Quality education is essential for academic, personal, and professional development. However, the cost of education is increasing by 10-12% per year. In such a scenario, an education loan is a prudent choice to finance your education independently without depending on your parents. When you apply for a student loan for the first time, you can be confused by many existing myths. Here are some benefits of student loans and facts to debunk the myths.

Key Highlights:

• About study loan benefits
  • Dream university
  • Atma Nirbhar
  • Healthy credit score
• Some myths and facts about student loans

About study loan benefits

Higher education can be an expensive affair. Therefore, students turn to education loans, which bridge the gap between them and their aspirations. Education loans are not free, and students can repay these loans with easy EMIs that spread over a few years. Here are some advantages of taking an education loan:

Dream university

You no longer have to settle for a lesser-popular college. With an education loan, you will be able to secure a seat in a university of your choice. You can access top-notch education that can develop academic rigor and help you build a promising career.

Atma Nirbhar

With an education loan, you have the opportunity to finance your education independently without depending on your parents. Besides, you don’t have to liquidate family savings either, so you can use them in case of emergencies.

Healthy credit score

Repaying your education loan will enhance your creditworthiness. A healthy credit score can unlock several benefits when you opt for other financial products such as a car loan, home loan, or credit card.

Also Read: Everything You Must Know About A Student Loan To Study In The UK

Some myths and facts about student loans

Myth: Education loans are available only for mainstream courses.
Fact: You can opt for a student loan for a broad range of courses, from mainstream courses such as STEM and MBA to non-conventional study programmes such as Sound Engineering and Music Production. In fact, education loans are available for vocational, skilling, upskilling, and reskilling courses, too.

Myth: Education loans can only be used to fund tuition fees.
Fact: At Avanse Financial Services, we offer study loans that cover the holistic cost of education, including tuition fees, traveling costs, accommodation costs, living expenses, cost of learning devices, and other education-related expenses.

Myth: Education loans are offered if students offer assets as collateral.
Fact: Both secured (with collateral) and unsecured (without collateral) education loans are available. Depending on your financial requirements and preferences, you can choose between the two.

Myth: No need to repay education loan during the course.
Fact: Most student loans include a moratorium period where students are exempt from paying the EMIs. However, it is recommended to make small contributions in the form of simple interest (SI)/partial interest (PI) during the moratorium period. Since this is not an interest-free period, the interest begins to accrue from day one. Also, paying SI/PI will instill financially prudent habits. After the moratorium period is over, you can repay your student loan in easy EMIs.

Myth: Education loan with a low interest rate is the best one.
Fact: Most students make the common mistake of selecting a study loan based on the low interest rates. However, when planning to opt for an education loan, you have to conduct thorough research to know all the details about an education loan. You need to find information about education loans, such as turnaround time, customer service, costs covered, features, and benefits extended to you, among other factors.

Myth: Everyone is eligible for an education loan.
Fact: Although education loans are specifically designed for students, it is necessary to meet the eligibility requirements of your chosen financial institution. Here are some basic criteria:

• For student:
  • The student should be an Indian citizen and 18 or older.
  • Confirmed admission before the final disbursal.
  • Should have a co-borrower who earns in India.
• For co-applicant:
  • The co-applicant must be an Indian citizen and should be a parent, legal guardian, sibling, or other blood relative.
  • Must have a bank account in India that allows the co-applicant to sign cheques.
  • Must be the primary debtor.
  • Must provide proof of relationship.

Also, please remember that when you apply for an education loan, your student profile will be thoroughly evaluated to determine your employability potential. Therefore, your parameters include academic scores, entrance exam scores, the pedigree of your university, and continuity in your education, to name a few. If you tick all the boxes, your student loan will be approved.

Also Read: What you Must Know About Education Loans This World Student’s Day

So, this is all about education loans and related myths and facts. At Avanse Financial Services, we offer student loans with several benefits such as 100% finance, quick sanctions, and flexible repayment options. Please connect with us to know more about student loan interest rates and other interesting details.