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Types of Education Loans: Which One Is Right for You?
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Introduction
Looking to pursue your higher education without any hassles or financial constraints? Be wise enough to look for options to ease your enrollment, so that you can ace your education program with flying colours. An education loan helps you fill your financial requisites needed to achieve your academic aspirations by studying within the country or abroad. However, with many different types of education loans available, you are bound to be confused while choosing the right one. This blog by Qck Loans guides you to choose the right loan that suits your needs.
Understanding the Types of Education Loans
An education loan helps students cover their higher education-related expenses by acting as financial aid to ease their burden. These expenses generally include tuition fees, accommodation and food charges, examination charges, library fees, book and laptop purchase charges, and other miscellaneous costs. As a student, there are many lending entities from where you can avail the most suited from among various types of education loan offered by different financial institutions, like banks, NBFCs, and government-sponsored schemes. Read on to know more about these education loan types.
Types of Education Loans
Students can opt for either an education loan for abroad studies or within the country. It can be broadly differentiated based on criteria such as:
Based on the Classes of Education
-
Undergraduate Programme Loans:
For anyone going to pursue UG programs such as bachelor's in arts, Science, Management Studies or Engineering among others. -
Postgraduate Programme Loans:
Students who are interested to specialize in specific programmes by applying for master's degree, MBA and other similar qualifications -
Professional Courses Loans:
To become experts in certain fields and or get certified in fields like medical, law, engineering or life science for research or practicing purposes.
Based on the Location of the Institute
- Domestic Types of Education Loans: For studying within India
- Education Loan for Abroad Studies: For pursuing higher education abroad
Based on the Lender Entity
As discussed earlier, you have many options for opting for the best from different types of education loan
-
Government-Backed Education Loan:
This education loan is offered by institutions run under the government regulations and offer loans with less interest rates and flexible repayment terms. -
Bank Loans for Education:
Major public and private sector banks provide education loans with varying interest rates and eligibility criteria. -
NBFC Education Loans:
Non-banking financial institutions also have the liberty to offer different types of education loans, but interest rates differ slightly from banks and government backed entities, with lesser loan amounts.
List of 7 Key Factors for Choosing an Education Loan
- Interest rates comparison
Look for better interest rates when you compare the types of education loan providers and choose the one that suits you with their best deal and matches all your requirements. - Repayment options and tenure:
Check if you have options like EMI and bullet payment so that you have the liberty to choose your repayment method and period to plan accordingly. - Loan amount calculation:
Make a rough initial calculation to ensure the education loan covers all your education and the miscellaneous expenses. - Pre-check eligibility criteria:
Ensure you have the necessary pre-requisites check-marked for whichever lender you are opting, in order to get your education loan disbursed quickly without hassles. - Option of a collateral:
Some types of education loan lenders may require collateral, some may not, and offer unsecure loans. According to your financial conditions, be wise to choose your favourable lender for your education loan for abroad studies or in India. - Transparency in processing fees:
Check for all the details for processing charges before applying for a loan to avoid incurring any type of hidden charges later, midway through the loan process. Compare the processing fees charged by different lenders. - Be informed of penalty charges:
Me mindful of the penalty charges levied for defaulting or making late payments of your loan amount.
3 Key features of Private banks Education Loans
- Higher loan amounts: These banks have the capacity to provide larger chunk of different types of education loan for abroad studies usually, as they require a large amount for those going from India.
- Currency conversion relevant to the country applying for: Students have the privilege to receive the education loan disbursed in foreign currency to facilitate easy repatriation of the amount or to make repayment.
- Margin money: Sometimes, a small part of the total cost of the education may need to be arranged by the student upfront.
Choosing the Right Education Loan
If you are looking for the best among the types of education loan, ensure to check all the criteria which suits best for your situation:
-
Course and institution:
The course you have chosen along with a reputable institution will determine how easily you will get the loan and also the amount required. The more reputable the course and institution is, the more loan amount you may receive. -
Financial profile:
Your family’s income status, bank balance, credit score, and co-applicant's financial standing will majorly influence your eligibility. -
Repayment capacity:
Make sure you do not default on making your repayment at any point in time. Based on this, you can choose a lender who gives a higher amount even if it comes with more stringent guidelines. -
Interest rates:
Compare the interest rates and go for the ones best suited to you.
Tips for a Smooth Loan Application Process
- Maintain a decent academic record with extracurricular activities and certifications that makes your profile a strong one and enhances your eligibility.
- Prepare a checklist of all documents required and arrange them accordingly. A miss can make you pay a heavy price of rejection of your loan application.
- Be fully informed of the terms and conditions before signing and understand them thoroughly as they hold good till you finish repaying the loan.
Conclusion
Choosing among the types of education loans can become challenging for a student. As it acts as a breather for you as students to pursue their academic aspirations. At times it can turn out to be more of a burden by making blunders such as defaulting payment or paying extra for hidden charges, all because you were not guided properly at the time of applying. To avoid such scenarios, Qck Loans, a leading brand offering education loans for abroad studies mostly, can guide you to choose the ideal option from the education loan packages with us. Visit our website Quick Loan to learn more and apply for an education loan today.
Apply now at Qck Loans.
For any queries related to which types of education loan is better for you, reach out to us at Qck Loans
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