Education Loans are a valuable tool for funding your academic pursuits. Student Loans have made access to good quality higher education accessible and affordable. Reputed institutions like Axis Bank offer high-value Student Loans at competitive interest rates, even without collateral in some cases. This ensures that you can pursue your educational aspirations without undue financial strain.
Common Student Loan mistakes to avoid
1. Borrowing more than you need
It's tempting to borrow the maximum amount offered in your financial aid package, especially when you're uncertain about future expenses. However, borrowing more than necessary can lead to higher debt burdens and increased interest payments in the future. Before accepting a loan, carefully assess your financial needs and borrow only what you require to cover tuition, fees and essential living expenses.
2. Ignoring interest rates
Interest rates significantly affect the overall cost of your Education Loan. It's essential to check the interest rate associated with the loan you're considering and how it will affect your repayment obligations over time. Choosing a loan with lower interest rates can save you money in interest payments over the life of the loan. Therefore, be sure to compare rates and terms carefully before deciding.
3. Paying only the minimum loan amount after graduation
Once you get a job and get your first salary, spending on luxury items like a fancy phone or a car is tempting. However, indulging in these purchases may leave little remaining to repay your Education Loan. Avoid this common Student Loan mistake and maintain your focus on prioritising the repayment of your loan first.
4. Misunderstanding the moratorium facility
The moratorium period allows you to repay your Student Loan after a delay of 6-12 months from completing your course. Opt for this option only if you require it and lack adequate income to cover your EMIs. It's crucial to understand that the moratorium is merely a deferment period, not a waiver, as the accrued interest will be added to your loan balance, potentially prolonging the loan tenure in the future.
Also Read: How to get an Education Loan in 6 easy steps?
Conclusion
Avoiding these common Student Loan mistakes can help you minimise debt, save money on interest and achieve financial stability after graduation. Evaluating Axis Bank's Education Loan criteria and terms thoroughly can help you make an informed decision. By borrowing responsibly, checking interest rates and repaying EMIs on time, you can confidently navigate your Education Loan and set yourself up for success in the future.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision
