How to get the best study loan?

Completed higher secondary education, worried about the education expenses? The public and private sector banks and Non Banking Finance Companies in India have the solution for the problem. The banks and the NBFCsprovide the study loan to the eligible candidates to cover their study expenses. But to choose the best lending organization from the available organizations in the market requires a proper understanding of the economic structure of the country and bit of online research work on the available banks and NBFCs providing the best education loan in India.

With recent spurt in global economy the cost of education is rising. However, lending institutes in India are willing to be a part of the aspirant’s dream. Education loan can be utilized for higher studies in India and abroad from different institutes. Most financial institutes, who are in the business of student loans, have, different features, depending on the utilization of the loan.These features can help differentiate between lenders. Before applying one should enquire the maximum amount of loan one can get against the co-borrower’s income, credit score and the security.

Interest rates charged on the education loan is the primary factor that earns money for the financial institutes, so they want it to be higher, but the competition in the loan market makes the organizations keep it to a level where the education loan seems affordable to the customer. Opting for floating interest rates in this low interest regime of 12.75% is always a better option. Interest rates also depend on the amount one requires. A judicious comparison can help the student find the best education loan in India that pinches least.

Different financial institutions have a means of grading different institutes/universities (mainly in terms of what the job prospects are after the course). This grading and categorization changes the interest rates from one lender to another. Not every lender classifies the same institute in same category and the same institute has different interest rates. To be thorough about the tie-ups between the university/institute and the lending organization is advisable.

Though the banks defer repayments, but they start charging the interest immediately after the disbursal of the loan amount. If the lending organizations are providing the option of paying the interest portion of the loan immediately, then use it by all means to lower the burden of the loan. It is advised, the borrower should select the organization that gives discount in the interest rates when it is paid during the moratorium period.

Fees associated with the study loan like the processing fees, administrative fees, documentation cost, etc., should be minimal.

There are some NBFCs that provide disbursement of 100% of the loan amount, but, other organizations ask for the margin money, which is 5-20% of the proposed loan amount.

If one does not have sufficient amount to repay the loan amount, then it is a wiser decision to go for longer repayment period so that one can pay thin EMIs. With sufficient fund in hand it is a wise move to go for shorter repayment tenure as it saves a lot of money.

Keep in mind the time taken to disburse the loan amount as it varies from five to fifteen days, depending on the situation.

Counselors are there with the banks and NBFCs who can guide the borrower in getting the best education loan in India, keeping in mind the borrower’s eligibility. To get the best deal it is advised to the borrower and the co-borrower to compare the offers and terms and conditions from different lending organizations before signing on the dotted lines.