5 questions to ask lenders before taking an educational loan

Education Loans have helped scores of students complete their higher studies. These loans have become more accessible. But before applying for a such a loan, students should be careful while getting education loans for their higher studies. The lender, from whom a student takes an educational loan, plays a crucial role in the student’s higher education journey. Hence, it is necessary that the student asks the right set of questions to the lender before taking an education loan.

In this article, we will tell you about 5 questions that would help you select the right lender to fund your higher education.

1) What are your credentials?

Selecting the right lender for funding your higher education is the most important thing. A right lender would make your higher education journey, and the repayment tenure of your educational loan as easy for you as possible. Read reviews about different lenders on the internet. Know the praises or complaints the borrowers have from their lenders, and shortlist a few lenders that score the best in your test. Visit these lenders’ offices, and ask them about their commitment to their borrowers’ satisfaction. Judge how dedicated they are to provide quality service to their borrowers.

2) What kind of expenses will be covered?

After you shortlist a few lenders, ask them about the kind of education-related expenses they will cover. The right lender will agree to pay the tuition fee of your whole course. Apart from that, that lender would also cover your travel expenses to the city where your university is based, the lodging and boarding expenses in that city for the duration of your whole course, the mess expenses, exam fee, library fee, laboratory fee, books and stationery expenses, and so on.

3) What is the interest rate of your education loans?

Interest rate levied on an educational loan decides how much money you shell out from your pocket while repaying it. The interest rate of education loans in India usually lies between 9% to 14% per annum. Try negotiating for a lower interest rate on your loan. The lower the interest rate, the more money you save while repaying your loan.

4) What value-added services will be provided?

Many times, students need education loans before they are admitted into a university, or they need proof that states that they have money to fund their higher education to secure admission into their chosen university. In such a situation, ask the lender if they provide value-added services like proof of funds, fast-track loan approval, pre-visa loans, pre-admission loans, doorstep service, and so on.

5) How generous will the moratorium period be?

Lenders do not expect the student to repay the education loan as soon as they graduate with a degree. They offer a grace period to the student to help them get a job, or start a venture, and save money earned from it to pay the EMIs of the loan. Ask the lender about the tenure of their moratorium period.

So, these are the 5 questions you should ask lenders before you take an educational loan from them. All the best!