4 Facts about Education Loans that you might not know

The cost of education is skyrocketing. But that should not discourage you from following your dreams of getting an excellent education and embarking on a sparkling career. Various banks and NBFCs in India offer competitive education loans to help you achieve your goals. There are some key education loan details that many are unaware of. Before you apply for one, here’s what you need to know about education loans.

Comprehensive loan covers fees, rent, and more
 

An education loan covers more than just your college fees. It covers all expenditures associated with your degree – right from your first year until graduation. This includes tuition, books, learning equipment, gadgets such as laptops and phones, hostel charges or rent, field trips, food, travel to and from the university, everyday items, and other expenses you may have to bear as a student. In other words, it is a comprehensive loan that takes care of all your financials so that you can be stress-free and focus on studying.

Cost-Effective repayment when working abroad
 

While student loans are available at cost-effective interest rates in India, they become cheaper when you work overseas. There are high chances that you will seek employment in the country you graduate from. Say you earn your degree from the UK and start earning in pounds. Not only will you be earning in a foreign currency, but you can also take advantage of the depreciating value of the Indian rupee. For example, you may have taken the education loan when 1 GBP was INR 95 and started repayment when the exchange rate was INR 98; this will work in your favour and make the overall loan cheaper.

Needy students are eligible for subsidised loans
 

Here’s an education loan detail you may not know. Students who lack financial means can apply for an education loan subsidy offered by the Government of India under various schemes such as the Central Scheme of Interest Subsidy, Padho Pardesh scheme, or Dr Ambedkar Central Sector Scheme of Interest Subsidy. In such cases, they receive subsidy on education loan interest for a specified period. The students only have to repay the principal amount, while the government takes care of the interest component. However, if the repayment schedule exceeds the moratorium period, the student will have to bear the interest cost.

No foreclosure restrictions
 

Financial institutions typically charge a penalty on foreclosure of loans; however, as mandated by the RBI, creditors cannot charge a foreclosure penalty on paying off student loans. If a student or their family has the financial means, they can prepay the outstanding student loan debt in part or full at any time, as along as a minimum of six EMIs have been serviced. They will not incur any restrictions or financial penalties for foreclosure.

Conclusion

An education loan is supposed to give wings to your aspirations, which is exactly what IDFC FIRST Bank offers! Avail of 100% financing at attractive interest rates and flexible repayment options that ensure you get the best education without being saddled by financial obligations. Whatever your education goals are, you can get easy, hassle-free financing for over 18,000 courses across 25+ countries. 

With time being a critical factor for college applications, IDFC FIRST Bank also offers a seamless application process and swift fund disbursals so that you can maximise the opportunity of a lifetime.

Disclaimer

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