Description/ Specification of Student Loans
Because of the ever-raising cost of education, it is becoming increasingly difficult for most families to finance the education of their children. The problem becomes more acute in case of higher education and education abroad. Govts, Banks, and financial Institutions have stepped in to provide a solution this issue by providing student loans. Here we will discuss various aspects of this student loans. Student loans are available for all stages of education for school level up to post graduation level. However not all courses or Institutions are eligible. So first the aspirant student ahs to choose a course and institution that qualifies. In general, the course chosen should be one where there is a high probability of getting a well-paid job, so that the loan can be paid back comfortably. Following aspects are to be kept in mind. 1. Loan amounts vary from bank to bank and can start anywhere from Rs. 5 lakhs and goes up to Rs. 20 lakhs. 2. Cost components for a loan comprises of processing fees and interest. In India, some banks offer an interest as low as 6-7% percent. However, most banks offer higher interest rates in the range of 8-11%. Girl students are often offered an additional discount on interest rates. 3. Typically, Indian banks provide student loans for a maximum of 8 years for unsecured loans (without collateral) and up to 10 years for secured loans (with collateral). 4. Normally Collateral is required for loans above Rs 4 lacs. Collateral can be provided in the form of Residential property/land/Fixed Deposit to be given as guarantee for loans. 5. Loan duration can be typically up to 10 years after completing the course. The longer the duration. Higher will be the interest rate charged, but lower will be amount of EMI. If one has the ability to pay, then it is advisable to take a shorter loan tenure. There is a mortarium period provided by some banks, just after completing the course during which no principal amount is to be paid and only interest is to be paid. 6. Som lenders also offer provision for prepayment of loans, without paying any penalty charges. 7. Although Student loan or educational loan is often offered for larger than the amount actually required, it is advisable to only part finance the course with loan and the balance from other sources. 8. Loan can have a co-applicant , who is a family member, whose income can provide guarantee for payment. 9. The loan amount , in case of studies abroad, usually covers airfares, Tuition fees, accommodation charges, Project/thesis expenses etc. Procedure To Obtain a Student Loan: The student can apply for loan by visiting a bank branch or can also apply a loan online. Various documents are to be provided which typically will include KYC, Admission letter, Cost of the course, Mark sheets of courses completed (if applicable),Collateral documents if required, Income Proof of co-applicant/guarantor, ID Proof, Residence Proof, photo of applicant, approval of visa(for study abroad)among others. He / She can meet the concerned bank personal who can guide regarding the entire process. Conclusion: Student loans can be a valuable tool for accessing higher education, but they come with significant responsibilities. Education By nature is an investment and money spent for it is not an expenditure. Navigating the complexities of student loans requires careful consideration of the types of loans, interest rates, repayment plans, and potential forgiveness programs. By approaching student loans with a clear understanding and a well-thought-out plan, students can make informed decisions that set them on a path to financial success after graduation. Please note that this is not a professional financial advice. To get professional financial advice , contact a professional financial advisor.
Student Loans
Because of the ever-raising cost of education, it is becoming increasingly difficult for most families to finance the education of their children. The problem becomes more acute in case of higher education and education abroad. Govts, Banks, and financial Institutions have stepped in to provide a solution this issue by providing student loans. Here we will discuss various aspects of this student loans. Student loans are available for all stages of education for school level up to post graduation level. However not all courses or Institutions are eligible. So first the aspirant student ahs to choose a course and institution that qualifies. In general, the course chosen should be one where there is a high probability of getting a well-paid job, so that the loan can be paid back comfortably. Following aspects are to be kept in mind. 1. Loan amounts vary from bank to bank and can start anywhere from Rs. 5 lakhs and goes up to Rs. 20 lakhs. 2. Cost components for a loan comprises of processing fees and interest. In India, some banks offer an interest as low as 6-7% percent. However, most banks offer higher interest rates in the range of 8-11%. Girl students are often offered an additional discount on interest rates. 3. Typically, Indian banks provide student loans for a maximum of 8 years for unsecured loans (without collateral) and up to 10 years for secured loans (with collateral). 4. Normally Collateral is required for loans above Rs 4 lacs. Collateral can be provided in the form of Residential property/land/Fixed Deposit to be given as guarantee for loans. 5. Loan duration can be typically up to 10 years after completing the course. The longer the duration. Higher will be the interest rate charged, but lower will be amount of EMI. If one has the ability to pay, then it is advisable to take a shorter loan tenure. There is a mortarium period provided by some banks, just after completing the course during which no principal amount is to be paid and only interest is to be paid. 6. Som lenders also offer provision for prepayment of loans, without paying any penalty charges. 7. Although Student loan or educational loan is often offered for larger than the amount actually required, it is advisable to only part finance the course with loan and the balance from other sources. 8. Loan can have a co-applicant , who is a family member, whose income can provide guarantee for payment. 9. The loan amount , in case of studies abroad, usually covers airfares, Tuition fees, accommodation charges, Project/thesis expenses etc. Procedure To Obtain a Student Loan: The student can apply for loan by visiting a bank branch or can also apply a loan online. Various documents are to be provided which typically will include KYC, Admission letter, Cost of the course, Mark sheets of courses completed (if applicable),Collateral documents if required, Income Proof of co-applicant/guarantor, ID Proof, Residence Proof, photo of applicant, approval of visa(for study abroad)among others. He / She can meet the concerned bank personal who can guide regarding the entire process. Conclusion: Student loans can be a valuable tool for accessing higher education, but they come with significant responsibilities. Education By nature is an investment and money spent for it is not an expenditure. Navigating the complexities of student loans requires careful consideration of the types of loans, interest rates, repayment plans, and potential forgiveness programs. By approaching student loans with a clear understanding and a well-thought-out plan, students can make informed decisions that set them on a path to financial success after graduation. Please note that this is not a professional financial advice. To get professional financial advice , contact a professional financial advisor.
