Educational expenses should never discourage you from achieving your academic aspirations. Many students these days opt for education loans to fund their studies, whether in India or abroad. When opting for a student loan, you must understand education loan nuances such as the education loan amount, the education loan repayment options, and the education loan tenure, among others. Let's understand these aspects in detail and also discover some interesting education loan tips.
Key highlights:
- Education Loan and Its Benefits
- What You Must Know About the Education Loan Amount
- Are There Student Loan Limits
- Education Loan Tenure
- Education Loan Repayment
- Education Loan Tips
- Conduct Thorough Research
- Decide Between Secured and Unsecured Student Loan
- Read Your Loan Document
- Keep the Documents Ready
Education Loan and Its Benefits
An education loan is an amount that students can borrow from financial institutions to cover various costs involved in education. It gives them the opportunity to finance their education independently without depending on their parents. You can access quality education without making any compromises.
Education loans are available irrespective of whether you want to study in India or abroad. This will enable you to choose any course or educational institution that allows you to fulfil your career aspirations. One of the key benefits of an education loan is that it saves families from liquidating existing assets or using long-term savings, thus preserving financial stability. Also, timely repayment of an education loan will help you build a strong credit score, which can unlock multiple benefits when you opt for a car loan, home loan or credit card. Education loans thus provide access, flexibility, and a secure financial foundation to pursue higher studies.
What You Must Know About the Education Loan Amount
When applying for an education loan, you need to understand that the student loan amount will depend on the holistic cost of education, not merely on tuition fees. You will be glad to know that your education loan will cover a wide range of costs, including tuition fees, travelling expenses, accommodation costs, study material costs, cost of learning devices, living expenses and other education-related costs.
The amount you are eligible for will depend on a number of factors, which include the course you choose, the university, and the estimated cost of living. To determine the approximate amount, you can make use of the online tools, such as a College Course Expense Calculator, to understand the expenses that might be incurred and thus how much student loan you will need. Using the online calculator will ensure that you borrow the right amount.
Are There Student Loan Limits
Education loan limits can vary widely depending on things like which course you choose, which university you would attend, your preferred financial institution, and how much the overall expenses are expected to be in your study destination. In determining the maximum amount that can be lent to you, lenders will consider the total cost of education, covering your tuition fees, living expenses, travel, and other elements.
Education Loan Tenure
You can use the Education Loan EMI Calculator to try different combinations of loan amount and tenure to find estimated monthly EMIs. You can change the tenure as per your financial requirements and preference. Also, your chosen lender may have a set tenure, so it is best to check out before opting for a student loan.
Education Loan Repayment
Repaying an education loan will become much smoother when you start by borrowing the right amount. Taking only what you need, based on your course fees, living costs, and other essential expenses, will help keep your future EMIs in control and avoid borrowing too much or too little. Proper planning at the time of borrowing will lay the foundation for a stress-free repayment journey.
Another smart move is to pay during the moratorium period, which is the time when repayment is not necessarily obligatory. However, at Avanse Financial Services, we advise making small contributions in the form of simple interest (SI) or partial interest (PI). In that way, you lessen the interest accumulation, hence making your repayment timeline more efficient and affordable once the EMIs start officially. Please remember, the moratorium period is not an interest-free period, and interest will accumulate from day one. Also, paying SI/PI during this grace period will instil financially prudent habits.
Furthermore, your academic performance and future career prospects will make a difference in the ease of loan repayment. Better grades, relevant skills, and opting for the right course that is in demand in the job market will increase your chances of getting better job prospects after completing your studies. This will not only help you manage repayment with confidence but also ensure that your education loan becomes a stepping stone to long-term financial success with enhanced creditworthiness.
Education Loan Tips
Conduct Thorough Research
Before applying, it is worth researching courses and universities, as well as lenders offering education loans, to make fully informed choices. The most common mistake that most students make is selecting an education loan partner based only on interest rates. However, you have to check several aspects before opting for a loan.
You need to have proper knowledge regarding interest rates, repayment options, processing times, and eligibility criteria, so you can pick a loan that closely meets your financial requirements. Proper research will also prevent unexpected hurdles later and ensure your education journey runs smoothly financially.
The more time you spend planning your repayment strategy, the more comfortable you will be with your finances in the long run. Find out the estimated EMIs, costs covered, etc.
Decide Between Secured and Unsecured Student Loan
Secured (with collateral) and unsecured (without collateral) loans are both available. You can choose between the two based on your financial requirements. Assets accepted as collateral for secured education loans are residential property (apartment/house) and a fixed deposit.
Read Your Loan Document
You and your co-borrower need to know what is written in the loan document before signing. This will include interest rates, collateral requirements (for secured student loans), fees involved, terms and conditions and repayment options. Reading the fine print will keep surprises away and ensure both of you are informed about your financial commitments.
Keep the Documents Ready
Finally, ensure that all your important documents, like academic records, proof of identity, etc., are in place before applying. Proper documentation will facilitate the process of loan approval and minimise the chances of delays and rejection.
Some important documents are:
For students:
- 2 colour passport-sized photos
- Photo ID
- Residence proof
- Date of birth proof
- Signature verification
- Academic documents
- Proof of admission
- Fee structure
For co-applicant:
- 2 colour passport-sized photos
- Photo ID
- Residence proof
- Date of birth proof
- Signature verification
- Income proof
- Collateral documents (only for a secured student loan)
- 8-month bank statement
- Relationship proof
So, before applying for a student loan, carry out extensive research to make effective decisions. At Avanse Financial Services, we offer educational loans for studying abroad as well as to study in India. The Avanse student loans cover the holistic cost of education, including tuition fees, travelling expenses, accommodation costs, living expenses, study material costs, cost of learning devices and other education-related expenses. You can benefit from 100% financing, quick loan sanctions and flexible repayment options.
To learn more about the student loan, education loan interest rate, or to better understand your academic journey, please connect with us. We will be glad to assist you.
