EDUCATION LOAN: FACTORS THAT YOU CANNOT MISS CONSIDERING FOR GETTING INTO A GOOD COLLEGE

The cost of educating yourself is rising fast with every passing day and one of the best ways to complete your education is by getting hold of the education loans. Education loans are considered to be one of the best ways of financing your higher education. It is obvious that as a student you will be trying your luck in the best educational institutions so that you get high salaries when your studies are completed. High salaries will also ensure that you will be able to repay your education loan over a certain time period. If you are not able to do so, you are going to face a huge amount of student debt. According to www.forbes.com, student debt in the US is $1.52 trillion.

You need to know that both the private as well as the public sector banks are responsible for offering education loans to those who are interested in pursuing higher studies in their favourite subjects. Education loans are normally provided for both the postgraduate as well as the graduate courses, which include almost every subject. Few banks have a list of their own courses, for which they grant loans. If you are in financial trouble and you are finding it difficult to complete your studies, it is definitely a great idea to opt for a student loan. However, there are certain crucial factors that you definitely need to consider before opting for an education loan.

Given below is a list of the factors that you should definitely consider before you take an education loan.

Eligibility for the loan

Before you decide to apply for your education loan, it is mandatory for you to have knowledge regarding the eligibility criteria. The reason behind this is that all the banks do not have similar terms as well as conditions and this is why you need to conduct proper research. In order to apply for your loan, you need to be admitted in recognized colleges.

If you do not earn at the time of applying for your loan, you can ask your siblings or parents to become the co-applicant of your loan. You also need to know that the amount that is going to be offered is known to vary from one bank to another, and hence, it is a must that you have a proper idea regarding the kinds of courses that are covered under this particular loan, so that it is easy for you to avoid confusions in the future.

Interest rate along with the period of repayment

After you have been admitted to any college for the course that you wanted, it is important that you try to evaluate each and every loan option, which is available. Just like when you are purchasing a product, you tend to compare shops in order to understand the best price, similarly, you need to compare every loan option so that you understand the interest rate, which is provided by two different banks. Also, you are going to spot a difference in the repayment period as well. Few banks prefer asking for guarantors, and the reason behind this is that a student can default on a certain loan amount. This guarantor is normally the guardian or parents of a person.

Future EMI Burden

It is obvious that when students are starting their career after they have finished college, they are not going to earn a huge amount of money. This is why it is suggested that students choose the loans that have longer tenure and goes up to at least 12 years. This helps in repaying the loan faster, without having to remain in debt for a really long time.

Check the existing loan amounts

It might be possible that your parents or guardians already have other loans. This is why it is significant that you consult with them before you decide to burn them with even more loans. If you find out that the existing amount of loan is small, you do not have any reason to worry. However, if you discover that your parents or guardians already have a huge loan amount; it is a good thing to ensure that you are avoiding another huge loan. This is one of the most important reasons as to why you should study the job opportunities that you are going to get after you graduate from a particular college. This will ensure that you are clearing your own debt, without having to pressurize your parents. If you are unable to clear your loans and you go into debt, you have the option of going through the debt consolidation ratings in order to consolidate your debts.

Having good knowledge regarding the terms and conditions

The terms and conditions associated with sanctioning loans are normally known to vary from one bank to another. There are numerous norms, which are mentioned along with the terms and conditions, but normally, at the time of disbursing the loan, all of them are not explained properly. This is why it is crucial that you check each and every term and condition before you decide to proceed with your loan. Do not miss out even a single clause and ensure that you have proper knowledge regarding the processing fees as well as the charges that are involved if you clear your loan beforehand or after the due date. Not having ideal knowledge can make you face trouble in the future.

Special schemes

Numerous banks are responsible for offering special schemes and it is important that you know about them before you are opting for a student loan. You need to know whether as a girl you are going to get low rates of interest or as a boy, you are going to have longer repayment tenure. No matter what, you cannot avoid having knowledge regarding the special schemes, which can be beneficial for you when you are opting for education loans for financing your college studies. Therefore, it is going to be one of the wisest ideas to check with the traditional institution regarding the special schemes that are offered by them.

Conclusion

Taking education loans is probably one of the ideal steps for constructing a better credit score because probably, this is going to be your first loan as a student. If you are capable of repaying your loan, without going into debt, it will be easier for you to apply for other loans in the future.