Education is the best investment for everyone as it gives back more than it’s cost in most of cases. But to get education sometimes finance poses an issue. In today’s age when someone’s focus is to get best education and if candidate is eligible and worthy then enough financial options are available.
Various private and public sector banks are supporting education of interested candidates through their Education loan schemes. Process is almost similar for financial institutions which include key components as Identification, Loan Eligibility and Terms, disbursement and Repayment.
Let’s see an education loan process.
Course Finalization and Admission confirmation: First and Foremost, thing is to decide what course student want to pursue. Post which clearing the admission formalities with institute is next step towards securing a education and finances for it.
Application: Once the Course (MBA, PGDM, Engineering courses, B.Tech, M.tech. Master of Sciences MS. Or any other course) for which you want to avail the education loan, is finalized the student must apply for an education loan with chosen financing institute. Institute should be chosen basis of lowest interest rates, minimum documentation, minimum charges, and Smooth transaction.
Approval: Finance Institute will check family income of education loan applicant and will look for safe repayment assured which can be in form “consignee “Or guarantor or some financing institutes may not ask for it after checking family background or depending on their internal eligibility criteria.
Disbursement: Once Financing Institute is satisfied for repayment of education loan they approve disbursement of amount. Amount of education loan is dependant of Tuition Fee, Lodging and boarding expenses, Books and Equipment required for course and generally financing institute will have all these expenses in consideration for disbursal. Disbursal is made to education institutes accounts for tuition and related fees and for other expenses amount will be disbursed to Student Account. Sometime disbursement happens in parts (as per requirement) if course duration is longer.
Repayment: After Disbursement student can study for the full term of the course and most education loan providing banks will give them EMI (Equated Monthly Instalment) Holiday for 12 month from course completion date. This Gives Student a great Ease in repayment as they get chance to find proper job before starting their education loan repayment.
Benefits of Education Loan vs Personal Loan : Education loans include many additional benefits like examination fees ,caution money, library charges, building deposits, laboratory fees , hostel fees, money for buying books, instruments and uniform, travel expenses for studies abroad, etc. apart from tuition fees so the amount calculation for the purpose of education is much precise. Where in Personal loan case people often calculate Tuition Fee + Lumpsum Assumed amount for other expenses which may result in further requirement of finances.
Low interest rate: Usually Education loans are offered at lower interest rates compared to Personal loans which makes it extremely cheaper option for financing education.
Easy repayment: One of the many great advantage of education loan is that the loan amount need not be repaid immediately. The repayment tenure can be extended up to 5 to 7 years after the completion of the course. This makes it easy for repayment.
I hope this clarifies your doubts .
Good Luck .