4 tips to keep in mind before taking an education loan

Pursuing your studies further after schooling is one of the best decisions you can take as you not only get more knowledgeable but also get the opportunity to bag high-paying jobs. The endeavor of pursuing higher education can be quite expensive for many. Thus, financing this dream can be a bit of a challenge.

However, to help students achieve their dreams, many NBFCs, banks and other such financial institutions offer education loans. Since taking an education loan can prove to be so pivotal in the lives of many students, it is very important to choose the right loan plan for you. To help you with the same, here are 4 tips to keep in mind before taking an education loan - 

 

1)      Choose the right course for you

Long gone are the days when selecting the right course for you was easy as you had very limited options to choose from. With the maturation of the education industry over the years, the number of courses offered has increased significantly in recent times. Thus, it is very important to choose the course that not only interests you but is also capable of helping you land a well-paying job.

 

2)      Choose the right country to study your course in

There are many people who believe that pursuing any course in any country is going to be beneficial for their professional life as it is out of their native region. However, this is not true at all and the country you choose to study in depends largely on the course you wish to opt for and the living expense that you will have to bear during your stay for the same.

 

3)      Understand the repayment plan thoroughly

Students often find themselves in a tight situation of defaulting on their student loan EMIs and damaging their credit score due to the same as they do not fully understand the terms and conditions of their education loan repayment. To avoid this, understand the terms and conditions of your loan repayment thoroughly before undertaking the same. Understanding the moratorium period and the interest rate charged is one of the best ways to analyze and formulate a successful loan repayment strategy.

 

4)       Research about the collateral required

Banks usually ask for collateral in exchange for providing an education loan. However, many NBFCs do not pose such a requirement before approving your application for the loan. By providing collateral you are able to get a higher loan amount. Hence, it is recommended to understand the collateral requirements of the lender you wish to borrow from. If you do not wish to provide collateral for your loan, you not only get a lower loan amount but also need to have apply for your loan with a co-applicant. The said co-applicant can either be your parent, guardian, etc., anybody who can take responsibility in case you default the monthly EMI payment.

 

We hope this article proves useful the next time you set out to get an education loan for your higher studies in India or abroad.