Taking an education loan is one of the first significant transactions for a lot of students. Given the rise in the cost of education in current times, many find it wise to take a loan for pursuing their studies further. However, it can be confusing to follow through the process of applying for a loan as it is your first time.

Nonetheless, to help you have a hassle-free application process, here’s what to do and avoid when taking education loans –

Do’s

1. Be thorough about the details

It is essential to understand the various parameters of your loan like the interest rate, EMI, moratorium period, documents required, etc. Some lenders require you to give collateral while taking the loan, and it is best to inquire about the same before taking on the application process.  It is also recommended to fill the education loan application form with accurate information about you as many lenders cross-check the details, and if they find any discrepancies in the same, your loan will get rejected.

2. Be prepared with a detailed budget plan

The majority of lenders in the market ask you for a detailed budget plan for the requested loan amount. The detailed budget plan usually includes the university’s tuition fees, accommodation expenses, and other costs that you need financial help with. You will need to present the comprehensive budget plan when you meet the loan provider in person.

Don’ts

1. Not researching the course and its employment aspects

Many students take education loans to pursue their studies further abroad; however, their primary focus is on settling there and experience their standard of living. Though this goal is not necessarily wrong, not paying attention to the course you enrol in and carelessly taking it just to go to a new country is not right. You miss out on many opportunities and face the risk of not getting the right job that can help you repay the loan.  Thus, it is better to research the course and its employment aspects in the near future. This will help you repay the loan and get a good credit score and be a great asset in the long run of your career.

2. Applying for a higher loan amount than required

A loan is a form of debt which means the borrowed money has to be paid back with interest. Thus, students need to understand the liability they expose themselves to and apply for a loan amount that is enough for the expenses that they can not manage on their own. This not only helps you repay the loan without any defaults but also helps you get a good credit score that can be further used for your borrowing needs in the future. Students usually only include the tuition fees and the accommodation expenses at max in the loan amount.

 

We hope this article has equipped you with the right information that will prove to be helpful when you apply for an education loan.