While foreign universities can provide high-quality higher education, they also come with costly tuition fees and living expenses. Fortunately, students can easily obtain educational loans to study abroad through several banks and non-banking financial companies, or NBFCs, which makes it easy for them to afford overseas education.
What Is an Education Loan?
Education loans are a popular financial resource that is specifically designed to help students fund their higher education. These loans may cover a wide variety of expenses, including tuition fees, living costs, travel expenses, and other related expenditures. By applying for an educational loan in India, students can transcend their financial limitations and pursue their dream of pursuing higher studies abroad with ease. Education loans typically come with flexible repayment options and competitive interest rates. This enables students to manage their finances in a more efficient manner, and alleviates the burden of financial concerns.
Benefits Of Education Loans
Education loans help thousands of students to achieve their academic ambitions unencumbered by monetary constraints. There are many benefits associated with these loans:
- Accessibility to Education: Education loans make overseas education accessible to a broader range of students. Today, both secured and unsecured education loans are available. Unsecured education loans allow students who may not have adequate assets to pledge as collateral to enrol in desired courses and institutions.
- Moratorium Period: The majority of education loans come with a moratorium period. This is a grace period during which the borrowers will not have to make payments toward the loan principal or interest. The grace period usually spans the duration of the relevant course, and may even extend a few months after graduation. The moratorium period makes sure that students can wholly focus on their studies over the duration of the course, and get time to secure employment before beginning loan repayments.
- Building a Positive Credit History: Availing an education loan and paying its EMIs on time would help individuals establish a positive credit history. A positive credit history can prove to be quite advantageous when applying for other loans or a credit card down the line. Lenders tend to check the credit history and score of prospective borrowers to evaluate their creditworthiness.
- Enhance Financial Responsibility: Education loans provide students with the chance to attend world-class institutions without draining the savings of their families. It also helps young borrowers develop better financial habits, as they have to follow a well-planned financial strategy to make EMI payments.
Factors to Consider Before Choosing an Education Loan
Many lenders across the country offer education loans. To select the right option, borrowers need to take the following factors into account.
- Interest Rates: Compare education loan interest rates across diverse financial institutions to find the most affordable one.
- Repayment Flexibility: Check the repayment terms of multiple lenders, and select the most feasible one.
- Loan Coverage: Confirm that loan payments include tuition fees as well as a part of living, travel and other expenses.
- Processing Time: Find lenders who process loan applications swiftly.
Paying heed to the factors outlined above would help borrowers to zero in on the perfect education loan.
