There are numerous education loans these days. More and more lenders have entered into the fray and this has surely benefited students. Banks & non-banking financial companies have been forced to create better loan offerings to gain customers. However, this intense competition & an increased number of options have also made it very difficult to select the right loan offering. Students end-up confused and often make poor borrowing decisions.
Keeping this in mind, we are highlighting 5 important figures to compare when looking for education loans to help you find the right one for your needs. After all, finance is a game of numbers, right?
- The percentage of finance:
This is one of the first figures you want to look out for. Some banks, especially public sector banks, will not offer 100% financing. Though will cover a majority of the cost, they will require you to provide margin money. The percentage of margin money will increase with the loan amount you are opting for. However, non-banking financial institutes will almost never ask for margin money and will provide 100% financing.
Loan amounts on offer.
Again, some banks will restrict their education loans to around Rs. 10 lakh for studies in India and Rs. 20 lakh for foreign education. If you opt for a non-banking financial company, you should be able to tap loan amounts in access of Rs. 30-40 lakh with ease, as long as you are a good student or have a strong financial background.
List of approved colleges.
Every lender will have a list of approved colleges. If you plan on pursuing an education with these educational institutes, your application should go through much quicker. Usually, banks will have more recognized institutes and offer finance for traditional courses due to their excellent job prospects. On the other hand, NBFCs will offer finance for these courses as well other new-age and vocational courses.
Education loans have their charges; there are no two ways about it. However, no two lenders will have the same set of charges. This is why it so important to compare charges, fees & penalties of each lender before moving ahead. Remember to check out the more important ones such as prepayment penalties, if any, late payment charges, etc.
Though this is the most important figure when comparing education loans, it should be compared last. First, compare the options based on the above factors and then choose the loan that offers the best of all worlds at the least possible costs. Many students base their decision-making process solely on interest rates then they get disappointed because their selection might not deliver on the other factors.
These are some of the more important figure to bear in mind when comparing education loans. We hope that they guide on your search for the ideal students loan for your needs. For any further assistance, we advise you to consult with any one of the many lenders out there.
Good luck and all the best!