More and more students are opting for education loans in India. These loans offer a simple solution to the always and ever increasing cost of education these days. More than this, they also offer attractive features and benefits that are designed around the specific needs of students. All this makes them the perfect way to cover the cost of your further education.
However, even with such positives, some students endure considerable financial stress with a student loan and quite often than not, this is caused by a number of mistakes on their part. This short article will try to alleviate any such financial turbulence from your borrowing experience by discussing some common mistakes students make with their educational loans. Hopefully this will make sure you steer clear of such blunders.
1. Not comparing options.
Education loans in India are a dime a dozen. Most recognized banks offer loans and there also a number of non-banking financial institutes that also offer innovative finance solutions. However, some students fail to make a comprehensive market survey and just go with a loan that has the lowest interest rate. This move to save money could prove costly.
What you should do is, visit as many aggregator sites, speak to as many lenders as possible and read as many reviews as possible. This will give you a clear big picture and help you find a loan offering that matches your needs and ticks all of your boxes.
2. Not using education loan calculators.
Education loan calculators are very useful, must-use online tools. They ensure you are well-prepared to handle your debt and make all the right decisions leading-up to your application process. However, only a handful of students actually use these tools, some even disregard them as useless. On the contrary, these tools help you apply for the right loan amount, ensure you do no lose your processing fees and help you create strong repayment plans.
3. Not doing your homework about education loans in India.
Lack of awareness can lead to a number of problems. For example, most students think they will 100% financing without realizing that there are numerous terms and conditions to this promise. In fact, most lenders will provide 100% financing without any strings attached only if you are stellar student with a good financial backing. If you only one of these, you might have to pay higher interest rates and if you aren’t either of these, you might be require to provide collateral to secure 100% financing.
4. Not paying during the moratorium period.
This is another mistake that proves costly for a number of students. Though you do not have to make any payments, doing so will ensure your lender conveniently adds simply interest for every year you do not make payments to your principal amount. So when you do start repaying the loan, you will find that you now have to pay a lot more than you would have earlier. You can avoid this by making interest payments within the moratorium period. This should also get your lowered rates.
These are some of the more common mistakes students make with education loans in India. Hopefully, after reading about them, you will avoid making such errors. Good luck and study hard!