With education cost rising every year, education loans have almost become inevitable. As most of the students studying in top educational institutions expect to earn high salaries at the end of their studies, they are likely to be in a position to repay the education loans over a period of time.
When hoping to select an education loan, the first step should always be to check your eligibility. The eligibility varies from lender to lender, so you need to check it with every lender in your vicinity. The eligibility factors also vary. While some lenders can reject you if you don’t have a co-applicant, others can reject you if the income of the guardians is not sufficient.
- Interest Rate
The interest rates also vary from lender to lender. You need to make time to know about the interest rates offered by different lenders and go for the best possible option.
- Repayment Period
This also plays a key role when it comes to seeking an education loan. You should be allowed to stretch the loan over some time suitable to you or pay it off early if you get a well-paying job (which is easy as most banks have let go the pre-payment penalties). The repayment depends on the amount you seek. For instance, loans of more than INR 4 lakh can usually have a repayment period between 3-7 years.
Most students don’t pay off the education loan in one go. They opt for easy EMI’s. So, you should look at what kind of EMI a lender can offer and select one that suits the most.
- The Capability of a Guardian
In most cases, if the student is a minor or has no source of income, his or her parent(s) or guardian(s) are asked to sign as a guarantor or a co-borrower. So, before you take a loan, talk to them, and ensure that they don’t have another loan to pay off. If they do, they might not be able tobe your guarantor or a co-borrower.
- Read all the Terms and Conditions
It may sound boring, but you need to read all the terms and conditions before you apply for a loan to avoid getting an application rejected. It is also vital to avoid nasty shocks later on, like an interest rate that keeps on increasing with time.
When you act smartly and remember these things to keep in mind before you take an education loan, you will not regret your decision and get a loan that suits your paying capabilities while ensuring that you complete your studies without worrying about finances.