Taking education loans has opened new opportunities for students. All your study requirements get financed through these loans. You can use your savings for other expenses due to the relief these loans provide.
It is essential to get an affordable education loan interest rate to repay the loan comfortably. These loans get sanctioned on many grounds. You improve your lacking areas and negotiate with the lenders. Here are a few tips to help:
Shorten Loan tenure: The loan tenure you opt for affects the interest charged. The lengthy the loan tenure, the higher the interest rate. Hence, opt for a shorter loan duration if you want lower interest rates. Plan out your repayment in a way that is not long-term. It is a proactive step before applying that saves you from hefty loan cost.
Compare lenders: Lenders have varying education loan interest. You can compare them by using the education loan EMI calculator. It shows you their pre-set rate for assistance. You can use it multiple times and decide. This gives you an idea of the norms and specialised interest offers. Make sure to consider the loan processing charges as well.
Earning:You get a moratorium period from lenders for repayment. It refers to paying off the loan after course completion. You do this after six months to one year once done with your studies. It allows you ample time to get employed. However, it is advisable to earn while studying to negotiate a lower rate. It reflects your financial responsibility and repaying capacity to the lender.
Build excellent profile: Lenders decide on the loan amount, student loan interest rates, and monthly instalments based on your merit. Your academic performance, achievements, etc., showcase your potential. It also leads you to pass essential entrance exams to avail of the loan. Hence, build an attractive academic record to get the best offers from lenders.
Borrow wisely: It is essential to evaluate all the educational expenses before taking the loan. An education loan in India covers all costs involved with higher studies. However, it is at your discretion to opt for the loan amount. You can select the funding based on the expenses. So, wisely calculate the amount needed and avoid excessively borrowing.
Marginal contribution: These loans need you to contribute funds of at least 5%towards the loan. However, it is up to you to decide on the surplus amount. Naturally, a higher loan amount results in an increased interest rate. Therefore, it is best to reduce the borrowed amount by contributing a surplus margin. It leads to less amount borrowed and lower interest charged.