Education Loan essentials: What you need to know

If you want to pursue higher education but have money issues, you are not alone. Getting a loan for education can be simple if you have the right information and resources. With good planning and research, you can get the money you need to reach your academic and professional goals. Don't let money problems stop you from following your dreams. Take advantage of the opportunities available and pursue your passions with confidence.

With some strategic planning, you can identify the right terms and conditions, and derive the best value for your Education Loan.

Check if your university is recognised

When students apply to a college or university for higher studies, it is extremely important to check if the institute is recognised as a credible regulatory body. Over the years, several private institutions have shut down due to poor practices and the students have been left in the lurch. The key issue is that in such a scenario, you would need to continue paying off your Education Loan even if the institution does shut down. This would be a poor return on investment in your studies.  

Also Read: How to select the right Education Loan for you?

Check if your future salary justifies the costs 

Many students shell out an exorbitant amount for their courses. However, their future salaries do not justify the expenditure on education in that sector. You may continue paying off your student loan even after your education is complete. Hence, it is logical to ensure that the expenditure on your studies is in alignment with the expected salary caps.

For instance, students of corporate lawyers, technology, and business programmes can expect to be compensated better than those in the social development sector, or public service. Putting in this research will help you take an Education Loan as per your capacity to pay it back, without pressure.  

Get savvy with the interest rates 

Interest rates can vary between diverse loan providers. Some loan providers also charge a processing fee. Learners may be tempted to go for the lowest interest rate. However, it is more important to check the credibility of the loan provider. A low–trust provider may have several hidden charges which can increase the cost of a loan in the long run. Making a hasty decision can jeopardise your education and therefore, your career.

Fix the EMI cautiously 

The next step is to identify the amount you need to borrow as part of the Education Loan. Once done, it is time to identify the best terms and conditions within which you take the loan. For instance, figure out the equated monthly installment (EMI), you/your parents can afford to pay.

Aligning your EMI to your monthly cash flow is an important way to arrive at this value. This approach ensures that you can honour your EMI payments every month. Leverage an Education Loan EMI calculator to experiment with various combinations of the three key variables — comprising the EMI amount, interest rate and repayment tenure — to arrive at the desired amount. 

Also Read: Invest in your skills with an educational loan

Education Loan eligibility criteria

Before starting the application process, make a checklist of the eligibility criteria for different loan providers. For instance, under Education Loan eligibility, you may need to show proof of past education, as well as admission proof to your current institute of choice. Ensuring that all eligibility criteria are satisfied enables faster processing of your Education Loan. 

Education-related Documentation  

You need to make a checklist of the documents necessary, to ensure you are making the process of submission easy. Documentation may include income proof and salary statements, a copy of your admission letter, KYC documents, and older marksheets. The Education Loan documents required may vary based on the provider.

Also Read: How An Education Loan Can Empower You

Conclusion

Axis Bank offers affordable Education Loans to boost the study goals of diverse learners. This product is accompanied by competitive Education Loan interest rates, flexible amounts, quick and seamless disbursal, and a pre-admission sanction letter. The borrowed amount can be used to fund tuition, hostel fees, and other important expenses.

Disclaimer: This article is for information purpose only. Purchase of insurance product by Bank’s customer is purely voluntary and not linked to availment of any other facility from the Bank. 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