Looking For An Education Loan? Things You Must Check Before Applying – News18

Every parent’s dream is to provide the best for their children’s education, so they start saving early but as the cost of education is increasing day by day it is difficult to keep up with the rising tuition fees. But there is always an option to choose an education loan. As most students choose to go for higher education in private colleges, it is not just the tuition fees but other expenses to be also kept in mind.

Both public and private sector banks offer loans to students who want to pursue a career in engineering, law, medicine, computer science, design or any other field. Though before applying for a loan it is important to keep certain things in mind so that you take the right decision.

Analysing the course and institution

Before taking a loan, it is important to analyse the course and institution. You should do proper research regarding the placements provided by the institution/university. Students might also connect with alumni to gather information. You should take into account the total expenditure including hostel/living costs, books, laptops, etc., It is better to apply for a loan after a proper analysis of your kid’s expenditures.

Interest rates

It is a better option to compare the rate of interest different banks are providing and also the time of repayment allotted. For instance, a loan of Rs 4 lakh or less comes with an interest rate of 10-15% that is payable within 3 years. On the other hand, higher amounts are given at lower interest rates but with more EMI periods. Education loans also depend on the factors like course, institution, applicant’s past academic performance, and others. So, it is always better to do proper research on the interest rates the banks are providing.

Repayment

Research the institution’s placement and have an idea about the approximate salary you might receive. This will help you to create a future estimation of your salary. Once you start earning it is important to strategise a budget so that you can pay the loan smoothly keeping aside other expenses. It is important to cut expenses on unnecessary things. Usually, loans become burdensome after some time, so it is better to be prepared before you start feeling pressurised.

An education loan might be a big step in building a good credit score as this will be the first student loan. If you repay the loan on time, it will be easier for you to apply for other loans as well in the future.