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How to Pick the Right Student Loan
January 23, 2019
A good education doesn’t come cheap these days. While undergraduate courses like engineering can easily set you back by up to ₹10 lakhs , post-graduate courses in management cost up to ₹20 lakhs.
This is exactly why a large number of students avail education loans.
The Fundamentals of Student Loans
Most banks offer student loans up to ₹10 lakhs for Indian universities and up to ₹20 lakhs for universities that are based overseas. The loan itself covers a variety of expenses including the tuition fee, books, equipment, etc.
There are many banks and even other non-banking financial companies (NBFCs) that offer student loans in India. However, you must consider a few factors before you finalize your option. These are:
Most banks offer student loans up to ₹10 lakhs for Indian universities and up to ₹20 lakhs for universities that are based overseas. The loan itself covers a variety of expenses including the tuition fee, books, equipment, etc.
There are many banks and even other non-banking financial companies (NBFCs) that offer student loans in India. However, you must consider a few factors before you finalize your option. These are:
Interest Rate
The interest rate determines how much amount you pay to the bank in the end. In India, the rate varies from 9.5% to 14.5% but can go even higher depending on your credit score and financial history.
The interest rate is one of the most important factors to consider when comparing education loans. However, you should also read the terms and conditions of a loan before signing on the dotted line.
The interest rate determines how much amount you pay to the bank in the end. In India, the rate varies from 9.5% to 14.5% but can go even higher depending on your credit score and financial history.
The interest rate is one of the most important factors to consider when comparing education loans. However, you should also read the terms and conditions of a loan before signing on the dotted line.
Moratorium Period
Moratorium period is a grace period that your lender gives you after you graduate so that you have enough time to find a job. The idea here is that you can start repaying your loan only when you start receiving a salary.
When comparing your options, you want to ensure that the loans come with a grace period that’s long enough. Some banks also offer a discount of 1% on the interest rate when you start paying the EMIs during this period itself. So, that’s something you can look into as well.
Moratorium period is a grace period that your lender gives you after you graduate so that you have enough time to find a job. The idea here is that you can start repaying your loan only when you start receiving a salary.
When comparing your options, you want to ensure that the loans come with a grace period that’s long enough. Some banks also offer a discount of 1% on the interest rate when you start paying the EMIs during this period itself. So, that’s something you can look into as well.
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