All you need to know about an education loan

 

An education loan is a boon to everyone who looks to complete their higher studies in India or abroad. The reason they are so well known and commonly used is that they make paying for higher education easier. The most common way is to take an abroad study loan or a loan to study in India which will help you in affording higher education and would cover all your expenses.

Many students are unaware of the exact details regarding the terms and conditions of the education loan they have taken. This could result in them getting a bad deal and getting stuck repaying the loan for many years with a heavy rate of interest. However, to help you avoid making the same mistake here is all you need to know about an education loan -




What is an education loan?

The core concept of this loan is the assets shared with an applicant by a financial institution, and then the applicant is required to repay the amount taken with a certain rate of interest during the pre-decided period of time.

Of course, there are a lot of other technical factors included in the loan deal given by the financial institution, but the basic idea remains the same. Applicants that look to pursue further studies take an education loan in India or an abroad study loan, which they then start repaying after they complete their course.



How does education loan work?

These loans are given by the financial institutions to the students, which they then repay after their course is completed. The financial institutions earn money on the rate of interest on the loan. The students pay the loan back in installments, known as study loan EMIs.

These loans do not only include the basic admission fee and the university’s semester fees, but also additional expenses which are non-academic like travel expenses, food expenses, etc.



Which institution can provide a better education loan?

The financial institutions that are permitted to give out an educational loan are either Banking Institutions and Non-Banking Financial Institutions (NBFCs). Both the type of financial structures need to be approved by the Indian Banking Association. They mandatorily follow the regulatory norms of providing services that benefit the students.

It has always been common practice to take loans from banks. But lately, people have started choosing NBFCs for availing of education loan to study abroad. You can run a quick search about ‘ student loan France ’ or ’ education loans UK ‘ on the internet and easily get a list of lenders that suit your requirement.

Banks take a lot of time to process the loan, whereas NBFCs have a very minimal processing time and immediately transfer the funds into your account. They are more open when it comes to the eligibility of students in getting loans.

Applicants have a better chance of getting a bigger loan amount from an NBFC as compared to a bank. These features are introduced by NBFCs in order to provide better services to the students.

We hope the article gave you an ample amount of information you need to take an education loan, and wish you the very best for your future!

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