As you plan to set out abroad for higher education, seeking the most suitable financial assistance is essential. Understanding education loans may seem daunting at first—but fret not—we are here to guide you.
When planning for higher education, the first thing most students think about is how their course will be funded. However, an increasing number of students around the world are applying for education loans to pursue courses abroad at their favoured universities or colleges.
Despite countless options, finding a suitable and reliable education loan is not an easy task—as different lenders offer varying loan terms and schemes. If you need help finding a good lender or education loan, we can help you. Here are some essential factors that you should consider while choosing an education loan to fund your higher education.
The period before loan repayment and after graduation is known as the moratorium period—it typically ranges between 6 to 12 months. This time duration grants the applicant some time to find a job or a source of income before they begin repaying the loan.
If you want to choose the best education loan for yourself—take the moratorium period provided by different lenders or financial institutions into consideration—and opt for the one that favours your long-term monetary goals.
In India, when searching for an education loan to study abroad—chances are—a loan margin will need to be paid. Loan margin can be defined as a certain percentage of the total fees that the student needs to pay on their own.
For instance, a 20 per cent margin implies that the student will have to arrange 20 percent of the aggregate fees, while the education loan will cover the remaining 80 per cent. It is vital to consider the loan margin before opting for a loan. If the loan margin is high, you should have adequate savings to pay for the required upfront amount.
When choosing an education loan, find the interest rates provided by different financial institutions, and compare them. You should ideally opt for the scheme which has the lowest interest rates among all. This way, you can minimise the interest burden, reduce the total amount that needs to be repaid and pick the best financial aid to fund your education.
If a guardian or parent is allowed to volunteer as a co-applicant, it may be better for you. This provision will not only improve your chances of receiving a bigger loan amount but can also avail lower rates of interest and a longer repayment time.
You should first inquire how the lender will pay you the loan amount because it is vital information. Some financial institutions send the money directly to the college, while others transfer it to your account. Knowing about loan disbursement in advance can help avoid surprises.
Many colleges collaborate with reputed financial institutions to provide financial assistance to students through education loans. Such collaborations can help speed up the loan process and offer better terms.
If you are applying for a loan to study abroad, the currency exchange rates and their fluctuations can influence the total loan amount and also the repayment instalments.
Evaluate the average salaries and placement records of your target university or college. Ideally, you should plan your loan tenure and EMI roughly based on your estimated future income to avoid facing repayment issues.
You may want to fund your education with your savings, but the rising education costs may not permit it. Therefore, most people seek monetary aid from financial institutions. But you should consider all the aforementioned factors before choosing an education loan.
