As a parent, you are always thinking about your child’s future, on how it will turn out, what’s good and what’s bad for my child, etc. The best gift parents can give a child is education. Education plays an important role in everyone’s life. It can act as a ladder towards a secure future for your child. But have you ever given a thought, what would be the cost of studies, if your child thinks of pursuing post-graduation or considering studying abroad? You must be thinking I still have a lot of time to think about it and plan on which course my child should opt for and how it will be beneficial, but time flies and in no time you would be banging your head towards the wall on how you will manage your child’s studies in your existing tight budget.
Do not worry; we have the perfect solution for you! Education Loan! An education loan can ease your tension on how your children will pursue their further studies with no complications at all. There are a lot of banks in India who are offering education loan to students for pursuing their higher studies. This type of loan is specially designed for students to supplement their studies.
Now you must be thinking, now that I know there is a product in the financial market which can help me with a loan for the child’s further studies, how do I apply it? Are there any terms associated to the same? Is availing an education loan that easy or is it hard?
We have answers to all the questions you have in regards to education loan and how to avail it,
The basic criterion to get an education loan is that, you must be a citizen of India. You can avail the loan only after you take admission for the desired course. The higher education collages also co-operate with you and help you with the necessary documents required. Once you have applied for the course, then you can start hunting for banks that provide education loans, and the procedure and criteria’s are as follows,
How much should I have to pay?
The bank does not fund your whole term fee; you will have to contribute some amount from your pocket. The bank will only lend you 80% of the fees amount. There are chances if your loan amount is less, the bank may fund the entire fees amount.
Are there any processing charges like other loans?
Absolutely! There are processing charges. The processing charges depends from bank to bank and from amount to amount, there are some banks which would take a lump sum amount as processing charges and some will count on percentage on the loan processed. It is advised to do thorough research on the loan options available in the market.
Do I have to produce collateral to the bank?
It all depends on the loan amount. For instance, there are universities in India who provide courses for a cheaper price on the other hand; if you are thinking of pursuing your education in top tier collages then you will have high fees structure. For higher loan amounts, you will have to provide security to the bank.
Do I need a guarantor?
If the loan amount is a bit on the higher side but not very high, the bank may ask for a third party guarantor. In such cases, you don’t have to keep security as the guarantor acts as collateral. If in future you default your payment the guarantor has to pay up instead. Just make sure, the third party person has a good credit score, as this will boost your loan process towards early sanction.
What are the payment terms?
The payment terms are easy. The bank will not ask for any EMIs until you have completed your course and also you get some more additional time from the bank to get a job and settle down before you start your monthly installments.
Any type of loan is a huge commitment. It is always suggested to get your homework done before you proceed to avail a loan. This will not only give you a clear picture on what is happening in your current loan market, but will also help you save great bucks in long run.
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