Education is the most important aspect of life. As quoted by Nelson Mandela “Education is the most powerful weapon which you can use to change the world.” India is an emerging country and we are focused on providing the best to our citizens. There are many education programs around the world which helps enhance one’s skills. So the question here is can you afford such education programs?
Let’s take a situation here, imagine you want to enroll yourself for an educational program abroad and your parents cannot afford it. You just turned eighteen and you think this education course would help you build a better future. You consider seeking help from your parents but they do not have the source to fund your education. You think is there a possibility to avail a loan if I am just 18 years old?
The answer to this question is a yes! You can try availing an education loan even if your age is 18. The normal age criteria to avail an education loan are between 16 to 35 years of age.
How can you avail a loan? What is the process to get an education loan? Let’s find out.
There are two types of education loan, Subsidized and Unsubsidized. Do a thorough research, if you lie in the subsidized loan category or a non-subsidized loan category. Indian government has a lot of schemes for easy availability of education loans for the under privileged, women category, etc. See if you lie in such category, so that you can avail a subsidized loan for your studies.
If you do not lie in the subsidized category, you will have to avail the loan from a private bank or so with some terms and conditions without any government aid. There are a lot of banks which offer these type of loans at considerable terms and low interest rates.
Let us brief you on how to get the right education loan for yourself,
Personal loan vs. education loan
There are a lot of instances where parents think taking a personal loan can be a good idea to fund their children’s higher education; unfortunately this is not a good idea. A personal loan has higher interest rates as compared to an education loan and also has less tenure to pay your loan off. An education loan comes with a lot of benefits which can be availed by the student as well as the parent as the loan’s sole purpose is to help getting an education.
What are the conditions to apply for this type of loan?
There are some basic requirements when it comes to availing this loan. The loan is determined on the basis of the course fees and the annual family income. If you are considering a loan amount which is less than 4 lakhs, you do not require a guarantor or collateral. On the other hand if the loan exceeds 4 lakhs you will have to introduce a guarantor who can be your father/mother and also collateral is needed. You may need to buy insurance if you consider studying abroad.
The interest rates vary from bank to bank and also on factors like, total course fees, the co-applicant and whether you are keeping collateral for availing the loan. The interest rates in India typically range from 12% to 16%. Some banks may also provide you with 9% to 10% interest rates that will be on the sole discretion of the bank.
Repayment of the loan
You can start repaying your loan after completion of the course, i.e. you do not have to pay the loan until you are studying. After the completion of course the bank gives you 6 months to 1 years’ time to find a job and start paying your EMIs. If you do not start the repayment on the given time frame, the defaults will be reported on your as well as the co-applicant’s credit report.
If you are trying to get an education loan at an early age, consider it done but you will have to be thorough with the market standards and what is best the market can offer you. Loans can be a boon to pursue your further studies, but make sure to make the repayments on time as this can cost you in long financial run.
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