Myth 1: I can get an education loan only if I offer collateral as a security
Fact:
Many financers offer education loans without collateral too. If you are specifically looking for collateral-free student loans, you need to select the education loan provider that offers unsecured loans. However, providing collateral as security can reduce the interest rates, so students prefer opting for secured loans.
Myth 2: An education loan only covers tuition fees
Fact:
A student loan should ideally cover all the expenses related to education. Niche education-focused financers usually cover the holistic cost of education in their student-centric financing solutions. It is best to discuss this with your loan provider before you take a loan. We, at Avanse, cover the holistic cost of education including, tuition fees, study material, equipment cost, travel expense and more.
Myth 3: EMIs begin soon after I take an education loan
Fact:
No, EMIs don’t start until the moratorium period is over. During the moratorium period, you are exempted from paying the EMIs. EMIs begin after the grace period is over, which usually ends a few months after graduation or after finding employment. At Avanse too, you can get an extended EMI repayment start date so that you can focus on your studies completely.
Myth 4: Only assets like home or land can be offered as a collateral
Fact:
For secured loans, both tangible and non-tangible properties can be provided as collateral. You can also consider fixed deposits, life insurance policies, government bonds, equities, etc. And you can offer both types of assets as collateral to get an educational loan in India. It is always advisable to discuss such things in detail with your financier for a hassle-free experience.
Myth 5: An education loan will be a burden
Fact:
Education loan is not a burden because it makes quality education accessible and affordable. Quality education holds the key to achieve all your goals, including academic excellence, lucrative career, professional goals, quality life, and so on. There is a world of difference between good debts and bad debts. For instance, investing your money in things that are depreciating in nature will burden you. Whereas, investing in quality education by taking a loan for education will earn you several benefits for the future.
Myth 6: You can’t take an education loan for up-skilling and re-skilling programs
Fact:
You can take education loans for several purposes, including up-skilling & re-skilling programs, undergraduate courses, graduate courses, vocational courses, online courses, overseas studies and also to study in India. Many financial institutions have identified the growing demand for executive courses and introduced financial solutions to cater to these segments as well.
Myth 7: Self-financing is better than taking an education loan
Fact:
Education loan is a prudent choice. Self-financing will exhaust your savings which can create a difficult situation during emergencies. If you take an education loan, your savings and investments can continue to be safe havens that you can turn to during contingencies.
Myth 8: Terms and conditions related to student loans remain the same for every student irrespective of the course
Fact:
Student applications are profiled by education loan financers based on coursework, study destination, future career prospects, academic scores, entrance exams scores and more, to arrive at final interest rates, disbursal amount, and other terms and conditions.
Myth 9: Since I am a student, an educational loan will have no impact on my credit score
Fact:
In fact, repaying your student loan will have a positive impact on your credit score. And healthy credit score indicates that you are a responsible and trustworthy borrower.
Myth 10: Education loan doesn’t need a co-borrower
Fact:
Education loan requires a co-applicant who will act as a guarantor. While an education loan gives you a chance to sponsor your education independently, the financer will need a co-applicant.
Loans for students open a new window of opportunity to achieve academic and professional success without exhausting the savings or depending on family or relatives. Do not let these myths stop you from achieving your goals. Avanse is dedicated to providing financial solutions to help you achieve these goals. With Avanse, you can avail education loans to study in India, to study overseas and executive loans too.
