Things to know about education loan before applying

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know about education loan before applying

A complete and successful life necessitates a high-quality education. For many, it is the equivalent of graduating from a prestigious university. However, the cost of schooling is continuously rising. In truth, the price of attending a reputable university is already reasonably costly. Parents who wish to provide their children with the most excellent education possible invest their money in mutual funds (MFs), fixed deposits (FDs), unit-linked insurance plans (ULIPs), and other long-term investments with this in mind.

According to surveys, education loans are rising at 15% each year on average. In 15 years, the cost of an MBA is expected to increase from Rs 2.5 lakh to Rs 20 lakh. So, if a couple saves Rs 2,000 per month for 15 years at a rate of 12%, they will have saved almost Rs 9.5 lakh. It includes the basic course fee and supplementary costs such as (college) housing, exams, and other miscellaneous expenses. The primary borrower is a student. A co-applicant can be a parent, spouse, or sibling.

Collateral is required for loan financing.

Banks can finance up to 100% of the loan depending on the amount. There is currently no margin money required for loans up to Rs 4 lakh. To study in India, the candidate must provide 5% of the funds necessary. The required buffer money for international study, on the other hand, rises to 15%. Banks also need collateral for loans beyond Rs 7.5 lakh. Currently, banks do not require any kind of collateral.

  • The rate of interest

To set an interest rate, banks utilize the Marginal Cost of Funds based on Lending Rate (MCLR) plus a spread. The additional spread is currently in the 1.35-3 percent range (as of 2017).

  • Repayment

The student is responsible for repaying the loan. In most cases, payments begin when the course is completed. Some banks even provide you a six-month grace period after you get a job or a year after you finish your studies before you have to pay back your loan. 

The bank charges an introductory interest rate on loans during the repayment period. The student’s equated monthly installment (EMI) load for future repayments is reduced by paying simple interest during the course time.

  • Precautions

When applying for a loan, keep an eye out for bank fees such as processing fees, pre-payment fees, late EMI payment fees, etc. Most lenders charge a processing fee of 0.15 percent of the total loan amount.

What is an education loan EMI calculator?

The school loan EMI Calculator will assist you in determining how much EMI you will be required to pay on your loan, allowing you to manage your budget better and ensure that you take a loan that you can afford to repay without stress. It is essential to know about education loan EMI calculators. To calculate, simply input the current interest rate, loan amount, and repayment period in the appropriate areas.

Why do you need to use EMI Calculator?

  • Extremely Quick- Calculate your education loan EMIs in seconds for your chosen tenure and interest rate.
  • The foundation of Simple-Calculation is the availability of four plain and simply accessible quantities.
  • Experiment with different tenures and interest rates to see if you can develop a combination that works best for you.
  • 100% Free- This easy-to-use college loan calculator is free to use.

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