5 questions to ask lenders before getting an educational loan

An educational loan helps the student to learn skill sets of their trades, and work to be a contributing unit of the society. Many students work at their chosen professions because of the boon that education loans are. But, it is important that students get education loans from legit lenders so that they don’t fall prey to finance scams.

In this article, we will suggest you the questions you should ask the lenders before you take an education loan from them.

1) What are your credentials?

The most important thing to look for in the lender is whether they operate within the regulations set by the regulatory authority in India. Ask them if they work within the rules. Ask the lenders about their commitment to the service given to the customers. Ask customers about the complaints or the praises they have for their lenders. Visit online reviews given to the lender and find their overall score against other lenders. Based on all of these factors, decide whether it is safe to take an education loan from the lender.

2) What kind of expenses will be covered?

You would want the educational loan to cover all of your expenses, wouldn’t you? Some lenders will help you and some will not. Many NBFCs offer education loans that cover the college tuition fee and along with it the travel expenses, lodging and boarding expenses, library fee, examination fee, stationery expenses, a laptop, and so on. Ask your lender whether it will cover all the expenses related to your higher education.

3) What is the interest rate?

This is the most important question of all the ones mentioned here. The interest rate levied on an educational loan changes from lender to lender and from case to case. The education loan is the most affordable type of loan in India as the interest rate levied on such loans range from 8-14%. Ask the lender to set the interest rate as low as possible in your education loan. Low interest rates would mean you would pay less and save a fortune by the time you pay the last monthly installment of the loan.

4) What is the tenure of the moratorium period?

The lenders do not expect the students to start repaying the loan as soon as they complete their studies. They offer a grace period to students. It is called the moratorium period. Usually, the moratorium period lasts until 1 year from the time the student completes his or her education, or until 6 months from the time the student gets his or her first job, whichever comes earlier. Ask the lender to give you a comfortable moratorium period so that you can prepare yourself for repaying the loan.

5) What types of customer-friendly services are offered?

The services that different lenders offer their borrowers will differ. NBFCs provide services like doorstep verification service, fast-track approval, 24*7 helpline numbers and friendly staff to answer the customers’ queries and so on. Ask your lender whether it will provide you these services. So, these are questions you should ask your lender before you take an educational loan. With these questions, you are better prepared to choose the best lender to finance your higher education loan. We wish you all the best!