Due to rising education costs, many students apply for a student loan to finance their higher education. It is possible to get such loans for studying abroad and within India. Student loans are offered by many banks and non-banking financial companies (NBFCs) across the country. These loans provide borrowers the financial support they need to pursue their academic goals without having to worry about upfront costs.
Types of Student Loans in India
Mentioned below are the two types of study loans in India that one can apply for:
- Secured Loans: They require collateral such as fixed deposits, property, or life insurance policies. Due to the reduced risk to the lender, secured loans often come with lower interest rates, higher loan amounts, and longer repayment tenures.
- Unsecured Loans: These loans do not require collateral and are approved based on the academic record of the borrower, the reputation of the institution, and the co-applicant’s financial stability.
Loan Features to Consider Before Applying
Before committing to a loan, borrowers need to consider the following features:
- Interest Rate: The education loan interest rate would determine how much the borrower must pay over the course of the loan.
- Repayment Flexibility: Many lenders offer flexible repayment options, including the benefit of repayment after course completion or once the borrower starts earning.
- Course and Eligibility of the Institution: Borrowers must ensure the course and institute they are applying for are eligible for loan coverage, based on the criteria of their chosen lender.
Use of Education Loan EMI Calculator
Applying for an education loan can be a good idea for many students without appropriate financial planning, they may end up with unforeseen financial difficulties. It would be smart to use an EMI calculator to make this process easier. An education loan EMI calculator is a financial tool that helps borrowers accurately identify the EMI they must pay, so they can make informed financial decisions. It allows borrowers to determine their monthly repayments based on the loan amount, tenure, and interest rate.
Reasons to Use an Education Loan EMI Calculator
Clarity on Monthly Financial Commitment
A good understanding of the monthly financial obligations is necessary before applying for an education loan. An EMI calculator provides a precise estimate of the monthly repayment, making it easier for borrowers to plan their spending. As borrowers know the exact EMI, they would be in a better position to plan their expenses beforehand and stay stress-free during the repayment phase.
Help Choose a Suitable Repayment Tenure
The loan repayment tenure has a direct impact on the EMI. A shorter repayment tenure would result in higher EMIs but lower interest expenses overall. On the other hand, a longer tenure would result in budget-friendly EMIs but may cause the borrower to incur higher expenses as interest payments. EMI calculators enable borrowers to adjust the tenure options and assess their repayment capacity to identify the right tenure.
One can find an education loan EMI calculator on the website of a trusted financial institution offering such loans. It would help you make the best financial decision for fulfilling your educational dream.
