Step1 Examine if you can afford an education loan Only if you are confident that you can repay the education loan, go for one. If you are taking up the course and planning to repay the loan, check essential details such as placement record of the course and entry-level salaries.
Step 2 Shortlist lenders You can start the short listing process by checking the eligibility of your institution and course for education loan by different banks. Next, check the cost heads covered under the loan by the lender.
Step 3 Check eligibility for the loan amount If you have opted for a course in India, the upper limit for the loan is Rs 10 lakh. This goes up to Rs 20 lakh for overseas education. Select the lender which is offering you the loan amount which you need, covering the cost heads and at the lowest interest rate.
Step 4 Decide on moratorium and interest servicing Moratorium is a period typically after the completion of the course during which the lender does not ask you to pay the interest on the loan. It is added to your loan amount. Find out the moratorium period which is typically 6 months to 1 year. It helps if your parents or you can pay at least the interest during the study period to keep the loan amount manageable.
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