5 questions to ask lenders before getting an education loan

Have you decided to study a course from a college of your choice and thus, further your career prospects? If yes then do you have the funds required for your education? Either way, this article will help you to get an education loan for your higher studies. It will help you to ask the right questions to the financial lenders before you get an education loan from them.

1) What are your Credentials?

Notice the credentials of the lender. Ask them for their credentials. Meet the past borrowers of the lender online or through your lender itself. Ask those borrowers their overall thoughts on the lender’s trustworthiness and reliability. Visit the review pages about the lender on various public review platforms and notice the lender’s credibility. Then decide for yourself whether or not the lender is right for you to get an education loan from.

2) What expenses will be covered?

Ask the lender how much of the expenses of your education will be covered and what kind of expenses will be part of the loan amount. Most lenders offer education loans that cover the college tuition fees, the travel expenses, the accommodation expenses, the library fees, the canteen fees and stationery expenses etc. The banks offer to cover only 80-85% of the total expenses. While the NBFCs mostly cover all of the expenses mentioned.

3) What is the loan repayment tenure?

Ask the lender how much time they would give you to pay back the education loan. Most of the time, lenders provide 8 years to pay back the loan. But some lenders extend the time to longer durations for your convenience. Ask them whether they could adjust the tenure if you need to reset the EMI values due to some unforeseen incidents.

4) What is the interest rate?

Ask the lender what is the lowest interest rate they can provide while giving you the loan? Look for lenders elsewhere if they can lend you money with a competitive interest rate? Ask many lenders about the interest rate before you decide on the one who guarantees you lowest interest rate on the education loan.

5) How long is the moratorium period?

Ask the lenders what is the grace period they are willing to give you. The lenders do not expect the student to start paying back the loan as soon as they earn the degree certificate. Most lenders provide a moratorium period of 1 year from the date of completion of education or 6 months from bagging a job, whichever comes earlier. The grace period provided changes from lender to lender. Ask your lender to keep your convenience and economic prospects in view before they decide the moratorium period of your loan.

So these are the 5 questions you should ask the lenders before you get an education loan from them. The most favourable lender would try to help you as much as possible about the loan amount, the interest rate, the tenure and through services like proof of funds, pre-admission loans, pre-visa loans etc.

We wish you all the best for your higher studies!