An education loan is very helpful to make up for the funds needed for college. But taking an education loan has its own intricacies. This article tackles some of the queries that you may be having while looking for an education loan. Here we have answered 9 common questions that students search on Google about education loan.
1. Who is eligible for education loan?
The required criteria for an education loan is stated below -
i. The applicant should be Indian.
ii. He should have a cosigner.
iii. For Indian Universities - He should have confirmed admission in a college/institution.
For Foreign Universities - He should have a confirmed admission or a valid scorecard.
2. Can I get an education loan without security?
Yes, you can get an education loan without providing security. Most of the nationalised banks require collateral/security for loans above 7.5 lakh, whereas NBFCs (Non-Banking Financial Companies) do provide unsecured education loans above 7.5 lakh.
3. Shall I take financial help from parents or apply for an education loan?
It is more advisable to take a student loan instead of asking for financial help from your parents because you won’t be taking away a huge part of their savings for your education. Moreover, taking a student loan will be a huge step towards financial responsibility which will further help you to develop your credit score.
4. How is education loan interest calculated?
The interest rate depends on various factors like the college, course, country if the collateral is provided and the income of the co-applicant.
5. Which bank is the best for education loan?
If you’re looking for a secured education loan, then nationalised banks may be the best option for you. But they have a rigorous shortlisting procedure which is a big concerning factor for underprivileged students. On the other hand, if you’re looking for an unsecured loan, NBFCs might be the best option for you. They also provide customisable repayment options but charge a higher rate of interest than nationalised banks. Moreover, if you’re looking for an education loan based on your merit rather than your parental credit score. Credenc is the best option for you. Credenc offers education loans based on your merit rather than your parental credit history.
6. How do I calculate my education loan EMI?
Education loan EMI is simply the combination of principal and interest rate. The amount you borrow under an education loan is repaid in the form of EMIs. Thus, it is essential to calculate your EMI before taking a loan so as to get an idea of how much amount of money you have to pay monthly basis.
So, if you’re planning to take an education loan you can calculate your EMIs online here.
7. In how much time do I have to repay the loan?
Your repayment tenure depends on the loan amount and the repayment policy of your loan. Mostly, education loans have a tenure bracket of 7-15 years. The longer you choose to extend your repayment tenure, the lesser would be your EMIS while you will accrue a larger amount of interest.
8. What are the things required for education loan?
You can apply for an education loan by just submitting your application along with the right documents. In case of a secured loan, you are also required to submit the concerned documents for collateral.
9. Can I get an education loan irrespective of parental credit score?
Yes, you can avail an education loan irrespective of parental credit score through Credenc. Credenc takes into consideration your employability aka future earning potential to deliver funds for your college. Just in 3 easy steps, get access to a pre-approved loan offer for your college -
i. Take an assessment that generates your employability report.
ii Get your pre-approved loan offer based on your employability score.
iii. Get your pre-approved loan letter right away.