For many students, an education loan came into their lives as a real blessing. Especially for those who had given up on their further study dreams until the found hope in the form of a student loan. Now you might say that even a personal loan or a loan against property can provide people the same amount of financing, so why give so much credit to only student loans?
Well, study loans are very different from other forms of finance and provide young aspirants with some very helpful features that make pursuing further studies extremely easy. This article will highlight some of these features to further drive home the helpfulness of an educational loan and highlight why such loan are better for students than other forms of financing.
1. Moratorium period.
Can you name one other type of loan offering that would allow students to differ from making payments until 6 months after they’ve finished their course or found a job? You might not find a single one, besides an education loan of course, because these are the only type of loans that come with a moratorium period. This is like a grace period wherein borrowers need not have to make any repayments until they are financial fit to do so.
2. Performance based benefits.
Yes, that’s right! Education loans rewards deserving student with lower interest rates and higher loan amounts. This is a feature no personal loan will come bundled with. So if you have a stellar academic record or have scored amazingly in your entrance exams, remember to ask your lender for preferential rates or better loan offerings.
3. Covers all education related expenses.
Unlike other loans that provide on consolidated loan amount and leave the usage of the funds at your discretion, an education loan will provide financing for specific study-related expenses. Say you need funds to cover your visa fees, or your entrance exam fees or to buy books or a laptop, or to cover any despots – your educational loan will keep providing you the required funds, as long as the total loan amount borrowed doesn’t exceed your total eligibility amount.
4. No collateral required.
Providing collateral is a common requirement with many loan offerings, especially if the loan amount is considerably high. However, most private non-banking financial institutes will provide you loan amounts up to 40 or 50 lakh without the need for you to provide collateral.
5. Proof funds.
If you choose to study abroad, you might have to secure a visa to make your
travel to the said country possible. However, some countries like the USA and
Canada, among others, requires you have a certain amount of bank balance to
provide you the visa. Usually this amount is quite substantial and usually in
lakhs. This creates a hurdle for many students. However, with a student loan,
you can easily arrive at the required funds by opting for the proof of funds
financing option.
These were 5 of the more important features of an education loan. We hope the
above pointers help you make an informed decision when you require the service
of a loan. Good luck and all the best!
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