Dreaming to pursue your higher education in abroad? In India, there is around 80 – 85 percent of students, who want to pursue their graduation or post-graduation according to their choice, acquire a degree from one of the top universities abroad. Earlier this dream was nearly impossible for students who belong to the middle-class family as it requires a lot of money.
Today, there are many banks that are offering education loans to people to meet their dream of pursuing education abroad. As there are a number of banks that offer education loans at competitive rates, you need to be aware of six important factors before applying for an education loan.
Different banks offer different interest rates on education loans, and it totally depends upon the loan amount you opt for. You need to do a market survey and check which bank offers the lowest interest rates. Likewise, check whether the loan costs are fixed or skimming. It is in every case better to select gliding financing costs as you can trust that rates will fall in the coming years. In this manner, consistently contrast the rate and all banks before applying for an advance.
How is interest charged?
Always enquire about the loan fees being charged by your bank. Also, check the criteria on the basis of which interest rates are calculated on a daily or quarterly basis. In the event that you don’t enquire about the rates, at that point you may be winding up with more enthusiasm at the hour of reimbursement. Thus, explore appropriately to decrease the weight of reimbursement.
The Waiver Period
There are many banks that provide the facility to repay the loan once the student completes the education and joins a firm. This facility helps students to repay the loan amount in installments after you receive your salary. Check if your bank offers this facility as it will make you tension free until you finish off your studies.
Minimum Fees And Other Costs
There are many charges associated with education loans like processing charges, administrative charges, and others. Processing fee includes search fees, document preparation fees, underwriting costs, fees for lawyers, cost of employment verification, and more.
Check For Collateral, Guarantee, Or Security
Collateral is something that the lender requires from the student after granting a loan. If the loan amount you applied for is up to 4 Lakhs, then there is no need for security. But in case this loan amount exceeds 4 lakhs, then the bank demands security to put as collateral. Always investigate thoroughly about the security features before your bank grants you a loan.
A down payment is an amount that the borrower needs to pay as the bank does not offer 100 percent on the loan. The money you put as down payment varies from bank to bank. Usually, the amount you need to pay as down payment ranges from 5 to 25 percent. There are few banks that demand high down payment which makes loans unaffordable.
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