TIA EDUCATION DESK
With the cost of education skyrocketing with every passing year, it has become more and more difficult to manage them single-handedly. This is where instances of getting an education loan in India have become very important. An education loan is a bit different from the other loan instruments, and hence, there are many questions that arise when it comes to this type of loan.
The loan is repaid by the student in whose name the loan papers have been sanctioned. And unlike other loans, repayment for an education loan starts once the student completes his or her course. Once you have decided to take a loan and asked around for quotations, it is in your best interest to work out the EMIs for each one of them. You can then decide which lender you wish to go ahead with, based on the interest rate and EMI you will pay every month.
- Choose a course
If you are considering further studies, before searching for education loan providers, you need to do thorough research on the course you intend to pursue. Once you have narrowed down the course, you can then write to the college, estimate the course fees, and apply for an education loan in India accordingly.
- Do enough research on your institute
There are many scholarships awarded by colleges and institutions in India and abroad. However, different colleges and institutes have different provisions for the same. Therefore, you should call the colleges or institutes where you intend to pick the course and ask for their provisions. Scholarships and other such provisions tend to reduce the financial burden and reduce your education loan amount as well.
- Know your total cost over EMI
There are people who prefer taking loans for a longer tenure so that their EMI would be lesser, i.e. they would pay back lesser to the lending institute every month. However, this causes the overall cost of the loan and the interest paid to hike. So, if you are fine with paying a higher education loan interest rate on your education loan, then and only then should you opt for longer payback tenure.
- Know about all the defaults and extensions
If your reason for not being able to start paying EMIs in a few months after your course finishes is genuine, then banks may understand. You can request an extended moratorium period and justify your reasons with the bank. An extension is still a possibility, and lending institutes are willing to help with the same if the case is genuine. However, defaulting on a student loan has no way out. Not only will you create a bad credit score for yourself, but your parents, who are often listed as co-borrowers, will have to take on the burden of your student loan instead.
- Pay in advance
Ideally, when it comes to student loans, your EMI starts approximately a year after you have finished your course, or six months after you have been employed, whichever is earlier. During this period, your loan providing institutions do not expect you to be paying back, but interest on the total loan amount will keep accumulating. So, if you have provision to pay back during this period, you should prioritise and save whatever interest you can. At the end of the day, you should have a clear plan in mind while making sure that there is room for adapting. Before you take a student loan in India, make sure that you know the education loan interest rate and always have a payment plan ready for the loan before applying for one. Banks like Axis Bank offer their help and provide affordable and easy-to-apply