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A student loan is a great way to fulfil academic aspirations. It gives
you the opportunity to fund your own education. However, before you apply for
an education loan, it is necessary that you conduct a thorough research about
interest rates, secured, unsecured loans and so on. This article will shed
light on some of the important aspects of interest rates of education loans.
Selecting an education loan provider based only on interest rates is not
the best way to do it. Imagine this, you select a lender because you are
promised the lowest interest rates in the market, but you eventually realize
hidden costs and exorbitant fees that were never revealed to you. It will be a
frustrating experience. Hence, we always suggest our student community consider
other aspects of the education loan, too and ask as many questions as you can
to get crystal clear clarity. This will help you understand the process better
and, thus make an informed decision.
Research about the benefits you would receive if the education loan provider will offer secured/unsecured loans as per your preference, the margin money and so on. Also, find out if your education loan covers the holistic cost of education, which includes tuition fees, living expenses, equipment costs and all other education-related expenses. If you are planning to study abroad, ensure it covers your travel expenses as well.
The interest rate has two components – base rate and spread rate. The
base rate is pre-determined by the financial institutions and will vary
depending on the lender. The second component is floating in nature. This
component can change as per market changes. This is also known as variable
interest rate, as it can vary over the duration of the loan tenure.
The fixed component of the interest rate might be the same throughout.
But students or borrowers need to consider the floating component of the
interest rate too. The variable part may change during the loan period. This
means that your education loan interest rate can go up or come down. Therefore,
they could vary because they are dependent on the external economic conditions
and internal company policies.
The financial institutions will analyse these elements before giving you
an education loan.
Interest rate is an extremely crucial component to figure out your
Equated Monthly Instalments (EMI). To get an estimate of this number before
applying for an education loan, you can use an education loan EMI calculator.
It is a simple online tool that offers a convenient walk around the mental math
required to calculate the EMI of your loan. It is like a normal calculator, but
just online. You need to fill in some simple details about your loan and hit
the submit button. Within a fraction of a second, you should have the
indicative EMI amount of your loan on the screen before you. The three vital
stats that you need to feed in are – loan amount you plan to borrow, interest
rate and tenure of the loan.
We hope this information helps you make smart decisions. You can fulfil
your academic aspiration by opting for an education loan for higher studies.
We at Avanse are committed to providing
seamless and affordable education financing solutions. If you have any doubt or
queries, please feel free to share with us. We will be happy to assist you.
We always aim to offer you competitive interest rates on your Avanse Education loan.
The rate of interest on your loan is calculated as: Interest Rate = Avanse Base Rate +
Spread.
Our current Base Rate is 14.25% (WEF 01.05.2023).
The Spread is floating and is based on analysis of overall credit and course profiling.
This rate is subject to the terms and conditions of Avanse Financial Services Ltd.