Your guide on how to pay for college and how college fees works
Posted In education loan On April 15, 2020
College fees are skyrocketing each year along with the rising need for higher education in this fast-changing world. Although the cost of college education tends out to be a serious amount, there are various ways to pay for college including public and private education loans, grants, scholarships, working while in college etc.
Apart from the college fees, there are various other expenses to take care during the admission process. Boarding fees are also one of the significant expenses that may need to cover under your college education. Likewise, there are various other college expenses that you may also need to factor in your college payment plans.
You are not only required to provide tuition fees but almost the entire expense of education. These expenses include - Tuition and hostel expenses, Library, exam, lab fees, Cost of uniform, books, travel expenses etc.
College charges the cost of attendance in the name of tuition fees.
The first step is to get an idea of the amount of tuition fee you have to pay. This helps you get a clear understanding of the total amount you need to borrow. Evaluate all the finances you would require from College fees, travel expenses, to application fees and living expenses.
When do you pay for college tuition?
College fees should be paid before attending or while attending college. Most colleges ask for a portion of the tuition to be paid as a token amount upfront to register your admission. Most colleges require you to pay the fees at the beginning of each semester.
How do college payment plans work?
Most colleges have financial partners to offer loan assistance to students looking for financial aid. These financial institutions also provide flexible repayment plans to make it easier to afford a college education.
Options to pay for college
If your parents have enough financial skin in the game, then you can ask them to fund your college. You can use your personal savings and financial help from parents or other relatives But, in case, you don't want to worry your parents for your college education then there are various ways to secure your college dream on your own. You can take an education loan that's designed specifically to help students realise college education. There are several reliable scholarships that can cover a portion of your college fees, so keep a check and try to fill the application before the deadline.
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 if you or your cosigner has a bad credit score. On the other hand, if you’re looking for an unsecured loan, Private banks & NBFCs might be a better option for you. They also provide customisable repayment plans but charge a higher rate of interest than nationalised banks.
Public & Private Banks/NBFCs
Most of the public banks in India offer loans to students looking for higher education. Public banks are known for their attractive rates and repayment flexibility. Most private banks cover 80-85% of the loan amount leaving 15-20% margin money. The loan shall be repaid in a tenure of 5 -15 years after commencement of repayment period. NBFCs do not have a cap on the loan amount borrowed for a secured loan i.e., if the collateral is provided, whereas, loan amount up to 20-25 lacs can be availed without providing collateral. Even though interest rates of NBFCs are higher, they are much more relaxed and flexible on loan procurement and offer loans. They do not leave any margin and cover 100% of the loan amount.