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6 Tips Before Applying For An Education Loan

By Author: neha sharma
Total Articles: 1245

"Securing a degree from a premier institution is a dream for many students. Earlier, children coming from the lower segment were unable to fulfil their aspirations as they faced financial restrains. Nowadays, students can take a loan from the bank and secure their dreams. This kind of loans are called as education loans.

Students avail an education loan to pursue their higher education from a reputed institution of their choice. However, before approaching a bank for acquiring the loan, there are some points to remember:

1) Evaluate expenses: One of the critical factors before applying for an education loan is to gauge the costs involved such as the value of the course, availability of financial aid, contribution of family members, etc. Also, check out for deals from the banks. Draw comparisons between different banks and then apply for the loan.

2) Check for financial aids: Ensure you have the necessary financial documents such as scholarship, grants, etc. in place. These provide enough financial support and need not be paid, unlike education loans. It is advisable to take up mortgages when you face a financial crunch.

3) Check for options: Certain banks and financial institutions are associated with some colleges and courses that they provide an education loan for. In case the lender does not have the desired college, you can check for other options.

4) Need for a security/collateral: Students are the primary borrowers. However, banks ask for co-signor. They could be one of your parent’s or your guardian. If you are married, your spouse can act as a co-signer. If the loan amount is high, you will have to provide collateral in the form of fixed deposits, etc.

5) Choose an appropriate tenure: Some borrowers take a loan with longer tenure because of lower EMIs. However, that increases the interest rates. If you believe there are chances of better job prospects after the conclusion of your course, you may opt for shorter tenure. This way the loan will be less expensive, and you can repay them quickly.

6) Make payments during and after the course: This factor comes into picture especially if wish to study abroad. Generally, such students work for a living and earn in dollar or pounds. It will help you to repay the loan amount instantly at the same time it will add up to your work experience. It could also decrease your interest rate.

The education loan procedure is simple and convenient. Following is the eligibility factor:

1) You should be an Indian national.
2) You should have secured admission to a diploma/post-graduate course in India or overseas.
3) You should be within the age bracket of 16 to 40 years.
4) You can avail a loan amount of INR 10 lakh for studying in India. If you study abroad, the loan amount can go up to INR 20 lakh.

The society we live in values education and consider it to be a matter of pride. While an education loan can be the ticket to your dream college, it is better to get your facts right and then enrol for the right one.

Author Bio:- Neha Sharma is an aspiring student in the field of finance. She spends her free time reviewing the latest apps introduced into the market. Check out her work as she talks about an education loan.

Total Views: 12Word Count: 553See All articles From Author

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