Pursuing higher education at a reputed institution shall be an investment in one’s future. However, this investment often comes at high costs, especially if one plans to pursue higher education abroad. The cost of tuition, accommodation, textbooks, and other expenses quickly add up. Although personal savings, grants, and scholarships can certainly help cover some of these expenses, there is a chance that one may have to apply for an education loan to study abroad.
What are Education Loans?
Several banks and non-banking financial companies (NBFCs) offer education loans across India. They provide funds to pay for educational expenses, including college tuition, housing, and other associated costs. Many education loans cover travel expenses or passage money up to a specific amount, for students travelling abroad for higher studies.
Repayment of education loans does not start until after the completion of the course. This gives borrowers sufficient time to find employment before they have to start paying their EMIs. Borrowers must research their options and use an education loan EMI calculator to identify the ideal loan scheme that aligns with their needs. For overseas loans, fluctuations in currency rates may impact the loan amount and repayment instalments.
Key Steps to Follow for Taking an Education Loan
Choose a Reliable Lender
Selecting the right lender is extremely important when seeking any loan. One must shortlist the most reputed providers of education loans in India and compare their interest rates, repayment terms and other features, to make the right choice.
Focus on the Moratorium Period
The moratorium period is the time between the disbursal of the loan amount and when the borrower has to make the first EMI payment. It is the period where the borrower does not have to make any payments towards the education loan. Popular lenders generally provide a moratorium period of up to six months from the completion of the education course or up to three months since securing employment.
Pay Attention to the Interest Rate
Borrowers must compare the interest rates offered by multiple lenders. It is best to identify the most budget-friendly option. Lower rates shall reduce the EMI and the overall interest burden.
Do Not Overlook the Eligibility Criteria
When choosing a lender, one must know the eligibility for an education loan. Multiple factors, like the borrower’s nationality, types of course, and collateral, play a pivotal role in determining eligibility.
Keep Necessary Documents Ready
Once the borrower has chosen the lender, the next step would be to get all the necessary documents in place. The documentation must include a completed application form, proof of identity and residence, breakdown of education costs, admission confirmation, and co-borrower’s income proof.
Submit the Application on Time
After assembling the needed documentation, one has to submit it alongside the education loan application. Whether the process is in person or online, this step initiates the formal process of seeking financial assistance for higher education abroad.
Most lenders in India maintain a simple, straightforward, and swift process for education loan approval. After receiving the application and all the documents, they take about a week or so to disburse an education loan.
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