Education loans are a huge relief for students who cannot afford expensive course costs. Education gets costlier if it involves overseas studies. Loans not only enables the child to fulfil their dream but also eases the pressure of the parents’ shoulder. The Indian Government has requested the lenders to prioritise on educational loan as much as a home loan or a personal loan. It has become more of a necessity today. In such scenarios, banks and other financial institutions offer education loan to anyone in India, especially the worthy aspirants.
However, there are some mistakes that people commit when taking up a student loan:
- Alternate schemes: The internet is a boon to the humankind, especially for the regular banking customers. You can research, read features and benefits, conduct a comparative analysis as to which course will fit your bill and then make an informed decision. Do not fixate on a high-end college. Look out for other options that offer the same education at a lower fee. This way you get a quality education, and it does not hamper your goal as well.
- Research: Now, look for the right lender. You can do that online as well. You can check on third-party websites and monitor their features, interest rates as well as the equated monthly instalment (EMI) you have to pay towards the loan amount. This way your budget is under control and you borrow what you need.
- Loan amount: Another mistake that we all commit when taking out any loan is that we take more than the actual requirement. When it comes to education loan, there is a tendency to borrow more money. Parents believe their child will require cash for accommodation, day-to-day purchases, etc. So, borrow the money that you need. Do not add on to your debts.
- Repayment: Avoid repayment defaults. Chewing more than what you can bite is not going to be helpful. Some want to get rid of their loans as soon as possible and opt for unrealistic repayment methods. It is always better to use the education loan EMI calculator that guides you as to how much you will have to shell out every month towards your loan. It boosts your credit score as well.
- Prepayments: A loan is always a burden. Precisely why people look to get their investments paid off earlier than the stipulated mandate. Although personal loans do not provide you with the option of pre-closure, you can always prepay the study loan without the stress of any penalty. It also reduces your interest and the total sum as well.
Plan in a better way and choose an education loan wisely!