Smart Education Loans for Smart People
Hey there! Yes, you, who has cracked all the entrance examinations that the world offers, but faced with perplexity as to how to fund your future.
Yes, the cost of education is rising both in India and abroad. This trend is seen across institutions which offer higher education courses, leaving them little option apart from going for education loans.
But are you getting the best education loan out there in the market? Does it cover all your requirements and what are all the things that you need to keep in mind before taking an education loan
Taking all these factors into consideration, here is a list of things to do, to be smart about your education loan
1. Know How Much You Need: Before going for an education loan compute how much funds you have and if any part of the amount will be covered by scholarships provided by the universities of your choice.
2. Know Your Institution: Banks and NBFCs have tie ups with specific institutions and the loan amount will vary based on the ranking of the institution and the lender's own criteria, check if you are off to one of these institutions and you could benefit.
3. Compare: Once the loan amount has been decided, choose the one with terms that suit you and your co-borrowers (mostly parents) by comparing multiple banks about the rate of interest and tenure.
4. What Does Your Loan Cover: Education loans comprise of tuition fees, accommodation, transport and even mess charges? Do check if your requirements are met in the loan you are applying for.
5. Break Your Loans: Most institutions do not need the whole amount at one go, hence it is smart to break the loans as per the requirement which will result in ease of interest burden, a combination of own funds and bank funds would serve you well
6. Terms of Repayment: Once the loan amount and bank have been finalized, next comes the part of repayment. You need to decide how you want to repay the loan. That is what type – Simple interest, EMI or moratorium. Simple interest payments will reduce the burden on you after graduation as part of your loan will be paid by your parents. Try and avoid moratorium as the burden after graduation will be high.
7. Keep all the documents required ready. This where most of the loans get rejected even though the borrowers are eligible for the loan. Know what are the documents that are required before hand and keep them ready.
A Short Note Before You Go
Education is the best gift that an individual can get and these seven guidelines will help you get the best loans for your education thus making you a smart borrower. An education loan is your first brush with credit and on consistent repayment within schedule would help you build a good credit history.