Busting 3 myths about the education loans

1. Busting 3 myths about the education loans Are you planning to take an education loan to study at a prestigious university? You may be good at studies but may not have money to fund your higher studies. An education loan will help you in this scenario. Getting an education loan to fund your higher studies may seem daunting to you at first. So, we have compiled and busted some myths about education loans to make the education loan process smoother for you. The 3 myths are: 1. Education loans cover tuition fee only Students have the misconception that lenders cover the tuition fee only when they give education loans. Many students secure admission in a university far away from their homes. To finance their stay in a foreign city while studying, they would have to rummage for money. And they may not have it. Therefore, many lenders cover all the expenses of students' higher education. They will pay for your college tuition fee and apart from that also pay for your travel, lodging and boarding until you complete your education, the exam fee, the library fee, the stationery expenses, laptop and so on. So enquire to your lender about whether or not it provides this service. 2. You get education loans after you secure admission in a university Students believe that no lender would give them education loans if they are not admitted to a university. This is false. Some lenders offer education loans to students who have not yet got a seat at a university.

2. A university may ask you to show proof of funds to finalise your name for admission in your chosen course. Or you may need an education loan before your admission to any university. In such cases, some lenders—mostly NBFCs—will provide you proof of funds or a pre-admission loan. In short, you need not have a seat at a university to get an education loan. You can get it before admission as well. 3. The interest is levied on the loan as soon as it is sanctioned Many students believe that the interest clock starts ticking as soon as their education loans are sanctioned. This is not true. The interest is levied on the education loan only after it is disbursed and in that, only on the loan amount that is disbursed. For instance, if you take an education loan of Rs. 4 lakhs for your Bachelor in Engineering degree then the interest will not be levied upon the loan sanction. The interest will be levied on Rs. 1 lakh you pay as your first year tuition fee once the fee is disbursed. The next year, the lender will disburse the second sum of Rs. 1 lakh for your second year tuition fee and now the interest will be levied on the total sum of Rs. 2 lakhs you borrowed in two years. And so on for the next two years.

3. So, these are 3 myths about education loans that we have busted. We hope that after reading this article, you are armed with knowledge, and don’t find the process of getting an education loan daunting. We wish you all the best! Related Article: - 5 benefits of an education loan EMI calculator