Benefits of Student Education Loan for Students and Parents

Benefits of a Student Education Loan in India for Students and Parents

Home - Student loan - Benefits of a Student Education Loan in India for Students and Parents
Benefits of a student education loan

With ever-increasing competition and soaring inflation, most students who wish to study at prominent Indian universities now need to take out a student education loan. Earlier, most parents were accustomed to liquidating assets like gold, fixed deposits, and property to finance their child’s education.

Parents have now begun to accept the paradigm shift of using a student education loan to pay for their children’s education.

This is because both students and parents are now aware of the many benefits that a student education loan may give. They understand that an education loan is preferable over a personal loan for education.

Why Take Student Education Loan?

What is the best way to finance higher education?

Almost all Indian parents consider their children’s education to be a top priority now. Using family funds, borrowing from friends and relatives, selling assets or taking out an education loan are all typical ways to support higher education. Previously, it was assumed that only those in the middle-income group used education/student education loans to support their education. 

With the advantages of an education loan coming to light and specialists giving doorstep service, many affluent families are now choosing an education loan and taking advantage of specific benefits like:

  • Students get opportunity to take financial responsibilities
  • Preserving their family savings
  • Building a good credit history
  • Best repayment options
  • A wide range of expenses covered
  • No loan burden
  • Pursuing dream course in college/university of their choice

Hence, student education loans have clear advantages here.                                                                                                                                                       Also read: 7 advantages of taking a loan for higher education

Who should opt for a student education loan and why?

Anyone can apply for education loans because quality education is crucial for every student.

Any student can get an education loan with the help of their parents or guardians as co-applicants.

Benefits of Student Education Loans

  • Applicable for all: Any student can apply for a student education loan. Even the unprivileged sections of society can avail student education loans.
  • Applicable for almost all courses: Graduation, post-graduation, certificate courses, and vocational courses in India fall under this section.
  • Easily available: Education loans are readily available, easy to obtain and they are a priority product in all banks as per the RBI’s guidelines.
  • Varied loan amounts: A number of Banks or NBFCs can offer loans anywhere between Rs.40000 and Rs.10 lakh for studying in India. However, the size of the loan depends on the course, college and financial institutions applied for. 
  • Helps in completion of education: With inflation and fluctuating costs, the cost of education is rising. Student education loans are necessary to avoid academic setbacks.
  • Benefits: Education loans come with a slew of extra perks, like it covers library fees, laboratory fees, tuition, examination costs, hostel fees, money for books, instruments, and uniform, and travel expenses, etc.
  • Easy repayment: Also, another great advantage of student education loans is that the loan amount supports easy repayment options. If you are still thinking about how to get an education loan after 12th, read all about Education Loan in India here.

Conditions to apply for student education loans in India

When applying for a loan, there are a few basic requirements that must be met. The following are the conditions:

  • The rate of interest is determined by a variety of criteria, including the loan amount requested, the type of student loan chosen, the loan tenure chosen, the student/co-borrower’s future cash inflow, loan repayment history, and so on.
  • There must be a co-applicant, who can be either a parent or a guardian.
  • The maximum loan amount for a student loan can be determined and made available based on the course, type of loan, eligibility conditions and creditworthiness, as well as loan payback history.
  • Loan payment tenure period is determined by the loan amount, course duration, and EMI amount, among other factors.
  • The student’s guardian or parent will have to act as co-borrower on the student loan and will be required to provide necessary KYC and income-proof documents to avail the student loan.
  • Over the duration of the student education loan’s term, the loan amount will be repaid to the lender in Easy Monthly Installments (EMIs). The Electronic National Automated Clearing House (e-NACH) or Post-Dated Cheques can be used to repay the student loan (PDCs).
  • In the case of non-repayment, the co-borrower’s credit history gets affected.

Important tips before applying for student education loan

  • Before taking out a student education loan, you should carefully evaluate your family’s financial capacities and liabilities.
  • Before choosing a bank, you should thoroughly research and comprehend the conditions for applying to various lenders.
  • Once you’ve decided on a lender, make sure to read all of the terms and conditions as well as the checklists on the loan application form.
  • You should choose a lender which provides the facility for extension of the repayment tenure.
  • The loan amount generally goes directly to the institution where you want to apply, at the beginning of your class. Hence, it should cover all the benefits and services offered so that you can have a seamless college experience.

Varthana education loans are designed to help you finance your education and make that big leap. While providing the best education is a priority, only a few parents may be able to achieve this goal. In such cases, a Varthana student education loan may be necessary. Whether you are planning to study in a small or reputed institute in India, a student education loan from Varthana will help you finance your education with the least amount of difficulty. Apply now

Leave A Comment