Success in life is attaining higher learning from a recognized institution. Many students apply for student loans in India to secure well-paying jobs and have successful careers. Proceeding to a higher institution can be challenging because of the many costs involved.
With the constant rise in education costs, student loans are the new normal to finance higher education today. Many students from top colleges and universities expect high salaries. This makes them be in a position to repay the student loan in the given duration.
To students, it is more costly when you want to study abroad. The extra expenses and tuition fees make it hard for many to meet higher institutional learning. Fortunately, student loans are available to help fund their education. This makes the students achieve their dreams and reach their potentials.
In this article, we'll look at how to apply for student loans in India, eligibility for student loans, terms and conditions, just to mention a few.
What is a student loan?
A student loan is a sum of cash lent to the student from a private or government lender to cater for higher education learning. The loans have a certain period until repayment can begin. Or repayment starts when the beneficiary begins earning an individual income.
Many Indian banks provide students with loans for further studies in India or abroad. Other banks sometimes offer credit cards to their student loan customers.
Read on and find some of the key factors to know when applying for student loans in India.
Eligibility for student loans
Before applying for a student loan in India, you should know the eligibility methods. The eligibility criteria are different from one bank to the other. Each bank has its own set of conditions. To qualify for a student loan, you have to be an Indian citizen. Besides, you should have studied in a recognized school.
Other perks that determine one's eligibility for student loans are, the student be of ages 18 to 35 years, has excellent academic records, the course is eligible for an education loan, etc.
If you have no income during your loan application, you will need a next of kin as your co-applicant. If the next of kin have a low income, the bank will need enough collateral to sanction the loan amount.
The repayment period and interest rate
During your education loan application, you should check all banks offering student loans. This will give you a clear sign of the interest rates charged and the duration for repayment. You should compare the rates and opt for one that suits you.
According to the Reserve Bank of India, amounts equal to or below INR 4 Lakhs has an interest rate of 10% to 15%. The loan also has a repayment duration of 3 years. High loan amounts have lower interest, and at the same time, given more repayment time of between 5 to 7 years.
Many banks ask for guarantors when applying for education loans. For students, the parents or guardians come in place for guarantors. In case a student defaults in loan repayment, the parent or guardian will be the one to repay the loan.
Future Equated Monthly Instalments (EMI) Burden
After graduation, many students don't earn much from their careers. As the students are juniors at the beginning of their careers, the income is usually less. So, one should seek loans with more extended repayment periods. The longer time gives one enough time to pay a smaller amount and reduce the repayment burden.
Check for standing loans.
If you or your parents have standing loans, you should know of it. This is important to note before you can overburden your guardians with more loans. Or you will have more financial burden. If the outstanding loan is immense, then difficulties processing a student loan will arise. For a smaller loan, you have not to worry.
If the existing loan is enormous, it is better to evade another looming big loan. Because of this, you should seek for better job openings after graduation to repay off your loan.
Other banks, such as government-owned banks, have special schemes for lady students seeking higher education loans in India. Other banks also provide an offer of 1% lower interests from the standard rates to girl students.
Other times, the government provides a subsidy to the interests charged on the girls' loan amount during their high education learning. Thus, it is wise of you to check from your bank for any special schemes on higher education loans.
Understand the terms and conditions right
Every bank has different terms and conditions sanctioning their loans. Much vital information is usually not mentioned in terms and conditions during your application. Because of this, you should read and understand each clause and know all the possible charges. Some of these charges include processing fees, late payment charges of EMIs, pre-payment charges, etc.
A student loan for higher learning is a good dept. The loan is an investment that will repay off once a student begins a career. Also, early repayment will improve your credit score. Thus, you don't have to let that opportunity to study slip by. Apply for student loans in India and secure your future growth.