6 myths on getting an education loan

Education loan has become the most essential factor that one needs to look into when they plan on financing their higher studies. Banks and various other financial institutions have several loan offerings that make it possible for students to avail higher education.

However, there are still people who have second thoughts or are skeptical about taking education loans.

There are certain myths that are associated when we talk about education loans, with this article we hope to debunk them, one by one.

1) Students without top-notch grades cannot get an education loan

This has to be the biggest myth that students have, they feel that only high-level grades are accepted when opting for an education loan.  Well it is not true if the student has someone who can stand as a guarantor on the loan and if they have secured a seat in the university that you have applied for then it makes you very well eligible for an education loan.

2) Education loans are just for long term financing needs and not for short term needs

Those were the days where we used to see education loan system catering only to long term financial needs, but now there are some banks and various NBFCs that also offer help and assistance for short-term financing needs. Vocational courses, college fees, tuition fees, and short-term courses are covered in education loans and that helps students to fulfill their education dream without spending out a huge amount of money.

 3) Education loan rates are the same for all institutions

Every bank and NBFCs have different set terms and conditions when it comes to education loan rates, also vary depending on the course and the college that the student has opted for.

4) The process of taking up an education loan is time-consuming

Students and parents think that the approval of education loans would take months and will include a lot of legal formalities and have complexities. But it is not true if you take up education loans from NBFCs the process would be done within 3 to 4 days.

5) EMIs act up as soon as you take education loans

It is not true; they don’t start until the moratorium period is over, banks provide you with a little more time so that you can get a job and collect the funds for repayment. Usually, the repayment process commences after 6 months after you finish the course.

6) Education loans don’t disturb credit score

If you fail in making a payment for your education loan that will definitely make a negative impact on your credit score. This would show up when you apply for other loans, credit cards, or other financial purposes. So when you take up an education loan, make sure to do the payments on time as that will help you maintain a good credit score.

We hope you found this article helpful and have a clear understanding on education loans, all the very best!