What to keep in mind while applying for an education loan?

Education loans make higher education a reality for those who fall short of resources. With the cost of education soaring high, higher education seems to have become a far-fetched dream for many deserving students. Premier institutions have exorbitant fee structures and the best way to secure a seat yourself in a good institute is to take the aid of an Education Loan. Education loans have emerged out to be the most sought after method for funding one’s higher education. Thanks to a number of private as well as public banks offering education loans with varying schemes and plans, it has become possible for millions to realise their dreams of higher education.

These loans can be paid off later by the students, being funded by their jobs after the completion of their course. Although the process might seem quite harmless yet there needs to be a number of factors that one must know before applying for an educational loan.

Know Your Loan:

Before you apply for a loan, know the type of loan that is being issued. There majorly two types of loans; one provided by the government, referred to as the Federal Students Loan while the other is Private Student Loan which is provided by private banks and other monetary institutions. Every bank has its own set of policies, rules and rates. Most of the time, banks either fund the loan directly to the institution or pay it to you. Depending upon the amount you need, there are a variety of documents that need to be produced like income certificates, statement of assets & liabilities etc.

Finalising the Bank:

Banks offer both secured and unsecured loans. Security is essential for loans that are required to fund pricey courses. Check the policies of a number of banks and choose the one which provides the best interest rate, terms & conditions of paying back the loan and moratorium period. Pin in upon a bank which provides the best loan terms rather than the maximum monetary assistance.

Before filing in for the application, you must know everything about the whole process of taking and paying back the loan. Students must be apprised of the course fees, essential documents required, scholarship grants, and the rate of interest or any other important areas of loans. Have a thorough knowledge about all the factors associated with the loan such as the payable EMIs, service charges, payments and part-payment options.

Be prepared for an interview:

If you’re applying for a loan that funds an expensive course, you might as well be needed to appear for an interview so that the bank officials might decide whether you’re worthy enough for the application or not. The interview is also meant for the verification of all original documents and identity proofs. Keep in mind to be properly supplied with all essential documents; make sure not to forget your certificates! Students who apply for courses in foreign universities must keep their passport, visa and other essential ID proofs ready with themselves for any kind of verification.