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The education loan interest rates for the loans provided by banks and NBFCs (non-banking financial companies) are much lower than the interest rates given by traditional financiers.<br><br>https://www.incred.com/education-loan.html<br>
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A few factors that influence education loan interest rates in India
The inflation rate in India is higher than ever and is projected to increase even further. Thus, there are many Indian citizens who are unable to meet, even the basic costs of living. Therefore, there are many meritorious students in India who are unable to opt for higher education courses due to lack of monetary funding parents often gamble on their future by giving up their entire life’s fortunes in order to endorse their child’s education.
Even after compromising on their future, they are still left on the shorter end of the stick; lack of funds. However, now there are education loans given out by banks and NBFCs (non-banking financial companies) in order to help students pursue a course of their choice. The education loan interest rates for the loans provided by banks and NBFCs (non-banking financial companies) are much lower than the interest rates given by traditional financiers.
The study loans take care of all the expenses incurred by students while pursuing an educational course of their choice. The costs of educational fees, study material, travel expenses, residential, as well as any other miscellaneous expenses are all covered under the education loans. There are a number of courses provided under the study loans such as MBA (Masters of business administration), Arts, medicine, engineering, mass media, etc.
thus, students can choose a subject of their choice and pursue their education. The banks and NBFCs (non-banking financial companies) are now offering education loan online, therefore, students can compare and choose the loans with the lowest education loan interest rates.
The factors that influence study loan interest rates in India are as follows: • Merit: Your academic background plays a major role in determining the interest rate that you will be paying up to the bank or NBFC (non-banking financial company); through which you have applied for an education loan. Thus, if you are a meritorious student with a great academic background then you are eligible for a discount on education loan interest rates.
Course: The course that you have chosen will also play an important factor in deciding the interest rate that you will be paying. If you have opted for a course with a prestigious foreign university or institute, then you will be granted lower interest rates. The reason why financial institutes review your course is that they want to ensure that you will be able to repay the education loan amount without any hassles.
Marginal money: The banks and NBFCs (non-banking financial companies) don’t fund your entire education fees. Most of the times, they fund up to 80% to 90% of the entire educational fees. Thus, marginal money is the amount of money that you have to pay from your own funds. Although, in-case of exceptionally meritorious students, they might pay up the entire capital amount. Thus, you can reduce the education loan interest rates by increasing the marginal money that you pay to the bank.
Co-borrowers creditworthiness: The creditworthiness of the co-borrower will play a deciding role in determining the interest rate that you will be charged with. Thus, if the co-borrower has a good source of income and a great credit score; more than 750, then you will be charged with lower interest rates.
Moratorium period: This period is generally considered a holiday period when you don’t have to make any repayments to the banks. This period is generally around 6 months to a year and is provided by the banks to the students, in order to find a job. Thus, even if you cannot make the repayments on the principal amount during this period, however, you can decrease the interest rates; by repaying them instead.
