Now that the school and college sessions are over, it is the time when students must be looking for different courses in colleges, perhaps from well reputed universities across the globe for further studies.
While you must have qualifying percentage or even cracked the entrance exam but not everyone of us has enough savings to pay for the high fees in colleges for pursuing course of our choice. Banks though, in our country have made paying education fees quite easy by providing loans, but there are few things that you must consider before taking Education Loan. Read on this post to find out 8 important things which you should keep in mind while applying for education loan in a bank in India.
Education loans prove to be a boon for those students who get qualifying numbers as well as qualify the entrance exam but can not pay the high college fees. This is where education loans come for rescue for those students. These loans can be paid back to the loan providers when you start earning.
8 Things You Must Know Before Taking Education Loan
Mentioned below are the 8 important factors which must be considered while applying for Education Loan.
1. Are You Eligible For Loan
If you are not earning at the time of taking loan, your parents/guardian can become co-applicant of the student loan. Co-applicants are even mandatory in full time courses while your role will be like the primary debtor.
2. How Much You Want To Borrow
Based on your course fee, determine how much amount you can generate from your savings to pay and how much amount you want to borrow from the bank as education loan.
3. Interest Rate
Do proper research and find out how much interest will be charged on your loan? Will the interest amount change be constant or it will change according to market trends?
4. Down Payment
It is the amount of money which needs to be paid at the time of receiving loan. Some percentage of the loan amount depending on banks has to be paid as down payment from your pocket. Thus, the education loan you are taking depends upon the course fee as well as your ability to generate down payment.
5. Earning Potential After Course
Find out an estimate of what package you might get after completing your course. The loan amount should be a little percentage of what you will earn. The loan amount decision should be based on your ability to pay or how much you can afford to pay after you graduate. Not every university will help you get a great package. Many universities even show packages of ex-students with inflated figures to entice new students. Do proper research on the package that your university can help you get. Also, look for job opportunities that are available for your course.
6. Keep Copies Of Loan
Keep a signed copy of all documents including terms and conditions with yourself in a safe place.
7. Make Payments On Time
Not paying your Education loan might get you into trouble. In worst scenario, your credit scores can be ruined or collection agencies may come to your door. Once your credit rating is hurt, your future loan requests will be turned down unless you have strong collateral property. (Also Read: 5 Tips To Maintain And Improve CIBIL Score)
8. Stay In Touch With Your Loan Provider
Keep yourself as well as your loan provider informed about related matters. Inform the provider if you change your address; if you find trouble paying back loan; as well as when you complete your course.
Hope you found these tips useful. Remember that Education Loan is an investment for your bright future, so manage it wisely!