Things To Take Care Of While Taking An Education Loan

Education has become a distant and expensive dream for many. Be it a graduate degree or masters, course fees have reached skyrocketing heights along the years. In this situation the best course of action would be, to look for financial assistance or Loans. Education loans involve complex processes and come with heavy risks, which calls for a lot of advance research and consideration.

1.    The Course Fee:

Loans require a strong collateral as a backing for you to be eligible for it. The loan amount depends on the valuation of the collateral you submit as the requirement. More often than not, the course fee is so high that a single loan is not able to cover it. Therefore, it is important to note that the property that is submitted for collateral is valued higher than the applied loan amount. This way you will be able to avoid any discrepancies in getting the appropriate loan amount for your course.

2.    Interest Rates:

A highly transient factor, interest rates keep changing as per Government regulations and RBI money flow mandates. So selecting a bank that provides you the least interest rate for borrowing would be most ideal. The interest rate makes a huge impact on your monthly repayment amount- the higher the interest rate, the higher will be the repayment amount. When repayment starts, the bank first collects the interest followed by the principal amount, so if the interest is high you end up repaying a lot of money for the interest alone.

3.    Campus Placements:

The repayment process can seem like a huge burden if you take a loan without clear job prospects in mind. With the downfall of the job market, searching for job opportunities without an institution backing you can be a difficult task. In such a precarious situation, it is better to ensure whether your university/college provides campus recruitment or placements. Job security must be of high priority well in advance of your loan repayment period.

4.    Loan Process:

Most Banks charge a loan processing fee. The fee amount is another aspect to look into. The processing time is also important as some Government affiliated banks take a long time to process and accept the loan request. If you are in a time crunch the best option would be to go for private banks. However, private banks charge a high processing fee and down payment amount as compared to Government banks. 

5.    Bank Service qualities:

One important factor to consider when applying for a loan with different banks is the Bank itself. If going for a private bank, check into the credibility of the bank, the services they offer, and how easy or difficult the loan process is. Most banks are verified institutions but to avoid risks, a thorough research into the bank backgrounds and the different banks is a necessary task.

With such an important step in education is on the line, every little detail must be taken into account. Taking an education loan is a big responsibility and these points above must definitely be kept in mind before taking such a big responsibility.  So if you or someone you know is looking to take an Education Loan, research, think and finally venture into it.