option accordingly. The student loans also offer moratorium period that he or she can start the repayment of the loan after 6 months of getting a job and 1 year in the attempt getting the job. This provision offers a peace of mind to the student who hasbeen wanting to seek higher education. The higher education loans particularly aim on the costs of education and the materials involved liked the laptops, books, study material. Some of the educational loan also provide travelling expenses to a certain extent.
But its always wiser to opt for a part time job if the student wishes to study overseas which will also reduce the burden of the loan. He/she can also apply for scholarships and the grants which are provided by the government which will considerably reduce the loan amount. Also the student should start resorting to sedentary lifestyle.
Here are a few things one should know about educational loan in India :
Check the eligibility of your educational loan. Loans are given to pursue higher education like graduation,post-graduation and post-graduation diplomas. Verify whether your college is approved by the government. Nowadays higher education loan also considers professional and technical courses.
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Know the expenses covered by our education loan. Check whether it covers living expenses, traveling expenses , costs of the required study material and other reasonable expenses required to complete the course.
Enquire about the loan limit. The loan limit differs incase if the person is aiming for education in the home land. The loan amount for education in abroad is more as the standard of living is quite high in the other countries.
Always sit and discuss the option of repayment with your family as it involves a long term commitment. Decide whether you want to start repayment immediately or opt for EMI or go for moratorium period.
Be clear about your loan amount, the interest rate which the loan is availed, the tenure of the loan and the option you have chosen for the repayment of the loan.
Higher education loan have therefore made dreams of lakh of students turn into reality.
Source: http://www.imfaceplate.com/shyamolishah1/things-to-keep-in-mind-while-taking-an-education-loan
