3 tips to consider if you are planning to take an education loan

1. 3 tips to consider if you are planning to take an education loan

2. It is the dream of many students to study in a reputed college and build a strong career. But they often back out looking at the high university fees and the cost of living in a foreign land. If you too are concerned about the finances involved in affording higher education, don’t worry. Simply take an education loan and follow your dreams of attending a foreign university. • Now, getting a student loan is relatively easier these days due to the availability of many options of financing from banks and financial institutions. However, taking an education loan requires meticulous planning. Also with so many options to choose from, you may end up getting confused where and how to begin selecting an education loan that fits your course cost and repayment capacity. To lessen your work and ease out the loan selection procedure, here are 3 tips to consider while planning to take an education loan.

3. Decide the principal amount First, decide how much money you can pay from your savings account towards your course fees and other expenses. This will help you understand how much you will need to borrow from the bank or financial institution. Study loans not only cover tuition fees but also living expenses while you study abroad so, you must prepare a thorough schedule of costs that you will incur. These expenses could include accommodation, travel, groceries, food, study materials, laptops, and so on. • Pay attention to interest rates Interest rates may vary a little between different banks and financial institutions. However, even if the difference is minor, the interest rate will still have a huge impact on the overall repayable loan amount. This is why it is better to look for lenders who provide loans at low-interest rates. Speaking of interest rates, it is also important for students to consider whether they wish to take a floating rate loan or a fixed-rate loan. The interest rate will significantly impact the EMI payable towards your loan after you finish your course. So, make a careful decision on this matter. Get professional advice on choosing the interest rate, if required

4. Choose the loan tenure wisely A student needs to choose their loan tenure wisely. Depending on your loan amount and repayment capacity, you can select the loan repayment period. If you decide to go with a longer tenure, your monthly EMIs will reduce; however, the amount of interest that you will have to pay on your education loan will increase. This will increase your overall loan repayment amount. It is thus, advisable to go for a shorter tenure to repay your education loan so that you can clear your debt faster. Your monthly EMI will be comparatively more but your overall cost will reduce. But do decide upon your loan tenure depending on your financial capacity. Your salary should be enough to cover payments. Hope this article has been useful to you and helps you in selecting an education loan that best suits you. All the best!

5. We hope this article was helpful to you.

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