Types of education loans
Education has fast become the major cost that parents have endure for their child. However, many-a-times, the cost of education becomes very difficult to finance solely on savings. And so, a need arises to borrow funds — it is probably the only way to provide quality education for the child. Many lenders are now providing education loans for various kinds of academic needs. In this article, we look at the various kinds of education loans available to customers today:
School education financing:
It might sound astonishing, but the fees of some private schools today can give the fees of many universities a run for their money. Keeping this in mind, some banks and NBFCs now provide finance solutions for the school fees as well. This allows parents to pay the fees before the start of the academic year. Also, some schools have tie-ups with lenders and allow the parents to get the education loans at lower interest rates. The applicants are advised to check the list of lenders having tie-up with the respective school before applying for education loans.
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College education (India):
This loan is provided to students who have a confirmed admission in an educational institute in India. Education loans can cover up to 100% of the tuition fees and in case of some lenders, can also cover a part of the living expenses. Some lenders (usually banks) will require an asset (house, property, insurance) as collateral for approving loans above a threshold, depending on their rules and regulations. There is also provision to pay only the principal/interest amount during the course and pay pay full EMIs later on. The applicants will require a co-applicant and in some cases a guarantor to provide additional protection to the lender.
College education (abroad):
This loan is provided to students having a confirmed admission in an educational institute overseas. Education loan in this case can cover up to 100% of tuition fees and a several other education-related expenses as well. Like the loans provided for education in India, higher loan amounts are granted to promising students. The provision to pay only the interest/principal in the duration of the course and interest later is also available here. Just like the earlier case, the applicant will require a co-applicant and guarantor.
Student refinancing:
The student refinancing option is provided to students now working, to repay their education loans quickly. The finance provided in this case is at lower interest rates (up to 100 basis points) with low education loan EMIs to help the applicant ease off his/her financial burden. In some cases, a top-up option is also available at lower interest rates.
As we saw in this article, there are different types of education loans provided to students depending on their requirement. We hope this article was helpful to you and informed you about the options available to get education loans. Have a great day!
