Business News Desk – Pursuing higher education abroad is very expensive. For this expense, most people have to take the help of education loan. It is easy to repay this education loan in installments if you get a job after completing your studies. If you want an education loan for yourself or a family member to study abroad, then it is important for you to know its process and other important things related to it. Today we are telling you some tips which can help you a lot.
1. Understand the difference between secured and unsecured loans
There are two types of education loans – secured and unsecured. In a secured loan, some kind of property has to be pledged with the bank. The interest rate on such loans is low. In an unsecured loan, there is no need to pledge any property. But, the interest rate in this is higher. Besides, the conditions for taking loan are also strict.
2. Check Eligibility Criteria
Before applying for a loan, it is important to check the eligibility criteria. This includes the student’s educational background, entrance exam scores, course of study, etc. Many times banks insist on co-applicant in giving education loan. The student’s parents may have to be co-applicants.
3. Check interest rates of different banks
Before taking a loan, you should check the interest rates of different banks. Furthermore, it is also important to understand the repayment terms. Then you can decide to take a loan from the bank whose terms seem easier to you and whose interest rates are lower.
4. Loan amount
It is also important to note how much loan the bank is willing to give. If the loan amount is not sufficient, there is no benefit in taking the loan. There is an advantage in taking a loan from the same bank, which covers the entire tuition fees. Many banks provide the total cost of studying abroad in the form of a loan.
5. Keep the necessary documents ready in advance
When applying for a loan, several documents will be required. These include university admission letter, certificate of score in the admission test, Aadhaar or any other ID proof, certificate of residence etc.
6. Understand the moratorium period
Moratorium period means the period during which you are not required to repay the loan. Generally the loan needs to be repaid 6-12 months after completion of studies. Meanwhile the student searches for a job.
