Education loans offer easy finance for higher studies. But do you know all the technical jargon associated with the loan? Here are 5 such jargons, simplified!
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#1 – Moratorium period
A period when no EMIs are paid after loan disbursement. It ends 6 or 12 months after course completion or till you a job, whichever is earlier.
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#2 – Collateral
An asset which is pledged against the loan to reduce the chances of repayment default for the lender. It is used in secured education loans.
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#3 – Margin
Few education loan lender doesn’t finance 100% of the course fee. It pays a part of the fee while you pay the rest. What you pay is called the margin.
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#4 – Co-signor
Another individual who applies for the loan with the student, usually the parent. The co-signor shares the loan repayment responsibility.
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#5 – Sanction letter
Issued by the lender, the sanction letter is the proof of loan sanction. It is a legal document which also contains the loan details.
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Know the terms when availing of the loan. For education loans up to 100%* financing at attractive interest rates, choose IDFC FIRST Bank.