Quality education is essential to building a successful and lucrative career. However, the rising cost of education can become a roadblock. Also, many students these days believe in financing their education independently without depending on their parents. Hence, they choose education loans to achieve their academic aspirations.

Benefits of education loans for students

• You can easily fulfil your academic aspirations by pursuing a variety of courses from your dream university in India or abroad.
• You can repay the loan in the form of simple interest & partial interest during the moratorium period and after getting a job through easy EMIs.
• Some financial institutions offer student loans that cover most of the education-related expenses.

You can easily reap the aforementioned benefits if you consider these important tips before applying for a student loan.

Estimate the total cost of education: The total cost of education is not limited to tuition or hostel fees; it also includes other education-related expenses such as the cost of purchasing new books, equipment, travelling expenses, library fee and more. Therefore, it is crucial to estimate the holistic cost of education before applying for a study loan.

Decide loan amount: Applying for an education loan for an amount exceeding your requirements will unnecessarily increase your overall cost of education. Moreover, do not sideline the basic fact that the loan amount will directly affect your EMI amount. Hence, apply for a feasible amount i.e. borrow what you need so that you repay it easily. You can use an Education Loan Eligibility Calculator to understand the maximum loan amount you can apply for.

Calculate EMI with Educational Loan EMI Calculator: If you are financing your higher education through the loan, then it is necessary to verify facts like placement history and average pay offered after completion of the course. The reason is these pieces of information would help in estimating the expected monthly income and help you to plan your EMI and loan tenure accordingly. You can take the help of an Educational Loan EMI Calculator to estimate the EMI for a particular loan amount you wish to obtain from Avanse Financial Services.

Decide loan tenure: Different financial institutions offer study loans in India for different periods. An undeniable fact is higher the loan tenure, the lesser would be the EMI amount and vica-versa. Taking an education loan with longer tenures allows you to pay easy EMIs at the start of your career. The longer repayment period with smaller EMIs will help you to manage other expenses efficiently. However, you must choose between longer and shorter tenure as per your requirement. After all, an education loan is a financial obligation that you should repay responsibly to build a healthy credit score.

Choosing your financial institution: Many financial institutions offer student loans for pursuing higher studies both in India and abroad. However, do not finalise the financial institution solely based on lower education loan rate of interest. Compare other factors also, like repayment terms, processing fees, benefits offered, customer services, educational expenses covered by the study loan, etc., before taking your final decision.

Choose a course with better job prospects: You should choose those courses that come with excellent job prospects in multiple industries, especially if you are interested in applying for education loans for students. Professional courses with great job opportunities allow you to start earning early and help you to repay the loan as soon as possible.

Repayment strategy: Financial institutions do offer a moratorium period in which borrowers don’t have to pay their EMIs. However, the interest starts accruing right after the loan disbursal. Believe it; you cannot afford to make any defaults in education loan EMI as it may affect your career, academic and financial goals. So, plan the repayment strategy well in advance so that you can repay the loan responsibly. 

At Avanse Financial Services, we encourage our students to pay the interest in the form of simple or partial interest during the moratorium period to repay the student loan effectively. Feel free to connect with us to obtain customised education loans, and to know about the education loan rate of interest and the eligibility criteria.