In an era where higher education costs continue to rise, Education Loans have become a crucial resource for students aspiring to pursue college degrees. Education Loans offer financial support to cover tuition fees, living expenses, and other educational necessities, allowing you to access quality education.
However, some myths about Education Loans often deter students from considering them as viable financial options. Continue reading to learn more.
Beware of these common myths about Education Loans
Education Loans play a crucial role in making higher education easily accessible. However, misinformation surrounding these financial instruments can often create unnecessary confusion and anxiety. Here, we debunk five prevalent myths about Education Loans, providing you with much-needed clarity.
1. Preferring self-financing over a loan
Opting for self-funding over an Education Loan may seem advantageous initially, as it avoids accruing debt. However, using your savings means tapping into your emergency funds that could otherwise be invested to safeguard your future financial stability. You should consider availing of an Education Loan while keeping your savings invested. Additionally, Education Loans offer enticing benefits such as tax relief, which are not available when self-funding your studies.
2. Education Loans need a high credit score
While a good credit score can be beneficial, it's not a strict requirement for obtaining an Education Loan. Lenders put more focus on the student's academic performance and the educational institution's reputation rather than the credit score. Additionally, having a co-borrower who can provide proof of regular income can further mitigate the need for a high credit score.
3. Education Loans need a high-value collateral security
Debunking a myth about Education Loans reveals that you don't always need high-value collateral. Many financial institutions offer unsecured Education Loans, especially for students attending reputable institutions or pursuing degrees in high-demand fields. Axis Bank's Prime Abroad Education Loan product offers loans up to ₹1 crore without collateral to meritorious students. Such unsecured loans are based on factors such as academic performance, the institution's ranking, and the student's potential earning capacity to repay the student loan interest in time.
4. Taking an Education Loan is a complicated process
One popular debt myth is the belief that obtaining an Education Loan is time-consuming and complicated. You might be pleasantly surprised that if you fulfill the Education Loan criteria, your application will be quickly approved, and you won't have to worry about financial delays. Online applications, automated checks, and digital documentation have made accessing education loans smooth and speedy.
5. Education Loans don’t cover other expenses
One of the Education Loan misconceptions is that they cover just tuition fees. Most lenders provide loans, including accommodation, travel, and other living costs. It's crucial to thoroughly review the terms and conditions of different loan options to find one that meets all your financial needs.
Also Read: Getting lowest-interest Education Loan in India - Complete Guide
Conclusion
Debunking common myths about Education Loans is essential for empowering students to make informed decisions about their futures. You can easily navigate the process by understanding the true concept of Education Loans and dispelling myths surrounding their use and repayment. Apply for a Student Loan today and achieve your career goals without undue financial strain.
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
