It is normal for a novice to be perplexed regarding technical terms, procedures, eligibility criteria, required documents, and so on. As a result, as part of our blog series, we’ve been providing you with helpful information about education loans. We provide additional useful information in this series that will clarify education loans. So, let’s quickly dive into it.
Getting an education loan versus spending your savings Effective learning becomes feasible because parents extend full support. They take care of every need of the child, including financial needs. Your parents have done everything so that you can get a quality education. Higher education is expensive whether you choose to study abroad or in India. Most parents choose to liquidate savings that they have been saving for the rainy day to ensure their children pursue higher studies.
Instead of having your parents spend all of their savings, what if we told you that you could pay for your own education? You can opt for an education loan for higher studies and choose to fund your own education. Your parents need not liquidate savings or investments or pledge gold or even have to borrow from friends and family. A student loan is an incredible way to earn a self-made badge!
Education loan covers all the education-related costs like tuition fees, equipment costs, airfare for study abroad students, and so on. This alleviates stress throughout the academic journey, not only for you but also for your parents. so that you can concentrate on your studies while your parents preserve their investments and savings for the foreseeable future. Millennial outlook: know what your peers think
Most millennials choose to finance their own education instead of depending on their parents. Being self-reliant is one of the important goals of every student’s life. Also, once you complete your studies, you will need a strong credit history to buy a car loan, home loan, or credit card. With an education loan, you can start building a good credit score early on. Now, let’s take a look at what mistakes you must avoid
1. Little to no research
Researching on interest rates is undoubtedly important. However, most students make a big mistake by shortlisting the education loan provider based on just one criterion i.e. interest rate. You also need to consider other important factors like the sanction time required, if the education loan meets your requirements and so on. So, conduct online research to find out if the provider is credible. Additionally, you must take into account a number of other academic costs in addition to tuition. Find out if your lender covers all the education-related expenses like equipment fees, airfare for studying abroad, and so on. Know these aspects well about the providers you have shortlisted to make a well-informed decision before applying for an education loan.
2. Borrowing more than needed
Even though EMIs start after you finish school, interest on an education loan starts right away. By borrowing more than needed, you unnecessarily increase your debt, for which you will eventually have to pay interest. You may consider using Education Loan EMI Calculator, or College Course Expense Calculator to arrive at the approximate amount you need to borrow. These online tools are excellent ways to try different permutations and combinations of factors like EMIs, interest, loan amount, etc., to find the right fit.
Before arriving at the loan amount, consider expenses like:
Tuition fees
Living expenses
Accommodation cost
Travel expenses
Cost of equipment
3. not reading or comprehending the loan agreement’s fine print
The majority of reputable providers won’t hide any costs; rather, they will be very open about the whole process. However, it is advisable to read the fine print to ensure no expenses or fees other than the ones conveyed to you are mentioned in the document. Also, it is best to read the terms and conditions to avoid any complications in the future.
Imagine this: you find out that a certain education-related expense is not covered by your student loan after you have already taken one out. Yes, stressful. Therefore, it is best to determine whether your education loan covers all significant education-related costs to avoid this scenario.
4. Interest rates are important but not just the only crucial factor
Selecting an education loan provider based on interest rates can bring in a lot of regrets. Don’t fall for a provider that only promises but never delivers. Be wary of phony loan providers, particularly phony loan applications. Read reviews about the education loan provider and also about the time they take to sanction the loan. Make sure to inquire about these aspects if you have a particular need, such as only wanting a loan without collateral. Before applying for an education loan, you should do thorough research on every aspect because higher education in India is just as expensive as higher education abroad, regardless of where you choose to study.
How to apply for an education loan?
There are a number of choices available to you. You can fill out an application online at Avanse. You can get in touch with us at 1800-266-9722 or send us an email at [email protected], and we’ll help you through the application process. Therefore, prior to submitting an application for an education loan, each student must be aware of these essential details. If you want to read blog series
1, please click here; for blog series
2, please click here.
We, at Avanse, offer holistic financial solutions which cover all the education-related costs. Please share any questions or doubts you may have with us. We will be happy to assist you.
