Taking an education loan from banks and financial institutions are increasing day by day, as students opting for higher education in India and abroad and they are having a low financial condition to fulfill higher education dreams. Higher education or professional courses in colleges or universities have become pricy. Education loan helps in getting admission of scholars in prestigious colleges to study his or her favorite career discipline. It removes monetary fears and accommodates education expense.
Six things to keep in mind while applying for an education loan are: course, college, bank, expenses, loan plan, payback time and hidden rules of the bank. One should careful in opting education loan as its effect last for years on your credits and future loans.
The very first step is to know the course you wish to do and do. It must be recognized one so that you can provide courses, course completion time and expense details in the bank.
Search for colleges you want to pursue in your career. College or university must be recognized or affiliated as according to government rules. Check placement, premise, faculty records and your course availability in the college. The bank provides education loan easily and quickly for the recognized college.
Government bank provides Federal Student loan and private bank provides Private Student loan. To have tax benefits use Indian Scheduled banks, national banks, trusted private banks, NBFC or gazetted financial institutions and maximum eight years of down payment.
Now, after getting all information about the course and college, now do the calculation for the total expenses that will incur. It is useful to sort those banks that provide required amount of loan on lesser interest rate. To take education loan, chose a guarantor, assurer of your promises, to and for the bank. And he will bear shortfall on behalf of loan taken.
Check loan plan suitability:
Explore education loan plans which offer subsidies, marginal interest rates, scheme for females (as required) and covers relevant education expenses for tuition, admission, hostel, library, internet, boarding and lodging and so on to pursue higher studies. The loan, you’re taking, ought to be as per actual need, lesser and save income tax as you have to pay back the amount with incurred interest in a limited time period. Use Income Tax Act, Section 80E to get tax benefits in education loan.
Opt to take a loan on an eligible student’s name in installments and begin to pay back within Grace period and it must be the one or less than one-third of his future monthly income. Grace period is the time starting after completion of the course and continues up to one year after course completion or up to six months of employment. Tenure of loan shouldn’t go for the long time repayment process. The repayment period must up to eight years, as it provides tax benefits, with less rate of interest and down payment amount. Loan tenure be not short enough as you will have made to pay back more.
Before accepting bank loan, take a glance at terms and conditions, clauses, hidden charges, rules and procedure for repayment, pre-payment, penalties, delayed payments, defaults, deferment, pre-closure and cancellation of the loan. If you any doubt, ask for it. Make payments on time so that no defaults occur and you can further able to take loans.
Keep all the document copies for verification and for future use. Documents like student’s details, eligibility, college admission, course, credits, tax benefits, loan taken, interest rates, guarantor, down payment, employment etc.
Ace your dreams to study further in your dream college and become future professionals, by proper care in taking and repaying education loans. For any pitfall or remedial guidance to get education loan, consider trusted, educated person who can elaborate you in details about the bank, procedure of borrowing, repaying, and other info related to education loan as per your budget.