Education loan is one of the ways to help the parents of the economically backward class to leave for higher studies according to the choice of the students. Those who are eligible for financial assistance for higher studies in India or abroad can take an education loan.
There are a few things you need to understand in order to choose the right education loan for your needs. Below are five of the most important:
- Eligibility criteria
The first thing you need to know is the eligibility criteria. Banks are different and so are their requirements. The bank will consider the credit score, income, existing loan, age, etc. You can apply for the loan from the bank of your choice by knowing about the courses, expenses and colleges they offer.
- Loan categories
An education loan is classified as an unsecured loan. For a secured loan amount, you will have to put up something like a house. Make a decision before applying. Be sure to understand the loan amount, the loan amount, and the interest rate. - Interest rate:Rate of interest
Interest rates should be considered when comparing banks. The education loan interest rate, loan amount and tenure should be understood by each bank.
Some of the top banks in India offer education loans at an annual rate of 11.5%. Look at banks like this.
- Margin money
Margin money is the amount you pay as a down payment on other loans, such as a home loan. A specific percentage of the course fee can be seen as this margin money. For example, if the fee for a course is Rs 10 lakh, the bank can sanction a loan of up to Rs 8 lakh depending on the eligibility. But the remaining Rs 2 lakh will have to be paid from your own pocket.
- Loan term
The last thing to consider is the term of the loan. The best banks in India offer a secured loan tenure of up to 10 years. Unsecured loans are available for up to 8 years. The course will be of six-months "duration. At this time, you only have to pay the interest on the loan.
