According to a reliable source, the ticket size of educational loans in India has increased 47 percent in the last fiscal year, while the number of students seeking loans has reduced by 7 percent to 2.5 lakh. This data tells us that while the total amount of student loans has risen, the number of students seeking it has reduced. If you are wondering should you take an education loan for higher studies then we suggest you remember the following pros and cons.
Pros of Student Loans
- Student loans are a good idea for students who are not financially strong to seek higher education. When you seek higher education that makes you employable, it can increase the quality of life or your living standards.
- When you take a student loan, you can apply to any college or university without worrying too much about how costly the course would be.
- Student loans can be used for many other things besides the tuition fee. Be sure to ask the lender how you can spend it because they might have their eye on you.
- Paying off student loan helps people to build credit, and if you pay it off on time, your credit score might go up.
- Student loan allows parents to not worry too much about paying for a kids’ education as a student can do that himself or herself when he or she starts earning.
Cons of Student Loans
- There is no doubt about the fact that student loans can be quite expensive. So, you need to research before taking one. Some lenders in India promote women education by offering student loans to women at lower interest rates. So, you’d be smart to seek such loans if you are a woman.
- Student loans mean that you start your career with a debt. You have to pay them off as soon as you start earning, which may be a setback to your other life goals like buying a home or a car.
- The time taken to pay off a student loan can be quite long, and if you default, it can lower your credit score.
In case you don’t want to opt for a student loan, you should know that other options might help. Some of them are:
- Government Grants: If you are eligible, you can apply for schemes or grants offered by central and state governments in India. They allow you to pay a lesser fee or waive the fee entirely.
- Scholarship: Most colleges and universities offer partial or full scholarships to students who get on the merit list. So, study hard and ensure that you are on one of these lists.
- Earn While You Learn: Many colleges and universities are flexible about whether a student is doing a job along with studies. You can avoid student loans and pay for your education as you go by taking up a part-time job or working as a freelancer.
If you do thorough research and apply for a loan that fits your needs, you will not regret opting for it!