Loans Students
Education is more expensive now, than ever before. The rate at which the cost of education is rising beats inflation by a fair margin. Hence a working class parent would find it increasingly difficult to fund their child's higher education. The easiest answer to this dilemma is an education loan. The amount does not unduly burden either the parent or the student, as parents do not have to dip into their savings and loans students need not worry about repayment until their studies are over and they have started earning. Thus the co-relation between earnings by the educated individual (one who has completed his education) and the repayment schedule is one of the major plus points that augurs well for taking an education loan. On the other hand the onus is on the employment the student is going to attain upon completion of his or her education. If the student fails to land a job or if he or she gets a low paying one then the repayment schedule can prove to be a big obstacle to cross at an early stage in life. Even so the figures show that education loans are here to stay as students across the world are availing this facility in ever increasing numbers.
Once education to specified universities or into specified courses is achieved by an individual, the process of applying for a loan can be put in motion. The loan process may vary from one financial institution to the next and it is always good to shop around to get the best available deal. Many websites such as studentdoc.com and hindustanlink.com help you to compare deals on offer and help you to select one that is tailor made to suit your needs. The two most important factors to be kept in mind while applying for a loans students are the margin money to be put up (also called down payment) because it is an immediate expense and the rate of interest which translates to interest costs which will be a continuous future liability.
It is advisable to match your expected salary when you graduate with your repayment schedule to make sure you are not taking up more debt than you can chew. This can be done by researching the current average salaries being offered to people who graduate from the course you are going to take up. This is vital because debt very quickly eats into your funds and can clean you out in a hurry. It is also advisable to keep all your documents and paperwork in order. Make sure you have all the documents required by the bank in question when approaching them.
Many
banks insist on a college tuition fee structure and a confirmation
of admission. It is always good to apply for the loan in your
own name, rather than making your parents liable for repayment.
This will give you a greater drive to study and work harder. You
must consider it as an investment in yourself. When applying for
a loan it is also a good policy to factor in money you can make
while working part-time during the period of your education. This
will help lighten your future payments and help as a buffer in
case you do not immediately land a job upon graduation.
Repayment
of the loan usually starts immediately after you finish your education
but in some cases institutions may give you an allowance for a
further period of 6 months to a year post graduation. The interest
that has accumulated during your period of study will be added
to the original amount of your loan and be converted into fixed
periodic installments (usually monthly) that will have to be repaid
over a pre-decided period of time. The rates of interest vary
for smaller and larger amounts of money and for inland or overseas
education. Larger amounts and foreign education command higher
interest rates.
loans students:
To conduct a cost- benefit analysis of your education loan is not easy as you have to assume and forecast the benefits while in full knowledge of the costs. Forecasts may not always hold good but it always safer to err on the side of caution. Thus it is better to assume prudent amounts as post-qualification salary and consider the same in your analysis. Another factor to consider is what the loans allow you to do with them- some loans are strictly only for tuition fee while others cover varied expenses from books and stationary to hostel accommodation. Here too it is better to study the benefits of having a more flexible loan than one that allows you to only fund specific expenditure.
In the case of most loans collateral will also have to be furnished. Make sure you consider this in your analysis as well. Make sure you go through all the fine print in the loan as some banks do not allow fast track payments and hence you could be saddled with the loan for a longer period even if you later have the means to square it off in a shorter period. Some banks also offer you the flexible interest option which means you pay the prevailing market rate of interest as your interest cost. This is good if interest rates are falling but if they are on the rise then it is better to settle for a fixed interest rate. If you do not expect to repay large amounts of money during the initial period after your graduation then it is better to opt for a plan that allows you to pay smaller installments at the start of your repayment schedule and then graduate to larger ones at a later stage of your repayment rather than going in for equated monthly installments which remain the same over the your entire repayment schedule.
To conclude it has never been easier to get a student loan than in recent times. This is because their scope has increased to include a wide range of subject and the number of financial institutions doling out these loans is on the rise too. However great care must be taken to study the pros and cons of each loan and select one that you will not later regret. Thus before taking up your course of study it is best to devout a good deal of time to study the loansstudents that you are going to take and only after you feel comfortable with your cost benefit analysis go ahead with taking it.
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