3 minsDecember 15, 2016
An education loan can be that crucial bridge which gives wings to your dreams of going ahead with higher education of your choice. Quality education however, does come at a premium. In such a scenario, don’t let your financial limitations
clip your wings. Today, you have the option to take an education loan from banks at very competitive rates. While certain loans may require collateral, in most cases, the process of repayment starts
only once you find a job. While availing a loan, here are some things you need to keep in mind.
I was a regular commerce graduate doing a 9 to 5 job. It had never occurred to me that I could study further and change my life. When I saw a few friends availing for loans and starting a new chapter in their lives, it struck me that I could do the same. I opted for the Axis Bank education loan and got a MBA I marketing. My life has never been this exciting!
Anubhav Lal, Marketing Professional, 29, Mumbai.
- Apply with or through your parents
- The eligibility for education loans differs based on the terms offered by respective banks. If you are applying for a higher loan amount (anything more than 5 to
7.5 Lac INR), you might be required to submit some collateral to the bank. As a student, this may pose an issue and hence, it may be in your interest to apply for education loans along with your parents as co-applicants. Also,
when one or both the parents are working, your credibility is enhanced. This, in turn, ensures a grant for a higher loan amount.
- Map your repayment plan
- You should know or estimate the EMI amount you would need to pay back. There are many online education loan calculators available to help you with this. All you need
to do is plug in your loan requirement and tenure and lo and behold, details like interest rate, EMI, and processing fee are automatically populated. Once you click on whether or not you are interested in pre-payments, you will
be able to increase or decrease EMI details based on how much you think you can repay consistently. Most banks offer a grace period before the repayment starts. That allows you time to join your job post studies, so that you are
better equipped to furnish EMIs.
- Get your paperwork in order before you start
- For a hassle-free processing of your education loan, it would be advisable to keep all relevant documents properly verified and/or attested. Valid ID proofs, residence proof, admission letter, components of tuition fee, bank statement
and IT return forms (if parents are co-applicants), income proof, all relevant copies of mark sheets and academic records and other related documents are some of the papers that might be required.
In a nutshell, do some groundwork
before applying for your loan. Know what works in your favour so that you can get the most out your loan as you step up the corporate ladder; one step at a time.