3 lesser known points about education loans in India

1. 3 lesser known points about education loans in India. The increasing demand of education loans in India can be attributed to rising course fees in the country. Take for example the cost of management courses, which has been rising at an average of 20% every year, or the cost of studying at an IIM which stand at around 19.5 lakh for a two-year course – a 400% rise since 2008. With prices like these, students are forced into a corner and education loan offer an easy way out. They provide 100% financing and also offer to cover the peripheral costs of your studies. This ensures you never fall short of financing and can concentrate fully on your education. However, before you visit a lender, fill-up the application form and sign along the dotted line, keep these 3 lesser known factors of a student loan in mind. 1. Lenders don’t see students as equal. Just because a friend got a certain amount of funding doesn’t meanyou’ll get the same extent of financing. And though most lenders will advertise 100% financing, whether or not you actually get that amount depends on a number of factors. Because, the extent of financing you are provided is based on the risk you present to a lender. They evaluate your risk level based on your financial backing, your academic record, your guarantor’s monthly income, expenses, his/her credit score and a number of other factors. If your risk of defaulting on the loan is low, the level of financing you receive is higher. You can check roughly how much financing a lender will provide you by using an eligibility calculator. Just find it over the internet, feed it with the required details and within seconds you’ll have a figure that lenders will provide you. 2. Applying for education loans in India will cost you. Applying for an education loan is a costly affair. When you fill the form and submit your documents, you have to pay what’s known as a processing fee. This amount is usually a percentage of, generally between 1 & 2 percent, the loan amount. The real eye opener is that this fee is non-refundable even if your lenders decided to reject your application. 3. Moratorium will cost you too! Moratorium periods are probably the biggest advantage of education loans in India. They allow you to forget about repayments until you’ve finished your studies or landed a job, whichever is earlier. Most students apply for the loan because of this feature. However, you should know that every year you go without making repayments, your lender will add simple interest to your principal amount.

2. You could avoid this by opting to service the interest amount. Upon doing so, your lender might even provide you a lower rate. This can help you save money and ensure your loan burden isn’t increased. We hope these 3 points will give you a better picture of education loans in India. If you have a doubt regarding anything in this write-up, simply pic-up your phone and dial one of the leading education loan providers, they will be more than happy to clear your doubts for free. Good luck and all the best with your studies.