Things To Keep In Mind Before Taking An Education Loan

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  • 23 Jan 2023
Things To Keep In Mind Before Taking An Education Loan

An education loan is a great help for students who wish to pursue their higher studies in Indian or foreign institutions. However, like all other loans, you need to be cautious while taking an education loan. It is crucial to make an informed choice, and for that, you need to consider certain factors. Read on to know more.

Education Loan Checklist

Check your eligibility:

As a student, you can’t take an education loan alone. It would help if you had a co-applicant. You can apply with an earning parent, sibling, or relative. You should check your eligibility criteria before applying for the education loan to reduce the chances of rejection. Furthermore, you need to check the eligibility for the loan amount and the duration for which the loan is needed.

Choose the correct loan amount:

Once you are sure of the eligibility, decide the loan amount. This is a crucial factor. It would be best to borrow sufficiently, but you should also be aware that borrowing excessively can be problematic.

The more you borrow, the more you need to repay. You should make a thorough budget and list down your requirements to know exactly how much you need. However, do not be too stingy as you need to have enough money to pay for your education, living expenses, etc.

Choose the right bank:

Many lenders offer education loans. All leading banks in India, as well as the reputed NBFCs, offer education loans. It would help if you were very careful when choosing your loan provider.

Evaluate the interest rates on offer. Read the terms and conditions closely. See the EMI schemes being offered and if you feel an offer is too good to be true, perhaps it is!

Stay away from scams and frauds and stick to a reliable and bankable lender, even if the interest rate is slightly higher. Compare the rates offered by the top lenders and see which is the best option.

Choose the best repayment scheme:

Most lenders allow you to repay the loan after completing your degree and landing a job. This is very beneficial as it allows you to repay the loan yourself and not make it a financial liability for your parents.

There are various repayment schemes on offer. Choose a practical one that would help you to clear the dues easily. Do not be in a hurry to clear the loan. If your EMIs are too high, they will strain your finances, and you will struggle to clear them.

The loan will drag on for years if the EMIs are too small in volume. So, choose the correct EMI schedule based on what you can afford and clear the loan effortlessly.

The bottom line:

It pays off when you do things in a systematic and organised manner. Therefore, try taking your education loan by following the aforementioned guidelines, and you will not face any hassles.

Use the financial benefit you get from the loan and fulfil your dreams smoothly and breezy.

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