5 questions to ask lenders before getting an education loan

 

Higher education is the key to a successful professional career. It teaches students the skills of their specialisations and helps them contribute to the smooth functioning of the society as practising professionals. Gaining higher education is expensive and many students do not have the money to pay the required fees. To help such students, education loans exist. But choosing a lender that will provide you the right kind of loan with the right conditions put on it is difficult. In this article, we will let you know some questions you should ask lenders before getting your education loan. 

 

  1. Will you provide unsecured loans?

Many students do not have the funds to pay their higher education fee. More so, there are students who have family assets that can fund their higher education but they choose to save those for their future needs. An unsecured education loan helps both these categories of students. Ask your lender if they can give you an unsecured education loan or collateral-free education loan. That way you save your assets from being used up for your higher studies.

 

  1. What expenses will you cover?

Many students live in areas that do not have the right educational institutes to study their choice of courses. They have to travel to cities for higher education, stay in those cities for the total duration of their courses. This needs money. Apart from that, they have to manage other expenses like the exam fee, the library fee, the stationery expenses, laptop expenses and so on. Many education loans cover all of these expenses. Ask your lender if they will cover all of these education-related expenses, if need arises.

 

  1. How suitable the moratorium period will be?

Financial lenders do not expect the student to start repaying the study loan as soon as he or she earns the degree or diploma. They give a grace period called moratorium period to their student borrowers. Students can use this period to land a job and save money to pay the first few EMIs of their education loans. In short, they can prepare themselves for the repayment. Ask your lender how long the moratorium period they provide will be.

 

  1. How long is the repayment tenure?

Students can speculate or calculate beforehand how long they will take to clear off their loan gradually by paying EMIs. It is called the repayment tenure. The longer the repayment tenure, the more the student pays overtime as the interest over the loan. Consult your lender and decide the best suitable course for your education loan repayment. Ask the lender to keep the repayment tenure such that it is suitable to your earning ability.

 

  1. What is the EMI value?

Students are not expected to repay their education loans as lump sums. They pay a little amount every month called the EMI. Lenders construct the EMI value according to the earning capability of student borrowers. If the students earn a huge amount of money then they can ask the lender to set higher EMIs thus, clearing off the loan fast. Ask your lender to set the EMI value to your earning capacity.

 

So, these are 5 questions you should ask the lender before taking an education loan from them. We hope that after reading this article, you know more about education loans and how to get the best deal while getting one for yourself. All the best!

 

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