In India, higher education can cost up to several lakhs a year. Becoming a doctor or engineer is still an unattainable goal for many students and their parents from lower-income families. Additionally, the demand and skyrocketing costs are making it even more difficult for them to obtain a good education.
The biggest concern is securing a seat, which is very limited in government colleges as competition is very high. India is going through a phase where education beyond the secondary level is essentially unaffordable for most working people, and even school education involves costs for families that can be very high.
So getting into a dream college (maybe government, maybe private) for higher education has become a pipe dream for most students due to the spiralling cost of education.
Usually, most parents delve into their savings or liquidate assets like gold or property to pay for their child’s education. But not many can afford to do that. To avoid that burden, they are considering taking out an education loan – a major source of funding for students from low-income families – to fund their child’s higher studies. As a result, the demand for education loans has also increased in recent times.
According to data from CRIF High Mark, a credit bureau, education loan companies (banks and non-bank lenders) disbursed Rs 11,000 crore loans in the 12 months through September 2020. The majority of the disbursements occurred during the pandemic period, with more than 3 lakh new borrowers signing up for loans between March and October 2020.
If getting access to quality education is your goal then get an education loan in India without collateral from a bank, a private lender or a Non-Banking Financial Company.
What is an Education Loan without Collateral?
A loan without collateral is where the borrower is not required to pledge specific valuables or property as security to the lender against the borrowed amount. Instead, they have to meet certain criteria set by the lending institution like course, university etc.
Even if your parents have financial constraints, educational loans allow you to study in India for a course of your choosing. Several banks and non-bank financial institutions (NBFCs) offer education loans up to a certain amount without requiring collateral or security. This is beneficial for students like you who may be limited in their ability to provide such collaterals.
Also Read: 5 Best Tips To Get The Best Education Loan Interest Rate In India
Benefits of taking a loan for higher education
The biggest benefit of an education loan is the funds that are easily available to you. Other advantages that will make you want to submit your loan application faster are listed below:
Suppose Roop Kaur, 24, has secured admission into an MBA course at a prestigious institution but is unsure about the costs. The fees are quite high, and she does not want to burden her parents. She is thinking about taking out an education loan, but she is concerned about incurring debt. Will she be required to put up collateral for the loan? How will she repay the loan till she gets a job and starts earning? Read on to know more if you, like Roop, are planning to avail an education loan.
Continue your education without financial stress
A post-graduate degree from a prestigious institution can serve as a solid foundation for a thriving career and life but given the high costs and rising expenses, it may be difficult for you to fund your own higher education. This is where an education loan can help. Use it wisely to achieve your goals without financial stress. Not only are education loans available for higher education, but they are also available for graduate-level studies.
Education loan covers almost everything
Covers varied needs: Education loans cover both academic and non-academic fees such as tuition fees and living expenses including hostel fees, exam fees, library charges, lab fees etc. The loan also covers the cost of books and travel.
It is Cost-effective
Education loans typically have lower interest rates than other types of loans. Find loans with the best interest rates to make repayment easier, as well as preferential rates for top-ranked universities and institutes. To make loan repayment as simple as possible, lenders provide a variety of collateral and co-borrower options.
Get a loan easily
Usually, collateral is not required for a loan up to Rs 5 lakh. In some cases, if you get admission into a reputed institution, like one of the IIMs, banks may not ask for collateral even for loans of higher amounts. If collateral is required, it can be in the form of property or a fixed deposit, among other things.
Lenders typically charge for the transaction processing and the loan can take up to two weeks to process. Depending on the fee structure and requirements, lenders may disburse the loan amount at once or in installments, either to the borrower or directly to the institution.
Achieve your dream of studying at a premier University
Dream big and choose a customized loan! People of all classes can get an education loan irrespective of their source of income. If you are seeking admission to a prestigious university, you will probably need to take out a loan. While the score is essential for admission to any reputed university, it can also help you when applying for an education loan.
Helps build financial discipline
An education loan can help you build financial discipline. Timely and regular repayment of the loan is also a way of building a good credit score, which can help you or your parent get a better deal if you need to take out formal credit later on in life, such as a credit card, auto loan, home loan, etc
What do you need to be eligible for an education loan?
Most loan providers require that the applicant be a resident of India, and students pursuing full-time courses must have a co-applicant with good credit. Furthermore, some banks have criteria based on age, field of study, and institution type.
Before finalising your course of study, you should have a good understanding and knowledge of the minimum salary that you can expect after getting the degree.
Considering that an education loan is one of the first major financial decisions that a person makes, one that will last for nearly six to seven years into their working lives, as a borrower, you must be aware of the course fees, documents required, scholarships, interest on any important aspects of the loan, and any processing fee associated with the loan.
Finally, you should be prepared to repay the loan amount every month, on time. Otherwise, you run the risk of your loan eventually going into default, which has major repercussions.
Varthana feels that having a higher education is a very important factor in the economic development of any country. And, a student should never compromise the quality of education because of financial constraints. Apply now if you don’t want to miss out on your higher education dream.