4 Factors to Consider Before Taking an Educational Loan
The need for educational loan
Having a good education today is your ticket to a well-paid job and a secure career. For this reason, many students consider going abroad to pursue their under-graduate or post-graduate courses. But this comes with a massive expense. Even in India, the fees of the prestigious institutes are soaring high. For sponsoring the education of students, banks offer a type of loan known as educational loan. This loan covers the tuition fees and study expenses of the students when they opt for higher studies. However, before you apply for a loan, we suggest that you think about the aspects mentioned below.
Deciding the course and the amount
Determining the right course from the institute/university of your choice does matter a lot. In doing so, you will get to know the type of job you can receive after its completion. The type of job is again important as it is going to help you in repaying your loan. Also, compare your chosen course in different universities. If in case you plan to study abroad, compare the courses in different countries as well. Check for the living expenses, cost of travel and other miscellaneous expenses. Identifying the overall expenses will help you decide the amount of loan you might require.
Think about the job opportunities available to you after you complete your course. Consider how much the job will pay and if the amount will be enough to help you repay the loan. If you do not get such a job, ensure that you have a back-up plan. You can take help from your parents to sponsor repayment of the loan in the initial period; when your salary is not sufficient.
Evaluating all the options of loan is the next step you should take into consideration. The interest rate on an educational loan is lower than that on a personal loan. But since the past few years, the average educational loan interest rates have increased. Loans above 4 lakhs require some amount of security. Additionally, assure that you have a good credit history with the banks. It enables a smooth process for the loan approval.