Student loans for education and upskilling loans are popular, accepted ways to fund your higher education dreams. Although taking loans without a regular income or job security sound daunting, it doesn’t have to be! Read this blog to understand how to easily choose a student loan and find the best of the lot for you.
5 Tips to Ensure You Select the Best Student Loan
1. Research the Different Types of Loan Options
The market is flooded with banks and NBFCs ready to help students with loans. Most of these financial institutions aim to provide zero-cost EMIs for avid learners planning to upskill. However, before selecting the loan for yourself, it is ideal to do thorough research on your own or take the help of a financial advisor to know your loan options.
Do not decide on availing of a student loan for upskilling based on a whim. Keep in mind the following factors while selecting a student loan for you:
- Enquire about the interest rates
- Do check the processing fees
- Understand the terms and conditions well
- Decide the loan amount
Interest rates are an essential aspect of loans that you must consider while devising a loan repayment plan. You can determine whether you want a fixed or floating rate of interest. While a floating interest rate is subject to quarterly revision, the fixed rate will not change for the entire repayment tenure.
2. Choose a Course With Better Job Security
The type of course and the university you opt to study from play a pivotal role in the student loan that you wish to apply for. Therefore, before researching your loan options, figure out if the program you will be taking up will provide ample job opportunities upon completion. Does the institute offer job placement after the course completion? A course that offers better job security will help you pay your loans faster and earn you convenient, no-cost financing solutions.
3. Fix a Loan Amount After Determining your Savings and Expenditure
Make an exhaustive list of all your expenses and the amount you can save after keeping aside an emergency fund. This will help you determine how much of the course fee you can afford and how much loan amount you will require. This exercise will lessen the loan burden and help you easily get the loan.
4. Select Your Preferred Repayment Tenure
For easy repayment of educational loans, it is crucial to fix the repayment tenure as interest rates depend on it. The longer the repayment tenure, the lower the EMI amount and vice versa. When you choose a more extended repayment tenure, the EMI amount will not burden your monthly budget, thus allowing more financial freedom. However, if you have the money to repay the loan faster, you can benefit from lower interest rates.
5. Enquire About the Coverage Available With The Loan
Make sure you detail everything that the student loan will cover. For example, if you are taking a loan for upskilling, along with the tuition amount, check whether the loan covers the lab equipment fee, exam fee, etc. If you are studying abroad, calculate the costs incurred in the local currency and double-check with the financial institute for the exchange rates. For loan coverage that includes course fees, electronics to aid your study and more, Eduvanz is a great option.
Picking the right educational loan will be one of the most important decisions you will make as an adult. Therefore, before leaping, you must thoroughly research all aspects of taking a student loan. Do engage with us on the discussion forum at Exalt.Club for more financial advice and benefits of upskilling for all.
Frequently Asked Questions
1) How can I lower my education loan interest rate?
Reducing your loan amount through regular repayment will lower the interest paid every instalment. Here’s how to do that:
- Adjust your payment plan
- Choose a shorter repayment option
- If you can, make multiple payments in a calendar month
2) What factors might be essential before taking a student loan?
Here are the factors you have to consider before taking a student loan:
- Understand different types of loans
- Take the help you a financial adviser
- Figure out the impact of debt on your savings
- Study the repayment options thoroughly