The importance of education in India

India has established itself as one of the world’s leading economic and technological hub. Hence, there are a lot of companies which are keen to invest and thus rake in the bucks. However, these MNCs (multi-national companies) only want to hire the people who are well-qualified and educated. Thus, the ever-increasing demand for a degree from a highly established institute has caused the study expenses to go through the roof. Hence, it has become almost impossible for the parents to support their child’s education even after exhausting their savings; for which they have worked throughout their life. But unlike the earlier times, there are a number of banks and NBFCs (non-banking financial companies) which offer education loan to assist students in their studies.

The study loans have proved to be a boon for the meritorious students lacking the financial capability. These loans take care of all the different expenses induced by the students during their educational course. The expenses which are taken care off by these loans include the college fees, tuition fees, travel expenses, hostel fees, and also the miscellaneous expenses incurred by the students. Thus, the students can take care of their own study expenses with the help of education loans. The loans offered by these banks and NBFCs (non-banking financial companies) are much lower when compared with the interest rates offered by the traditional financiers. The traditional financiers in the past would charge exorbitant interest rates and would ask for high collateral; thus making them a bad choice.

Importance of opting for study loans are:

·         These loans are offered at lower interest rates for meritorious students and for women; in order to provide them with equal chances as their male peers.

·         The students can acquire education loans for pursuing a course of their choice in both domestic as well as foreign universities. The various specialization courses offered by them are in engineering, medicine, architecture, culinary, literature and fine arts, etc.

·         The students can make use of co-borrower facility and can acquire a higher loan amount. However, the co-signer will be the primary debtor and he or she should be an earning citizen of India with a bank account in any Indian bank; with a cheque writing facility.

·         The easy repayment options with longer tenures have presented students with the opportunity to plan out their future repayments in advance and thus live a stress-free life. Thus, education loans are tailor-made in order to cater to the need of the people.

A few tips related to study loans:

·         Tenure: There are a lot of people who take loans with longer tenure because they feel that EMIs (equated monthly installments) are low. However, in reality, they are compensating on their interest rates in order to procure longer tenure loans. This is because, the longer the tenure period, the higher the interest rates on that loan. Thus, if one is earning well then he or she must choose to opt for a loan with a shorter tenure period.

Moratorium period: This is the time period which is a sort of levy given by the banks to the students in order to find a job. This period for an education loan may be anywhere between 6 months to a year after the course completion. However, the interest rates on the outstanding amount are still piling up, hence, it is best to pay off those interest rates while one still can.