When looking to study in a prestigious institute in India or abroad, you might need to take an education loan to meet the increasing cost of higher education. There are many factors that will affect whether the education loan process is going to be easier for you or not.
In this article, we talk about some valuable tips that can help smooth the process of getting an education loan for students in India.
Getting an education loan, especially a big one for studying abroad, is not as simple as it might sound. The process of getting an education loan in India can be troublesome and lengthy. This is because a lender will consider everything from your credit history and the loan amount to the type of institution to which you’re planning to get admission.
Here’s everything you can do to ensure a smooth education loan process:
Choose a Reputable Institute
The more famous the institute, the better are your chances to get your education loan approved. This is because it is easier for the lender to trust a reputable institute and it will boost their confidence in your ability to pay back the loan after graduating from that institute.
Many students choose a foreign institute that costs less but is also less known or unheard of. This, however, might make the process of getting an education loan difficult or the lender might ask for high-value collateral or security against the loan.
If you are confused, simply ask your bank or lender for the list of universities and courses for which they can offer special benefits such as lower interest rates and/or no collateral.
Choose the Lender Carefully
Thanks to the growing number of private lenders and non-banking finance companies (NBFCs) in India, there is no shortage of options for someone looking to get a loan. That said, banks aren’t your only option to get an education loan for higher studies.
Trying your luck across multiple lenders, including banks, NBFCs and other private organisations, both Indian and international (for study abroad), will open more doors for you and increase the probability of getting a loan easily and quickly.
When selecting a lender, compare your options based on the rate of interest, loan terms, repayment period, and the need for collateral, among other things.
Maintain a Good Credit Score
Another thing that you would need to ensure an easy loan process is a good credit score. A credit score is decided based on your lending and repayment history. If you have ever taken out a loan or used credit cards, you may already have a credit score, which you can check for free online.
Having a good credit score means that you can be trusted to pay back your loans on time, which increases your chances of getting an education loan quickly.
Look for Alternatives
When looking to study in a prestigious institution, consider alternatives such as scholarships to afford the cost of education. Many institutions offer scholarships to students based on their academics and extracurricular activities.
See if you are eligible for any of this. Even if you can manage to get a partial scholarship from a respected organization such as the Tata Group, getting a loan for the rest of the amount should become much easier as the lender might be much more inclined to trust a scholarship holder as a candidate for an education loan.
Authored by CA Amit Gupta, MD, SAG Infotech
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