The cost of education is rising day by day. There used to be a time, where student used to go to the school and learn from academic books and come back home. In today’s world the scenario has completely changed. Even at an early age, there are educational institutions which not only provide academic education but they also provide many other activities. These activities of course is not complementary, you will have to shell out some more money excluding the academic fees.
This is just a tip of the iceberg, once a student thinks of further studies, there are even more complications. Not all of us can afford good education. What can be done in such a case?
Education loan! As the name derives, an education loan can be availed from various banks at easy interest rates. There are many types of loans available in the market like a personal loan, car loan, etc. which serves their particular niche. Similarly an education loan can take care of your fees structure until your studies are done.
Many of us have the perception that you can only apply for an education loan if you are going abroad. This theory is absolutely wrong! You can apply for this loan even if you are planning to study within your country. The terms and conditions for an education loan remains the same either you are studying abroad or in India. Instead the terms are easy for students who would like to study within the country, i.e. you do not have to work until your education is done and also you don’t have to take insurance on the loan.
Once decided that you are going to study within the country, you should know about how to apply for an education loan and what are the terms and conditions associated to it.
To help you get started, we will sight you a few important points on the same,
The very first step is to check your eligibility. Make sure the collage or institute you are planning to pursue your studies from should be a reputed one. Then try checking your own eligibility like age, qualification, type of course, cibil score calculation, etc. prepare your application with all the necessary documents needed and start your research.
Compare all options available
Once you know your eligibility, time to compare all the options available in the market. Education loan can be taken for maximum of 7 years, so it is important to know and understand who has the best rate of interest to offer. There are processing fees as well; different banks charge different processing fees. You can also negotiate on the processing fees and interest rate with the bank, if you have a great cibil report.
The Co-signer and collateral
There are many banks who ask for a co-signer or collateral if the loan amount exceeds five lakhs. A co-signer can be your parent, spouse, sibling, who will your debt in case you fail to make the payments on time. A co-signer is always on hook until you don’t close the education loan. Similarly, if you fail to make the payments on time, the lender has the power to auction your collateral and recover their debt.
Beware of hidden terms
The lender usually gives you time to start the EMIs from 12 to 18 months. But do not take it lightly, the lender can start deducting money from your account and if you do not have sufficient funds, you will face a lot of problems like late penalties, etc. Not to forget, it will also affect your cibil report which can cause problems for you in the future.
If you happen to pay all the EMIs on time without fail, this practice can open gates for future loans like car loan, bike loan, home loan, etc.
This type of loan can help you in many ways, not only you can complete you education with ease but also can bank on good payment behavior. Just be aware of some important facts of the loan and make life easy in the future.
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