With the ability to pursue their preferred degrees at their dream colleges, education loans have grown in popularity among students. However, the total cost of the educational loan that the student must pay back depends on several parameters, including interest rate, moratorium period, tenure, etc.
Thus, careful consideration must be given while applying for an education loan after opening a bank account in the Upi money transfer app to prevent paying too much. When submitting a loan application for education, take into account the following:
Eligibility Requirements
The loan’s eligibility requirements are the first thing you should be aware of. Although they could differ from lender to lender, the standards are generally the same. The lender would consider factors such as age, income, credit score, and outstanding loans.
In addition, you should be aware that not all courses, expenses, colleges, or universities qualify for the loan. Contact the lender to find out more about the courses, costs, and colleges/universities for which the loan is available.
Interest Rates
A student’s direct expenses are interest rates and processing fees. The interest rates on loans are mostly determined by the kind of course, the university, and the student’s academic history. A number of other factors influence interest rates, including collateral and credit rating. Students should raise their credit scores before applying to get the best rate possible on a loan.
Secured or Unsecured
Make sure you want an unsecured or secured loan before comparing education loans to choose them effectively. If you choose the secured option, you will have to put up collateral, such as your house, as security for the loan amount. Choose between a secured or unsecured loan after opening a zero account in a UPI account and applying for a bank loan because it will affect the interest rate, loan amount, and loan tenure.
Loan Tenure
Generally, student loans from most Indian banks are available for up to eight years for unsecured loans (loans without collateral) and up to ten years for secured loans (loans with collateral).
Also, there is a moratorium period that lasts an extra six months following the completion of the course, during which you are only required to pay the interest portion of the loan. However, lenders may also differ in this time frame.
Loan Repayment
Loan repayment periods vary depending on the lender and the type of loan. When it comes to moratoriums, two choices exist.
- a) With interest payment: The parent or student must pay only interest on the amount of the loan that has been disbursed, whether fully or partially. After the moratorium period, principal repayment begins.
- c) Without interest payment: The parent or student is exempt from having to make interest payments. After the moratorium period, the EMI (equivalent monthly installment) begins. Interest earned during the study term is added to the loan amount.
Final thoughts
If you are aware of the above-given crucial things after you open a bank account, obtaining an education loan can be a simple process. After you have the necessary information, you can get your loan offer from the bank by submitting your details online. UPI Money Transfer helps you pay loans on time to maintain a healthy Cibil score.