Every year universities and colleges around the globe increase their tuition fees, and you can’t help but cringe. Today, the rising cost of education is one of the biggest hurdles for youth and parents. The lack of finances has become a real hindrance to higher education opportunities. But that should not demotivate you! More and more students are looking for an education loan as the most viable option to fulfill their dreams. What you need to remember is that you are going to make a lifetime investment with your higher education experience.
Before applying for an education loan, consider these 4 factors:
Choose your institute wisely
Most of the lenders have a list of accredited universities and they restrict their lending activities to the colleges listed with them. Some universities are blacklisted by lenders for which your application would be rejected. If your college or university is not listed with your lenders, no need to worry you can always check with various lenders that provide an education loan based on your past and current academic scores, and the institute reputation. While opting for a loan, make sure that it just not include your course fee, but also encompass other basic expenses as hostel fees, library, examination fees, cost of equipment( if any), laptop, books. After calculating all the expenses, determine the actual loan amount you would require.
A marginal amount is the money that one needs to pay. It varies from one lender to another, in between 5% to 15% depending on the various factors such as your institute rating, course you have opted, location etc. But there are some lenders in the marketplace that can finance 100% of your education loan, with no margin money based on academic scores.
When you will research on an education loan, you will find that many lenders offer loans with a varying rate of interest. We recommend you to take your time to compare the different kind of interest they offer and go-thorough it completely. The rate of interest on the loan depends on the amount of loan sanctioned and it also varies across lenders. It usually varies in between 8.3% to 15%.per year. Apart from it, there is a processing fee too depending on the lender you are availing your loan from.
It is the time period when you have availed a loan but do not have to start repaying immediately. Most of the lenders offer a moratorium period of 6 months to 1 year after your course completion. However, the interest on the loan amount is calculated (simple interest) immediately after the loan is disbursed. You can plan ahead and pay the accumulated interest during this period so that you don’t get bigger EMIs.
Hence, it is important for you as well as for your parents, guardians or guarantors to invest time in understanding the process involved in an education loan. Everyone knows that while taking these loans, the aim is to get a high-quality education which in turn can provide you a high-paying job. So, students and parents also need to be aware of the various lenders in terms of quality and their services.
We can’t cover various other factors in one go, for that you can research online before applying for an education loan. Hope this information helps!