Things to consider for education loan - Fusion - WeRIndia

Things to consider while opting for education loan

Things to consider while opting for education loan

Education loan is very important now-a-days due to the increasing costs in education sector, especially if you want to study a professional course, join a business school or study abroad. In such times, education loan helps fund college fees and other things.

In recent days, many banks are providing education loans. These include public and private sector banks. Though the terms are somewhat flexible in private banks, interest rates are more in them than the public sector banks. The education loan amount varies with course that is chosen by the student. You can avail a maximum of Rs.20 lakhs if you are seeking admission abroad. Some banks are offering loans up to Rs.1 crore based on the repayment capacity.

Education loan up to Rs.4 lakh does not require any collateral or margin money. After that, collateral or third party guarantee is needed based on the loan amount. There are certain things to consider while you opt for education loan. Here is a check list for you.

Interest rate is one of the main things. Though interest rate depends upon the loan amount, it varies with each bank. You have to check whether the interest rate is fixed or floating. If you pay interest from the beginning of the loan period, you can avail concession for the remaining loan tenure when applied in moratorium period.

Check the down payment amount which varies with each bank. The down payment ranges from 5 to 20 percent of the loan amount which should be borne by the applicant.

Waiver period means the period till the applicant gets job and starts repaying the loan. Though the period differs with loan amount, you need to consider the waiver period of various banks that best suits you.

Also check for any fees associated with the loan like processing fees, documentation fees etc. You have to check if there are any pre-closure charges of the loan as well.

The Union Government launched a web portal named ‘Vidya Lakshmi’ for the benefit of students who seek education loans in the country. It gives a glance of all relevant information about various banks. Students who register with the website can apply to multiple banks on this web portal.

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