Every student hopes to be accepted into the universities of their dreams or to pursue higher education overseas. A good higher education can aid in establishing the basis for a reliable career and greater salary. Perhaps you are set to enter the institution of your dreams, but the thought of having to pay a big price for education may put you off. As a result, obtaining student loans from banks and NBFCs has replaced other funding options for higher education. Student loans can be a terrific option for financing your professional development, but the possibility of not finding a well-paying job and the potential for years of debt have increased the need of thoroughly weighing the benefits and cons of each loan type before making a choice. Before requesting a student loan, you should think about the following:
1. Check the Course and University Carefully
You shouldn’t just take out a loan to travel overseas. Pick a subject that interests you and make it your career. Borrowing money for studying could be a waste if the course and university are unclear. Many students make choices that they subsequently regret because they are unsure about them. Additionally, it becomes challenging to repay the debt. As a result, you should consider your career alternatives and see if you can find employment to help you pay back the debt after your school is over.
2. Loan Amount and Policies
Always keep an eye on the loan amount you are taking and the rules that go along with it. For various principal amounts borrowed from the banks, various policies apply. For instance, students must be aware that student loans up to INR 4 lakhs are issued without collateral and that a co-applicant is required for loans between INR 4 lakhs and 7.5 lakhs. Additionally, after providing collateral, the regulations and interest rate may be imposed for loans worth more than INR 7.5 lakhs.
3. Interest Rates and Moratorium
The most typical interest rate is from 9 to 15%. The payback amounts could rise over time because most of this is compound interest. An EMI break or a waiting period before the first payment on a student loan is referred to as a monetorium period for education. Repayment of student loans might begin six months or a year after the course is over.
The next crucial point to remember is that a student must be an Indian citizen or resident in order to borrow money from a bank or other financial institution. In order to qualify for the loan, the student must also be older than 18 years. They must also have a strong record of academic achievement and university acceptance as additional requirements. The student receives the loan rather than the student’s parents or other family members. However, the student will be responsible for paying it back in the future.
One may apply for a variety of government subsidies (if eligible). This may significantly lower the interest rate on your loan repayment. While there are many possibilities for student loans, one must be certain that they will be able to repay the loan once they graduate easily and with the applicable interest.
Source: Economic Times