Many students dream about getting into their dream colleges or going abroad for pursuing higher education. Maybe you are finally about to realise your dreams and enter your dream institution but the idea of paying hefty amounts for education may be off-putting.
A recourse that most students take is applying for a student loan. Student loans can be a great decision to fund your career growth. But there are some factors to be cognizant of before taking the plunge in order to ensure a tension-free future.
1) Improve Your Chances of Approval
Institutions that have a higher reputation often provide stellar job prospects and as such, banks are willing to offer lower interest rates for premier institutions like the IITs and IIMs.
Also, the more industry-ready the course you’re applying for, the likelier it is for you to get a loan approved with a reasonable interest rate. Your academic records also play a big role in the loan terms offered by the banks.
2) Keep Documents Handy
While requirements may vary across lenders, certain documents such as proof of residence and the letter of admission must be ready with you.
The bank will also investigate your credit history and thus you must keep your credit report handy. For loans exceeding 7 lakh, documentation on some collateral may have to be furnished.
3) Account for processing time
The time taken to process your loan may range all the way from 2 weeks to 2 months depending on several factors such as whether collateral is required, the type of collateral furnished, the loan amount etc.
Most of the time is spent on inspection protocols of the lending authority and thus one must factor in about 2 months of buffer time before they expect the disbursement to come through.
4) Eligibility And Margin Criteria
Loan options can vary greatly across both public and private sector banks and thus it is imperative to go through each available option and study their criteria for eligibility and finally land on the one that makes the most sense for you.
In case of higher loan requirements, a student will have to pay a margin amount to the lender upfront following which the loan amount will be disbursed.
There are various Government subsidies that one may apply for (if eligible). This can make a significant reduction in your repayment interest rate. While there are options galore for student loans, one must be absolutely sure that they can comfortably pay the loan back with the applicable interest once they graduate.
Be sure to double-check everything before final submission and you will be good to go!
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