Everything you need to know about education loans

Everything you need to know about education loans

A full and fruitful life necessitates a high-quality education. For several, it is the equivalent of graduating from a prestigious university. However, the cost of education is increasingly rising. In reality, the price of attending a reputable university is already very high. Parents who plan their child’s education in advance and want to provide them with the best opportunities possible to invest their money in mutual funds (MFs), fixed deposits (FDs), and unit-linked insurance policies (ULIPs). However, amid all of this, there could be a financial shortfall. In such a situation, an education loan plays a critical role in bridging the gap between the amount in hand and the total amount needed. According to research, education costs are rising at a rate of 15% per year on average. In 15 years, the cost of an MBA is expected to rise from Rs 2.5 lakh to Rs 20 lakh. So, if a couple saves Rs 2,500 per month for 15 years at a rate of 12%, they would have saved about Rs 12.5 lakhs. Now, you all must have some questions in your mind regarding the intricacies of availing of an education loan. We have tried to answer a few commonly asked questions to enhance your understanding 1. Who can apply for the loan? The primary creditor is a student. A co-applicant may be a parent, partner, or sibling. 2. What is covered by a student loan? It includes the basic course fee and other costs such as (college) housing, exams, and other miscellaneous expenses. https://www.youtube.com/watch?v=4gTQkdePOWM 3. To whom is the loan being extended? It is available to students who wish to study in India or further their education outside of the country. The overall sum available for studies in India and abroad differ from one bank to the next. 4. For what courses can the loan be availed? It is available as a full-time, part-time, or vocational course leading to graduation or post-graduation in engineering, management, medical, hotel management, architecture, and other fields. 5. What are the eligibility criteria and documentation requirements? To be eligible for the loan, one must be an Indian citizen who has been accepted into a college or university that is recognized by a competent authority in India or abroad. The applicant must have completed his senior high school education. Some banks provide a loan even before a student has been accepted to a university. The Reserve Bank of India (RBI) guidelines state that there is no upper age limit, but some banks may impose them. Additional documents such as the institution's admission letter, fee structure, and Class X, XII, and graduation (if applicable) mark sheets are required by the banks. The co-income applicant's records, such as salary slips or income-tax returns (ITR), are also needed. 6. Is collateral required for financing the loan? Depending on the number, banks will fund up to 100% of the loan. There is currently no margin money available for loans up to Rs 4 lakh. To study in India, the applicant must contribute 5% of the necessary funds. The needed margin money for international studies, on the other hand, rises to 15%. Banks may also need collateral for loans exceeding Rs 7.5 lakh. For loans up to Rs 4 lakh, financial institutions currently do not need any collateral or third-party guarantee. A third-party guarantee is required for loans between Rs 4 lakh and Rs 7.5 lakh. For loans exceeding Rs 7.5 lakh, a security deposit is required. According to the fee structure, when a loan application is approved, the banks send the funds directly to the college or university. 7. What is the rate of interest charged on the education loan? To set an interest rate, banks use the Marginal Cost of Funds based Lending Rate (MCLR) which in India ranges anywhere from 7% - 8% plus a spread (about 1-2.5%). The additional distribution is currently in the 1.35-3 percent range (as of 2017). 8. What is the process of repayment? The individual availing the loan for their education is responsible for repaying the loan. In most cases, repayment begins when the course is completed. Some banks also give you a six-month grace period after you get a job or a year after you finish your studies before you have to pay back your loan. The repayment period is usually between 5 and 7 years, but it may also be extended. The bank charges a basic interest rate on a loan over the repayment period. The student's equated monthly installment (EMI) burden for future repayments is reduced by paying basic interest during the course duration. 9. What precautions should one take while applying? When availing of the loan, one must consider bank fees such as transaction fees, pre-payment fees, late EMI payment fees, and so on. The majority of lenders charge a processing fee of 0.15 percent of the total loan amount. 10. Are there any tax benefits? The interest paid on the repayment is deductible under Section 80E of the Internal Revenue Code. This tax benefit is only available to people who are paying interest on a personal loan. The whole amount of interest charged is deductible from your taxable profits. This deduction can be taken for up to 8 years. There are no tax deductions available for the principal sum. FAQs What is an education loan? An education loan is a type of loan given to students who wish to pursue higher education but fall short of finances. Its primary goal is to help students sponsor their higher education. The eligibility criteria for education loans is simple, it requires students to be above the age of 18 and must have an offer letter. Is collateral required for financing the education loans? There are two types of education loans, one with collateral and the other one is without collateral requirement. Depending upon the loan amount, banks may require the applicant to submit a collateral as security. Loan below 4-5 lakhs do not require collateral, however, the policy may differ based on the issuing party. What are some precautions one should take before taking an education loans? When availing of the loan, one must consider bank fees such as transaction fees, pre-payment fees, late EMI payment fees, and so on. The majority of lenders charge a processing fee of 0.15 percent of the total loan amount. Conclusion Good education is extremely important in the present dynamic world which not only boosts self-confidence in students but also equips them with skills that in turn help them lead their best lives. Hence, taking a loan might look frightening but in the long run, it definitely pays off provided the student is focused and makes the best of the opportunity. You can fill in a simple form to get started with your education loan application. Also, since an education loan is a person's first loan, it aids in the creation of a good credit score. If you repay the loan on time and without defaults, it would be easier for you to obtain a home loan, car loan, or any type of loan in the future. Consult an expert advisor to get the right plan TALK TO AN EXPERT
How to choose the best college for your child's education?

How to choose the best college for your child's education?

Want your child to go to the best possible college in India or abroad? Plan way ahead of time. Being prepared beforehand is the secret ingredient to being a successful parent when it comes to backing up your ward’s academic career. When you build an education fund it is important not only to save up but also to invest. Here are some pro tips on how to send your child to the best possible college.   1. Planning ahead The significance of planning ahead can not be stressed enough. There are multiple reasons why you should start having forethoughts about your family’s future. Firstly, an ideal way of demystifying a huge process is to break it down into short-term goals. Secondly, it can resolve all the stress that may come your way when you are faced with the biggest monetary decisions of your life. One such decision is regarding the college your child will eventually attend. When you are ready with your investment money and savings directed to your kid’s education, you can effortlessly offer financial backing in whatever dream college they aim for. The pandemic has not been entirely successful in distorting the trend of pursuing a global education. Make sure to start investing early so that you can keep many options open for your kid.   2. Choosing investment schemes  There are too many options to choose from when it comes to investment schemes. This is another reason why you should begin as soon as possible. This way you will have more time in listing out the most suitable choices and deciding how you are going to divide your money between savings and investments. You can go for mutual funds instead of investing directly in stocks. Investing in mutual funds is a hassle-free option, unlike direct investments as you will not be required to have in-depth knowledge of market trends. 3. Considering the possibility of a global education While it is not possible to know for certain the stream of education your child will opt for in the future, it is advisable to remain prepared. It can be useful to remember that the earlier you invest, the more wealth you generate. This principle works for every financial goal you set and it is particularly beneficial if there is a possibility of pursuing global education. Another concept you need to be familiar with in this situation is education inflation.  Education inflation is a result of the costs of education rising faster than the average income, and this rate of inflation is higher than the rate of general inflation in most countries. The only way to beat education inflation? Start investing early. FAQs What is important when choosing a college? The most important criteria for choosing a college for your child are the course and their reputation in that field. For example, if your child wants to study business, they should aim for universities like Harvard, Columbia, University of Pennsylvania, and MIT. Other factors to consider are rank, ROI of the university, acceptance rate, qualifications, and eligibility criteria as well as the fees and cost of pursuing the course. It's important to look at scholarships, application waivers, and the placement opportunities offered by the college. How do I choose the right college for my child? The right way to choose a college for your child is to plan ahead. Find out which course your child wants to pursue, and check out the best colleges and the best country to pursue that program. The next step is to figure out the future cost of college for the program. You can use the college cost calculator to determine the cost of tuition fees and living expenses, adjusted to inflation and price increase. How to plan for college? The most important aspect of planning for college includes cost and tuition fees. There are multiple costs involved in sending your child off to college such as tuition fees, accommodation, travel, books, stationary, lab expenses, and miscellaneous expenses. Tuition fees and accommodation are the two biggest expenses that parents need to bear, thus, starting an education fund after determining the costs is the best way to plan for college. Conclusion The above-mentioned points prove why simply looking up dream colleges for your kid is not enough. To be practical, financial backing is one of the most important factors in this matter. Plan ahead. Diversify your investments. Provide your child with the future that they deserve.
Is it worth taking an education loan?

Is it worth taking an education loan?

Introduction The common myth about student loans is that they apply to only students who come from underprivileged family backgrounds. While education loans are crucial for meritorious students from not-so-well-to-do families, they can be a go-to event for families that can afford to pay for their kid’s education. You might wonder, why go for education loans when you have the money? Well, as understated as they are, education loans can help you inculcate some healthy monetary habits. They can help you compartmentalize your finances quite efficiently. Moreover, they come with a range of benefits.    https://www.youtube.com/watch?v=4gTQkdePOWM a) Putting away pressure from other savings  A household runs on a variety of expenses, which is why it is so important to break these down. You can categorize your monthly income into expenditures and savings. When you compartmentalize, you can have some level of clarity on how much you would like to put away as savings. Saving for your child’s education is a brilliant idea but it is not entirely opposed to applying for education loans. This means that savings and loans are not alternative methods of securing your child’s education. In fact, they can go hand in hand in helping you manage your finances most effectively.  For example, covering all of the expenses related to your kid’s education it can take away all the strain on your savings and investments. You will no longer be required to liquidate your fixed deposits and mutual funds before their maturity period.  b) Financial disciplining  Having money put away for your child’s education is a great decision on your part but that should not come in the way of your child learning to be self-dependent. In fact, education loans are a great way to teach your kid to manage their own finances.  It is a great start to the art of setting financial goals and meeting them no matter what. This kind of financial discipline can go a long way in teaching them to be responsible beings as they grow up.  c) Creditworthiness & its rewards  Student loans are a great way to build credit. With the increasing credit score, your child will be qualified for future loans of this nature. It will instill self-belief in them regarding their capacity to be self-sufficient.  With education loans, you get to borrow money at relatively lower interest rates. On top of that, an impressive credit score makes your child more qualified to avail of future credits at low-interest rates.  d) Crucial if you are planning to go abroad  Education loans are particularly useful if the plan is to go out of the country for higher education. Global education takes into account not only tuition fees as an expense but also the cost of living, among other things. You should also consider that the value of the Indian currency has been depreciating for many years against most foreign currencies like the US Dollar. As such, the cost of sending your child abroad becomes exponentially high when weighed against the cost of sending them to a different city in India for higher education.  Thus, in most cases, your savings will not be adequate to support your kid’s education abroad, unless you have been saving for a child's education from an early age. If the candidate is worthy enough of the financial support, student loans are not only easy to avail, of but also within the capability of students to pay off simultaneously as they receive their degrees from reputed institutions abroad. e) Tax benefits  Last but not least are the tax benefits that come as an added advantage to availing of education loans. Under Section 80E of the Income Tax Act of India, the interests paid on education loans can be claimed as deductible. This means although tax benefits can not be applied to the principal amount of a loan, one can be exempt from paying the interest amount. Once your taxable income has been evaluated, you can avail of this tax benefit on your interest money without any higher caps. Such benefits are usually availed either by the candidate who is pursuing an undergraduate or postgraduate course or by their legal guardian.  FAQs Is it wise to take a student loan? Yes, it is wise to take a student loan if it can help you sponsor your education or your child's education. Depending upon the interest rate, the repayment horizon and the ROI of your course, you can determine whether or not you can afford the EMIs on your salary. What are the benefits of availing an education loan? The biggest benefit of availing an education loan is the ability to finance your studies. It helps students across the global pay for college and build a career for themselves. Other benefits of taking an education loans are affordable interest rates, grace period and repayment flexibility for students, tax benefits, helps builds credit and helps you save your savings for other financial goals. What are the disadvantages of education loan? There are many disadvantages of education loans - High interest rates and costly EMIs Loan repayment can last up to 15 - 20 years Students have to pledge collateral if the amount is higher Non-payment can lead to heavy penalties and affect your credit score Can induce stress and increase student debt in case of non-payment Conclusion Education loans are definitely a good idea because they can ease up not only your child’s educational path but also their prospective career routes. There are various kinds of education loan schemes available in the market. The things that you must consider while making this choice are low-interest rates, tax benefits, credit limits in the case of global education, and so on. Weigh your options carefully while choosing the best one for you.
What is concentration risk in equity funds?

What is concentration risk in equity funds?

What is concentration risk in Equity funds? Let us explain! Have you heard of the saying “putting all your eggs in one basket”? It means that you are dedicating a large number of your efforts and financial or other resources to one thing and hoping for its great success. Similarly, in your investment portfolio, your eggs are your savings - the money bags and the sectors or themes or instruments are the baskets. When you put all your eggs in a particular sector, and if the market crashes down due to unforeseen market conditions, all your eggs go bad (in short – you lose all your money bags). This is a concentration risk. When you have invested a lot in a sector, most of your expected returns depend solely on that particular sector’s performance. The possibility of your returns getting derailed due to high dependency on a small set of factors - this unique risk is called concentration risk. Why is this risk important? When we invest, we invest for our future, and our long-term goals – retirement, children’s education, wedding expenses, and more. Suppose, you invest in a mutual fund that is supposed to earn you a 15% return. However, if the mutual fund invests only in the infrastructure sector – this fund could be impacted by a multitude of macroeconomic factors such as interest rates, price of fuel, currency appreciation/depreciation, etc. In the time period of 2007-12, the infrastructure index gave an annualized return of -3% when compared to Nifty, which earned its investors a return of 7-8%. This is when diversification becomes important. Your portfolio should consist of sectors that complement one other. For instance, when oil and gas prices are on the rise, the energy sector is outperforming the market. However, the infrastructure sector which uses energy as input, or any sector which utilizes oil and gas as an input in their production would see an increase in costs – a decrease in stock price. Hence, these would move in opposite directions. If you had stocks from sectors that are moving in the opposite direction, you would either benefit from the net upside (Sector 1 increase + Sector 2 decrease), or you would limit your downside. Some sectors such as steel have long business cycles – they tend to have a longer slump (of greater than 10 years) due to macroeconomic conditions such as lower demand or higher supply, etc. If one invests in these sectors, there is a high risk of your portfolio underperforming the market. Consider a fund that invests in oil, steel, and other metals (they are also available as commodity indices). Oil and metals typically see simultaneous ups and downs in market cycles – this would mean higher risk and a higher impact on the portfolio of the fund. Marco-economic correlation Debt funds are impacted by a change in interest rates. When the RBI policy announces an increase in interest rates, the prices of the funds start to plummet if they have invested in long-term bonds (which are impacted the most). Similarly, there could be sectors that are impacted by interest rate movements or GDP movements. When there is a declaration of a decrease in interest rates by RBI’s monetary policy, NBFCs could gain from this move. The banking sector could be affected by this move due to a crunch in the interest margin i.e., profit for the bank – as the interest rates climb up, the profit margin increases and vice versa. However, this could also mean that the banks are able to borrow from the RBI at a cheaper rate. Large companies with stable cash flows will find cheaper debt financing options, and hence their stocks could also be on the rise. Hence, if one had only invested in the Banking and Financial sector (BFSI), one would see a drop in their portfolio. When there is an increase in interest rates and if one had invested in the Auto and Real estate sectors - despite having invested in two sectors, the impact would be negative. Beware of these correlations and invest in sectors that are least similar, so that your eggs cushion your portfolio during economic volatility. FAQs What causes concentration risk? Concentration risk is a result of uneven distribution of exposures (or loan) to its borrowers. How can you prevent concentration risk? You can prevent concentration risk by diversification across sectors, rebalancing your portfolio or by selling your certain investments. What is concentration risk? Concentration risk refers to anticipated loss in investments due to investing in multiple funds with the same or similar investment strategy. The loss cannot easily be remedied and hence, investors are advised to avoid it. What is concentration risk limited to equity funds? No, concentration risk is not limited to equity funds. It is also present in debt funds and it is important to understand the sectors and areas of investment of each fund to avoid this risk. Consult an expert advisor to get the right plan TALK TO AN EXPERT
Importance of education loan calculator

Importance of education loan calculator

With the increasing cost of higher education, it is becoming increasingly difficult for students to pursue higher education. The high education cost has been one of the main reasons for worry amongst the students. To avoid losing opportunities, students often turn to financing their education via education loans.  But education loan isn’t always that simple. With procedural and interest rate variations, practically all banks and financial organizations provide education loans. The tricky part is figuring out the EMI. Some of these loans are given at a very high-interest rate making them more expensive. Herein lies the importance of the education calculator, it enables you to make the best choices. It is important to know and calculate the EMI costs beforehand for what amount the loan is taken along with its interest rate and the repayment time/tenure.  Advantages of using an education loan calculator  One benefit of using an EMI calculator for student loans is that you can see the results right away. Using a loan calculator is very convenient. You may obtain your EMI by entering the loan amount, interest rate, and loan tenure without having to perform any complex calculations. Additionally, these EMI calculators are free and simple to use.  https://www.youtube.com/watch?v=4gTQkdePOWM Benefits of education loan calculator  Let’s find out the benefits of education loan calculators:   Saves time and effort: People can easily know the EMIs they will be required to pay by using an education loan calculator. The need to invest your own time and effort for the interest EMI calculations is eliminated.  They are not required to spend time performing manual calculations. The calculator will show customers how much they would need to pay in EMIs when they enter the loan amount, interest rate, and loan tenure.  Results that are accurate: If one is not precise and careful with the numbers when calculating manually the EMI amount, there is always a chance for error. On the other hand, using education loan calculators guarantees precise outcomes.  Financial planning aid: Users can determine the amount they would be required to pay in the form of EMIs by entering important information about an education loan into the calculator. Knowing this is crucial since it helps them assess their financial situation and determine whether they can afford the loan and also help them formulate a strategy for loan repayment.  Personalized calculations for EMIs: You can easily personalize your EMIs to your needs and establish your repayment schedules accordingly with the help of online EMI loan calculators. You can experiment with different numbers with the input variables to examine the several EMI alternatives accessible to you in order to choose the one that best suits your needs. You can choose the amount of your EMI, the length of time you want to repay your education loan, the banks that offer you the greatest interest rates, and repayment terms using these online loan calculators. Also read: What are the benefits of education loans in India?  Factors affecting interest rates on Education loan  Type of educational institution: Chances are that a lesser interest rate would be levied if the applicant had been accepted into one of the best colleges in India or overseas. In addition, banks might not demand collateral.  Gender: It has been noticed that most institutions provide female students with a lower interest rate than they do male students. The major goal of this is to inspire young girls to continue their studies and flourish in the classroom.  Credit history of parent or guardian: When a child applies for an education loan, the parent or guardian often serves as the guarantor. This is also the case when the student does not have a credit history the lender would require a family member or guardian to be the guarantor of the loan. In instances like this, it is vital for the guarantor to hold a good credit score so as to ensure that the loan application is not rejected.  A credit score of the applicant: The lender may be willing to offer a lower interest rate on an educational loan if the applicant himself or herself has a good credit score. The higher the credit rating, the lower will be the interest rate charged. Maintaining a score above 750 is always advised since the applicant will be regarded as a creditworthy customer.  Must read: Do education loans cover living expenses?  This is why using an education loan calculator can be a benefit for those planning to take the loan. It helps you determine the final amount, personalizes your EMIs, and figures out the best course of action before making a life-changing commitment.   Finding the best education loan is tough but we can simplify it for you! Connect with our experts today to find the best and low-interest education loans for your child’s bright future.  Consult an expert advisor to get the right plan TALK TO AN EXPERT
What is a merit-based education loan?

What is a merit-based education loan?

Worried you don’t have a good credit history to get an education loan for your children? With the increasing cost of higher education, it has become very difficult for students to pursue further education. Most financial institutions like banks assess a loan application on the basis of creditworthiness. Students don’t usually have a decent credit score making it difficult to get loans for higher education.   For students who are good at academics, this is where merit-based education loans come in. This new type of education loan program evaluates the students' profile and potential based on their academics or merits so that loans could be given on their future earning potential rather than their credit history.  The main purpose of education loans is to ensure that every student who wants to pursue higher education gets the opportunity to study and develop a sound career.   The merit-based education loans are easy to get once your profile qualifies for the loan and are solely given on basis of a student’s merit and profile. These loans can be obtained digitally. Who is eligible for the merit-based loan program?  The eligibility for merit-based loans solely depends on the student’s academics and merits. To be eligible for these loans, the student must be excellent in their academics and merit. This would be evaluated by their individual profile. The loan would be approved once the academic excellence is established.  Eligibility criteria:   The applicant should be a resident of India who has secured admission to renowned colleges or universities in India and abroad.    The candidate should be within the range of 18 to 35 years at the time of taking the loan.   The applicant must be pursuing a graduate or postgraduate degree and a PG diploma.   He/she must have a confirmed admission in a college/university recognized by UGC/Govt./AICTE etc.   Candidates applying for full-time courses must have a co-applicant who can be the parent/guardian/spouse/parent-in-law (if married).  Which courses are this loan program applicable to?  Undergraduate Degrees and Diplomas (BA, BCom, BE, BEd, BSc, BBA, MBBS, B Tech, LLB.  Postgraduate Degrees and Diplomas (MA, M Com, MSc, M Res, LLM, MFA, M Ed, M Phil, MBA, MD, and others)  Ph.D. courses/Miscellaneous Doctoral Programmes.  Specialized Training Courses.  Furthermore, the lender will determine which courses are qualified for merit-based loans.   https://edufund.in/blog/what-is-a-merit-based-education-loan How does extending loans based on merit work?  Merit-based loans are given after examining a student's potential via the Employment Predictability Model which is an Artificial intelligence (AI) that examines the merits and academics of a student to test for their soft and hard skills so as to assess the student's employability in the future which will help the AI to decide if your profile is fit for a merit-based loan.  The assessment then predicts the future income of the students.  Then loans are sanctioned on the basis of your future employability score.  What are the documents required to apply for merit-based education loans?   Properly filled Loan Application Form   Letter of admission   Copy of 10th/12th mark sheet or latest education certificate   Statement of cost of study   2 passport-size photographs   Pan Card and Aadhaar Card of the student and Parent/ Guardian   Driving License/Voter ID/Passport/Aadhaar Card (Copy of any one)   6 months bank account statement of the student or guarantor or co-borrower/Rental agreement/Ration card/Electricity Bill/Tel Bill/Gas Book (Copy of any one of these)   Income proof   Latest salary slips or Form 16 of the parent/ guardian/ co-borrower    Last 6 months' bank statement or updated bank passbook    Updated 2 years ITR (Income Tax Return with income computation) or Last 2 years IT assessment order of parent/guardian/co-borrower    Statement of the assets and liabilities of the parent/guardian/co-borrower  Is a merit-based loan right for you?  Students who want to pursue higher education & require financial support can apply for the merit-based loan program.   The loan program overlooks your family income and credit score and gives loans solely on the basis of the applicant’s merit.   Students who do not want to bother their parents for finance can seek a merit-based loan program for their higher education.  Top Indian Banks that offer merit-based education loans  State Bank of India  HDFC Bank  Axis Bank  Canara Bank  SBBJ  Union Bank  UCO Bank  Bank of Baroda  Punjab National Bank  Non-Banking Finance Company (NBFC)  Merit-based loan interest rates in 2022 State bank of India6.85% p.a. to 8.65% p.aHDFC Bank 9.55% p.a. - 13.25% p.aCanara Bank 8.75% p.a. to 9.25% p.aUnion Bank of India6.80% p.a. to 10.05% p.aUCO Bank7.30% p.a. to 9.70% p.aBank of Baroda7.60% p.a. to 9.70% p.aPunjab National Bank6.90% p.a. to 9.55% p.aAxis Bank 13.70% p.a. - 15.20% p.a Merit-based loan EMI calculator   It is necessary to be aware of how much money you would have to repay once they acquire the merit-based loan. For this purpose, you can use Edufund to figure out the cost of repayment, how much your monthly payments would be, and how much the total cost of the loan will be. Enter a few loan-related factors such as the loan amount, tenure, interest rate, and processing costs to get an estimate of your equivalent monthly installment (EMI).   Need help finding the best education loans for your child’s higher education? Look no further, click here now to get started! FAQ What are the interest rates?  Various banks have their own interest rates on the loan amount. The interest rate is usually considered the sum of the base rate and markup. The base rate is usually around 8% to 10%. So, the interest rate depends on bank to bank, ranging between 6.85% and 15.20%. The interest rates are also dependent on the loan amount and the college or university in concern.  What are the courses covered under merit-based education loans?  Graduation, Post-graduation/Degree/Diploma courses from renowned colleges or universities approved by UGC/ AICTE/IMC/Govt. etc.  Regular Degree and Diploma courses conducted by leading autonomous educational institutes such as IIM, IIT, etc.  Educational disciplines include Engineering, Management, Medicine, Computer science, Pure Science, Architecture, Agriculture, Hotels and hospitality, Fine arts and design, etc.  Technical and vocational training courses such as aviation, air-hostess, shipping, nursing, teacher training, etc What are the expenses covered by merit-based education loans?  The merit-based loan covers the following expenses:  100% of the payable college tuition fees  Accommodation charges, if any  Books and equipment  Library fees  Examination fees  Traveling expenses for studying abroad, if any  Cost of two-wheeler  Other miscellaneous expenses necessary to ensure completion of the course  What is the loan quantum?  The quantum of merit-based loan are:  Up to Rs.10 lakh for studying in India  Up to Rs.20 lakh for studying abroad What is the time of loan approval?  The approximate time required for the approval of the loan is 15 working days which is calculated right from the receipt date of the application. The receipt is the guarantee that the application is completed in all aspects What is the loan disbursement process?  The merit-based education loan is disbursed either in installments or in full payment keeping in account the number of funds to be disbursed along with the fee schedule as reviewed by the bank directly to the mentioned educational institute What is the education loan tenure?  The loan tenure for a loan of up to Rs.7.5 lakh and more is around 15 years. It is within this loan tenure, that the candidate applying for the loan has to complete all the repayment processes of the loan and so on before the last date What is the education loan repayment duration?  The ideal repayment duration of the merit-based loan is the sum of the course period and 1 year or 6 months after getting a suitable job, whichever is earlier.  Are there any charges levied for late payment of merit-based loan EMIs? In the case of late payment of EMIs, lenders do levy a penalty. Depending on the lender, the penalty that will be levied will vary Will I be able to pre-close the loan? Yes, you can pre-close the loan at any time during the loan tenure Who are the individuals that can be co-applicants in a merit-based loan?  The below-mentioned individuals can be co-applicants:   Grandparents  Parents-in-law  Spouse  Sister  Brother  Parents  Is it possible to increase the tenure of the loan?   In case the course is extended by the university, the tenure of the loan can be increased. Consult an expert advisor to get the right plan TALK TO AN EXPERT
Living expenses in Germany for Indian students

Living expenses in Germany for Indian students

The affordable living expenses in Germany, a stable economy, high-class living, and numerous job opportunities make the country one of the premier destinations for quality education and successful careers.  The cost of living in Germany depends on the location of the university because some cities are relatively more expensive than others. It is important to be flexible if a student wants to thrive on a limited amount. The average living expenses in Germany for Indian students vary between 10,200 EUR – 12,000 EUR (nearly INR 8.1 lakhs – INR 9.5 lakhs) every year.  Students should be aware of their living expenses before traveling abroad as it is helpful in creating a budget for living expenses. The college cost calculator on the Edufund app is a blessing as it helps to get an estimate about the future living expenses besides the education costs and create a personalized financial budget based on needs and requirements. Semester contributions Most of the universities in Germany are state-run; hence the education cost is a bare minimum. Students, however, have to contribute between EUR 175 – EUR 250 (nearly INR 13,993 – INR 19,990) per semester for administrative fees and student amenities.  Students can also apply for a public transport pass or a semester ticket that costs between EUR 25 – EUR 200 (nearly INR 1,999 – INR 15,992) for six months, based on the type and location of the university. They will not have to pay for transport for the next six months.   Private institutions in Germany charge tuition fees, especially for non-EU citizens. Additional read: Education loan process for Germany Living expenses in Germany for Indian Students 1. Accommodation (average monthly cost) An important chunk of the living expenses goes towards accommodation costs, which depend on the location of the university and the type of accommodation the student prefers.  The preferred accommodations and their average cost per month are. 2. Food (average monthly cost) Students have access to restaurants and cafes on the university campus, where they can eat at discounted prices. For students that live off-campus, local street vendors and food trucks are an option.  The living expenses in Germany are manageable for Indian students as there are Indian stores that can provide ingredients to cook authentic food items. Students who have to rely on restaurants need to remember that eating out on a regular basis will prove expensive.  Self-cooking is the best way to manage funds because the cost of basic food and beverages is affordable.  Average costs on some of the common food items include. 3. Transportation  The daily public transport facilities in Germany cost around EUR 20 (nearly INR 1,599) and a monthly pass will cost EUR 200 (nearly INR 15,992). Students can apply for student passes or choose to move around via rented bicycles at a nominal fee. 4. Health insurance International students must have health insurance in Germany. Students who are studying degree programs are eligible for a public health insurance plan that costs between EUR 70 – EUR 80 (nearly INR 5,597 – INR 6396) per month. Whereas students above 30+ should have private health insurance that costs between EUR 400 – EUR 500 ((nearly INR 31,984 – INR 39,980) per month. 5. Utilities and Bills Students living off-campus have to pay for water, electricity, garbage, and heating. In some cases, the bill is included with rent, otherwise; it costs nearly EUR 29.42 ((nearly INR 2,352) for a kilowatt-hour. How to save more as an international student in Germany?  Keep a fixed budget for the month Studying abroad means, you will be away from your parent and you’ll be alone so you need to have a budget for everything.  Talk to locals  Talk to locals around you because they know that place more than you. They will tell you the best deals around you in restaurants, cafes, and all.  Cook for yourself Go to the local grocery market and cook for yourself. Eating outside daily can cost you way more than cooking for yourself.  Get a flatmate/roommate Sharing space and your accommodation mean that you will be able to cut costs. It will save you money. Staying alone in a flat or room means you will spend more. If you get a flatmate/roommate, the price of that place will be half. You will end up splitting utility costs as well.   Do a side hustle Earn money by doing some part-time jobs or a side hustle. By doing that you will learn and also earn extra for you.   Use public transportation or a bicycle Using public transport daily is the best way to save money in countries like Germany. Private cabs and rentals can be very expensive for students. If you live in a small town, then opting for a bicycle to roam the city is the most cost-effective method.   Go secondhand Cut costs wherever you can and the best way to do this is by opting for second-hand products. Suppose you need a bicycle, no need to get a new one! Buy it from a second-hand market or from someone who doesn’t want his/her bicycle anymore.  Save money wherever you can Cut off your unnecessary plans. There is Wi-Fi everywhere so instead of buying data plans use them. You should also unsubscribe from OTT subscriptions you are not using anymore. Or any auto-debit subscription that is not in active use.  FAQs How can international students save money in Germany? Here are some tips on how to save money in Germany: keep a maintained budget  Talk to locals  Cook for yourself   Get a flatmate/roommate  Do a side hustle  Get a bicycle  Go for secondhand  Save on your mobile bills  Is it expensive to live and study in Germany as an international student? In comparison to other countries and cities, Germany is one of the places which is less expensive. How much money can international students earn in Germany? You can earn around 450 euros (Rs 37,000) per month by doing part-time jobs. How much money do I need as a student in Germany? On average around 870 euros (Rs 71,000) for a month is all you need for your expenses. Conclusion Prestigious universities and reasonable living expenses in Germany make the country an excellent choice for studying abroad. If you are in a dilemma about the cost of living, then consult with the counselors on the Edufund app to know more about it in detail. Consult an expert advisor to get the right plan TALK TO AN EXPERT
15 gadgets to make student life easier

15 gadgets to make student life easier

Education can be a costly affair not only in terms of tuition fees but also the add-ons like different gadgets for students only add to your cost of living alone. Electronic gadgets form an important part of such expenses but there are some gadgets to make your student's life easier. Being informed about which gadgets serve your educational needs can be helpful in deciding if you need a laptop or a smartphone. In the long run, you don’t want to make investments you might regret later. You also want to take note of the following gadgets as expenses to consider while applying for an education loan.  Gadgets for students 1. Smartphone or Tablet  Gone are the times when a mobile phone was solely seen as a source of distraction for students. These days a smartphone is one of the primary requirements. Be it, online classes, watching educational videos, accessing your email account, or simply surfing the internet, a smartphone is a go-to.  An alternative to smartphones is tablets which come with slightly bigger screens and better resolutions. For example, an iPad will have a higher aspect ratio than an iPhone. This means that the iPad will have more resolution and screen size than the iPhone. But it also means that an iPhone is more compact as a device as compared to an iPad. While purchasing either, you are required to make the right choice by weighing it against your requirements.   2. Laptop or PC Unlike earlier, everything that can be accessed through a computer is also accessible through smartphones. But personal computers are favored over smartphones because of the experience they offer. A personal computer might comprise a monitor, CPU, keyboard, mouse, speaker, webcam, internal hard drive, and so on. Although these gadgets have to be purchased separately and can take up considerable space. But it is a good investment if you are a student because it creates a dedicated space for studying.   With laptops, the experience might not be as top-notch. Nevertheless, Macbooks are popular amongst students because of their compact design and the convenience of portability. A laptop works wirelessly and comes with a keyboard, inbuilt speakers, a web camera, and a touchpad in the place of a mouse. It is a brilliant investment especially if you are staying away from home for educational purposes.  3. External Hard drive  Nowadays every document you own can be saved up as a soft copy in cloud memory or your e-drive connected to your email account. This helps you take up less physical space with your studying materials. Even so, owning an external hard drive is a smart move if you want to be extra careful about preserving all of your materials.  An external drive allows you to access your documents easily without taking up much of your study space or the internal space on your device. All you have to do is connect the drive to your laptop or PC. Another attractive feature of an external hard drive is its portability.  4. Noise Cancellation Headphones  Headphones have existed as a wanted product in the market for a long time. One of the new features that have caused a terrific comeback for headphones is its noise cancellation. As the name suggests, noise-canceling headphones are meant to block out all of the external noise not only while listening to an audio clip but also during recordings or incoming and outgoing calls. The level of concentration a student can achieve is always considered a virtue that helps them excel in academics. Noise-cancellation headphones can help them attain that level of undivided attention which is also a requirement for online classes that have become the trend during the pandemic.  5. Printer  Even though many new and cool gadgets have flooded the market, printers shall never run out of fashion. If your subject or the academic course you have enrolled in requires you to get things printed regularly, going to a shop to get it done makes no sense.  Well-known brands like Epson, HP, Brother, Samsung, and Canon have introduced a range of budget printers to the market in recent years. By purchasing one of these, you would not only save up on your daily expenses but also preserve your precious time. In fact, having a printer at home can come in handy during emergency assignment submissions.   6. Electric Kettle & Emergency Lamp As a student, you might be required to pull all-nighters frequently. Even if that is not the case, staying up late might simply be part of your daily study routine. In such circumstances, gadgets that can make your life easier are electric kettles and emergency lamps.  Make yourself a cup of coffee or tea if you feel drowsy. You are no longer required to leave your study table to go to the kitchen as long as own an electric kettle. An emergency table lamp will come in handy if you are sharing your room with a fellow student or living in a dorm.   7. Kindle  Kindles will never run out of favor among students as long as academics is about gathering knowledge by reading books. A Kindle is an e-reader manufactured and sold by Amazon. One can read not only e-books but also e-magazines and other such digital content on this wireless gadget.  Call it a side effect of globalization, but nowadays students are required to keep moving from one location to another during different stages of their education. As such, a kindle is an indispensable gadget - it is the alternative to carrying hard copies of bulky books. Moreover, it comes with cool features like a highlighting tool and sometimes a waterproof body. Dictionaries will be at your disposal while reading if you have them downloaded on your kindle. You will not be required to carry a dictionary everywhere you go, as long as carry your books in your kindle.    8. External Batteries & Portable Chargers   Being a student means you will require safe-to-use and convenient gadgets to charge devices like your phone, laptop, tablet, speaker, and so on. A range of portable chargers has been developed in recent years by reputed companies to make life easier. The concept of clutch batteries or chargers that are the size of a clutch or purse is becoming increasingly popular in this era of digitization.    For students who depend on rigorous online activity as part of their academic curriculum, these allow them to charge their devices wherever they are. For charging devices iPhones, special external batteries like the Ubio Labs Shadow Series have been developed which are not only easy to carry but also stunning to look at. 9. Rocketbook Everlast smart reusable notebook  Rocketbook is a digital notebook for all those who love to write over typing. It is a useful and affordable gadget for students who have trouble taking notes on their laptops and need a notebook that can be reused and even used later to add transfer notes digitally.   It’s a popular and efficient product for college students, school students and even working professionals.    10. Anti-theft laptop bag   Want to protect your expensive laptop then get an anti-theft laptop bag to ensure maximum security for your gadgets as a student. It is an affordable bag. bag rucksack and helps you protect your precious belonging at school or college from theft.    11. External hard drive  An external hard drive is a must for every student. It helps you store all your data safely. If you are a student who uses a lot of storage on your laptop for photos, videos, college projects, or freelance work – this is the right gadget for you. It helps you protect your data from a virus on your laptop or in the event your laptop breaks down.   Hard drives come in different capacities and based on that; the product has different price points.     12. Laptop tray with fans  A laptop tray is a great addition to the list of gadgets students need. It cools down your laptop and ensures your work is not hindered because of an overheating laptop or sudden shutdown because of overuse. Make you get a laptop tray the size of your laptop.   These trays are portable and let you work on your laptop without any disturbance.     13. Folding Bluetooth keyboard  A folding keyboard is great for students who do not have a laptop. You can attach it to your phone or tablet and type away your notes or do-to lists. It's lightweight, easy to carry, and connects with your laptop, phone, iPad, or tablet with ease.   It is a great alternative for students who do not have to buy a laptop but need a writing keyword to type their assignments and projects.    14. Wi-Fi range extender  The Wi-Fi range extender is a great product for students. The Internet is man’s new best friend and a student’s savior during college. Good Wi-Fi can help you with your workload. A range extender can cover your entire house or apartment, you do not have to sit in a particular corner to get the best service.    15. Portable phone charger  Student hours are long and tiring. You may not always have a battery on your phone or a plug to charge it quickly. That’s when a portable charger comes in handy, you can charge your phone while traveling, during class, or in a car.   It is a must-buy gadget for students and working professionals.   FAQs Which gadget is best for students? Here are some gadgets for students that make their lives easier: Smartphone or Tablet Laptop or PC External Hard drive Noise Cancellation Headphones Printer Electric Kettle & Emergency Lamp Kindle External Batteries & Portable Chargers Rocketbook Everlast smart reusable notebook Anti-theft laptop bag External hard drive Laptop tray with fans Folding Bluetooth keyboard Wi-Fi range extender Portable phone charger Why are gadgets useful for students? Gadgets serve many purposes; they make our lives easier, help us stay connected with the world, and make significant life decisions. From helping with homework to traveling the world, gadgets are useful, for students for education, learning, and life experiences. What are some fun gadgets? Here are some fun gadgets for students: FitbitSmartphone or TabletLaptop or PCNoise Cancellation Headphones Conclusion Choosing the correct devices to make your student's life easier should not be a taxing chore. Make sure to devote time to saving up beforehand for each investment. Having funds dedicated to such purchases and knowing what you should purchase can make your student's life not only easier but also fulfilling. Consult an expert advisor to get the right plan TALK TO AN EXPERT
8 benefits of education loans in India

8 benefits of education loans in India

The demand for education loans has increased in India due to rising costs, increased demand for foreign education, and the need for upskilling courses or executive programs to boost career growth. While student loans may seem scary, there are many benefits of education loans that you can avail of while financing your child's higher education!    Tax break   Tax exemptions are the most incredible benefits of education loans. Under Section 80E of the Income Tax Act of India, the interest paid on education loans can be claimed as a deductible by the beneficiary. Tax benefits do not cover the principal amount of a loan but can be claimed when paying the interest amount. Parents can claim this deduction for the next 8 years from the start of payments after the moratorium period is lifted.    Moratorium period Education loan payments do not start the right way. Banks that offer education loans give you a period wherein you are not required to pay your EMI, which is called a moratorium period. T his period is generally for six months to 1 year; in exceptional circumstances, it can be more. This period is provided to help students find employment to start paying their loans without financial stress.     Attractive Interest rates   Educational loans have relatively low-interest rates than personal loans or house loans. Banks constantly compete to provide the best possible interest rates to students who need education loans. This gives students the advantage of shopping around for the best and most interest rates to reduce the final amount and quickly pay off their debt.    Zero collateral    Education loans do not require collateral in the form of an FD, land, bond, or other assets! Your child can get a collateral-free education loan to study abroad or in India. Banks assess requirements like the third-party guarantor, the parent's credit history, and your child's educational background to decide if your application is strong enough for approval. Banks also place heavy emphasis on the course and university your child is going to study.    Wide coverage   Contrary to popular belief, education loans provide blanket coverage. Education loans cover many payments like tuition fees, living expenses, and flights and help parents settle their child comfortably in a foreign land.    Additional read: Does education loans cover living expenses Cashback on Refundable Deposits   Education loans cover refundable deposits your child may have to pay during their university application process. This is not a feature offered by every education loan provider. It also depends on the loan amount and whether your loan is collateral free or dependent. Do check with your bank if you have the facility to get your money back on refundable deposits.   Secure your retirement savings   Another benefit of an education loan is that you do not have to use your savings for your child's education. If you do not have enough savings or investing stored, especially for schooling, then opt for an education loan that covers your tuition fees. The education loan amount you should be going for should be 25% of your child's total expenses. For example, if the cost is Rs. 50 lakhs, then your loan amount should be Rs. 12 to 13 lakhs.   An education loan can help you ensure quality education for your child and keep your retirement savings intact for the rainy day.   https://www.youtube.com/watch?v=4gTQkdePOWM Helps build Credit   One of the tremendous benefits of education loans is that it helps with credit building. Your child may want to buy a house in the future in a foreign country, and having a good credit history can accelerate that process. If you want your child to settle in a foreign country, then ensuring they have a good credit history is essential. Education loans can help them build a credit history with regular payments. This shows the financial institutions that you are a safe bet and trusted client for future loan applications.     A significant benefit of education loan is that it helps parents support their child's dream and build their future. Education loans are convenient if your child plans to go abroad or opt for an expensive degree in India. They provide financial support to those in need of immediate funds. Consult an expert advisor to get the right plan TALK TO AN EXPERT
How to save money by choosing the best education loan in India

How to save money by choosing the best education loan in India

Due to a lack of funding, many students are unable to pursue quality education. As a result, students who desire to continue higher education, especially at universities abroad, choose to take out an education loan. In this blog we have discussed how can you save money and study by choosing the best education loans in India. https://www.youtube.com/watch?v=4gTQkdePOWM Top banks for education loans in India Mentioned below is the list of top banks in India with interest rates for education loans: Best education loans in India Following are the best education loan in India you can opt for your children's further studies: 1. SBI education loan Additional read: Does education inflation impact student loan interest rates? 2. HDFC bank education loan 3. Punjab national bank education loan 4. Axis bank education loan What are the eligibility criteria and documentation requirements for an education loan? One must be an Indian citizen who has been admitted into an institution or university that is recognized by a competent body in India or overseas.  The candidate must have successfully finished senior high school.  Even before a student has been admitted to a university, certain banks may provide a loan. Although certain banks may do so, the Reserve Bank of India (RBI) guidelines specify that there are no higher age restrictions.  The banks want additional paperwork including the institution's acceptance letter, fee schedule, and Class X, XII, and graduation (if applicable) mark sheets.  It's also necessary to have the co-applicant's income documentation, such as pay stubs or income-tax returns (ITR). Is collateral required for financing the loan? Banks will contribute up to 100% of the loan, depending on the amount. For loans up to Rs. 4 lakh, no margin money is now necessary. The candidate is required to provide 5% of the required funding in order to study in India.  On the other hand, the required margin money for abroad studies increases to 15%. Loans beyond Rs 7.5 lakh may also require collateral from the banks. Financial institutions do not require any collateral or third-party guarantees for loans up to Rs 4 lakh.  For loans between Rs. 4 lakh and Rs. 7.5 lakh, a third-party guarantee is necessary. A security deposit is needed for loans that are more than Rs 7.5 lakh. When a loan application is granted, the banks transmit the money straight to the institution or university in accordance with the fee structure. What is the process of repayment? The person who takes out the loan for their schooling is in charge of paying it back. Repayment usually starts once the course is over. Additionally, some banks allow you a grace period of six months or a year after you graduate from school before you are required to repay your loan.  Normal repayment terms range from 5 to 7 years, however, they can potentially be extended. Over the course of the loan's payback tenure, the bank assesses a standard interest rate. By paying basic interest during the course, the student's equivalent monthly installment (EMI) burden for future repayments is decreased. How to apply for an education loan? You can visit the Education Loans page on the EduFund website and fill up a simple form. You will get all the details, along with guidance from experts in the field. Taking out a loan may seem terrifying, but if the student is dedicated and makes the most of the opportunity, it will undoubtedly pay off in the long term. Consult an expert advisor to get the right plan TALK TO AN EXPERT
Ultimate guide: Education loan for studying in the USA

Ultimate guide: Education loan for studying in the USA

Education loans for the USA have become a necessity because the cost of studying abroad is incredibly expensive. Every year Indian students travel to the USA to pursue their education at the top universities. Only some of them manage to arrange the funds, as the rest of them have to rely on education loans.  Several banks and NBFCs in India are offering education loans to interested students at reasonable rates to study in the USA.  It is essential to note that most banks do not provide 100% money for funding overseas education as 10% of the total amount has to be arranged by the aspiring student. Before applying for the loan, students should check the website of the desired university and know about the living expenses and fee structure to determine the actual amount they will need. They can use the loan eligibility calculator on the EduFund app to get a better idea about the amount they would be eligible to receive from a bank. https://www.youtube.com/watch?v=4gTQkdePOWM Education loans for the USA offered by banks  HDFC Bank Education Loan for Foreign Education – The scheme offers tax benefits, and the maximum loan amount offered is INR 20 lakhs. Oriental Bank of Commerce Education Loan for Study in India and Abroad – The loan amount depends on the fee structure of the university. SBI Student Loan Scheme – The maximum loan amount offered under this scheme is INR 1.50 crore, repaid within 15 years. Collateral is a must if the loan amount is more than INR 7.5 lakhs. Education loans for the USA offered by NBFCs Credit – the loan is offered at a floating rate of interest for 10 years. Avanse – interest rates are floating, and the processing fees are between 1 – 2% of the loan amount. Global Student Loan Corporation – this scheme does not require a co-signer. Eligibility of education loan for the USA The applicant must be a citizen of India. The co-applicants must be Indian citizens. The applicant must be 18+ years and above. Confirmed admission to a credible university in the USA. Strong academic record. Banks give preference to students studying technical or professional courses. Documents required to apply for an education loan Properly filled the application form. Admission letter from the university. The estimated cost of study. ID proof of the applicant and co-applicant. Address proof. Passport-size photographs. Income proof. Passport copy. School and university mark sheet. Documents of the qualifying exams like TOEFL, GMAT, etc. Foreign exchange permit letter. A brief statement of the assets and liabilities of the co-borrower/ guarantor/parents. Expenses covered under the education loan Tuition fees. Hostel fees. Caution fees. A refundable deposit and building fund. Laboratory, library, and examination fees. Cost of uniforms, books, instruments, and equipment. Cost of laptop if required. Traveling expenses. Insurance premium if applicable. Other expenses like projects or study tours. Repayment of education loan The terms of repayment of the education loan for the USA start after six months or one year once the borrower has secured a job or their course is complete, whichever comes first.  Tax Benefits Loan applicants can claim tax benefits and deductions only on the interest paid for seven consecutive years and not the principal loan amount under Section 80E of the Income Tax Act.  Additional read: Education loan for studying in Canada Factors to keep in mind before applying for the education loan Finalize the course and the university where you want to study.  Check the appropriate website to know about the required amount. Factor in all the expenses. Get an estimate of the total loan amount you will require. Make a list of required documents. Select a guarantor or a co-signer. Estimate the time of disbursement. How to apply for an education loan  The process of securing an education loan is time-consuming, so it is advisable to apply at the earliest possible moment.  Visit the representative of the financial institution. Check whether the study course is recognized as valid. Compare the loans provided by different banks and NBFCs based on the following parameters. Interest rate. Processing fees. Tenure or loan processing time. Expenses that are included in the education loan. Loan margin. Repayment terms. Start the education loan process immediately after submitting the application form for admission to the university.  Apply for the education loan at least three months before the date of the visa interview, as it takes time to process the education loan.   Conclusion An education loan from the USA is the best possible alternative for students who are unable to procure the required funds or scholarships for their studies in an overseas country. It helps to overcome the financial barrier of funding.  Our experts on the Edufund app can help with loan schemes up to 1 crore both in the USA and India so that you can make an informed choice. Choose from banks and NBFC partners where you do not require collateral for an amount up to INR 75 lakhs. The loan rates are low, and there are no hidden charges for a hassle-free loan approval process. Consult an expert advisor to get the right plan TALK TO AN EXPERT
How to get an education loan without collateral for MS in the US

How to get an education loan without collateral for MS in the US

Before we get into the nitty-gritty of how to get an education loan without collateral for MS in the US, let us first understand how much the MS will cost your child. How much money do you need? MS in the US is a graduate-level (master) course done over a period of 18 -24 months. These can be fast-tracked or done over a longer period if the student chooses to do this as a part-time course. The average cost of doing an MS degree typically ranges from Rs. 40 lakhs to Rs. 60 lakhs, depending on the course of study and the institution. This amount can go higher if the student opts for a private university in the USA. Once you decide on the child’s course of study and institute, the task is to get a ballpark on the costs and other travel and living expenses that your child will incur over the course duration. Considering the loans While the public sector and some large private sector banks insist on collateral for such large loans, there are several lenders in the banking and non-banking sectors today who issue education loans of large amounts without collateral. Additional read: How to repay education loans faster? Things to note when taking an education loan without collateral When you take an education loan without collateral here are a few aspects of this borrowing you must keep in mind: 1. Recognized Universities Lenders typically have a list of institutions for which they provide education loans. So you will have to ensure that the institute where your child is taking admission is on the list of most of the lenders. 2. Loans cover different parts of the expenses Some cover only tuition fees, while others may cover travel and part of the living expenses too. So when you are asking about the details, check on these facts. Expenses that are not covered in the loan will have to be borne by you. Ensure you have the reserve finances for that. https://www.youtube.com/watch?v=4gTQkdePOWM 3. Credit history matters In loans issued without collateral, the credit history of the cosigner (typically the parent) is considered. So make sure you keep your credit record clean and positive at all times. Most of these loans will also require a guarantor. You must understand that the guarantor is legally bound to make good on the payment if the student / co-borrower defaults. 4. High-interest rates These types of loans also carry a higher rate of interest ranging from 12% to up to 15% per annum. 5. Processing period Processing time in most lending companies for an education loan of this nature is quite short: 2-5 days. So once you have identified the institute and the course, and have an admission offer in hand, you can start the application process for an education loan without collateral for MS in the US. 6. Check on Scholarships You can also consider exploring the scholarships available for students planning to pursue MS in the United States. This can help ease the burden of your loan. Always visit the university website, and check if you are eligible for any monetary compensation, rewards or waivers that can help reduce your loan amount.   7. A collateral loan without property can be tough to pay off FDs, Bonds, mutual funds investments – all of these instruments are also considered as collateral, depending on the policies of the various companies. While a loan without collateral may seem easier to get in the start, it is definitely more expensive and will put a bigger debt burden on your child. Try to borrow an amount you feel comfortable paying off, be regular with your payments, and look for competitive interest rates before deciding on any one loan plan. Why are capital market investments good for you? The benefit of these instruments is that you do not need a large sum of money to invest in these at one go: which deters most families from investing in property. Small investments done regularly can go a long way in building a substantial corpus for your child’s MS in the US. Before deciding on an education loan without collateral for MS in the US for your child, make sure to read the fine print and interest rates to make a wise choice for your child’s future. Consult an expert advisor to get the right plan TALK TO AN EXPERT
What is education loan insurance? Benefits of education loan insurance?

What is education loan insurance? Benefits of education loan insurance?

Education loan has become quite common for students aspiring to study further for their higher education. But what happens when the loan applicant cannot pay the amount back? The burden of repaying then falls on the co-applicants.  Education loan insurance minimizes the financial risk of the education loan significantly. It provides the necessary backup in case things go south and the loan applicant is unable to pay the loan amount. In some cases, like terminal illness, the entire amount is paid by the insurance company instead of the co-applicants, if the primary applicant has taken the loan insurance.  What is education loan insurance? As the name suggests, it refers to the insurance taken by an applicant on their education loan. The current job market conditions, limited career opportunities, poor campus placements, local economy slowdown, and uncertainty in global economic conditions have resulted in a negative impact on the employment market.  The education loan insurance comes to the rescue if the primary loan applicant fails to repay the loan in dire situations like death, terminal illness or unemployment, etc. It also ensures that the burden of repayment does not fall on the co-applicants.  Finding the right education loan that fits your needs, as well as affordability, is confusing but not when you do it on the Edufund App. The financial team with the app provides the right guidance so that the co-applicants do not have to suffer if any misfortune falls on the primary applicant.  Is it compulsory to buy education loan insurance?  It is not compulsory to opt for education loan insurance as the requirement to do so varies from one lender to another. For loans taken from govt banks, it is not necessary for you to get insurance. However, for some private banks or organizations, you may have to get insurance as a condition to take out the loan.  Most government banks let the applicant decide on the necessity of purchasing insurance on secured education loans.  Applicants applying for abroad education loans processed by private banks and NBFCs without collateral have to buy education loan insurance. It is a mandatory requirement as the lender has not asked the applicant to pledge collateral security against the loan.  Additional read: Debt mutual fund vs FDs What is the amount charged as a loan insurance fee? The amount charged as a loan insurance fee varies from lender to lender as private lenders and government banks have different terms and conditions for the borrowers.  Government banks charge 0.5% to 1% of the entire education loan amount as an insurance fee for secured education loans. They offer loan insurance schemes via in-house loan insurance lenders.  Private banks and NBFCs charge 1.5% and 2% respectively of the entire education loan amount as insurance fees for unsecured education loans. If you are misguided or confused about the education loan insurance terms and conditions reach out to the financial advisors at the Edufund App for a consult at the earliest.  https://www.youtube.com/watch?v=4gTQkdePOWM What is the payment process for education loan insurance? Once the education loan insurance is secured, the first question that comes to mind is whether the applicant will have to pay the required loan insurance fees to the lender immediately.  The best part about the insurance is that it is not required to make a separate payment for the education loan insurance fees as the due amount is adjusted with the total amount of the education loan. For example, if the applicant has applied for an education loan of INR 30 lakhs and the insurance amount is INR 30,000 then the approved loan amount is INR 30 lakhs + INR 30,000 = INR 30.3 lakhs instead of INR 30 lakhs. The burden of paying the insurance amount does not immediately fall on the applicant. The loan insurance fees depend upon the length of the loan tenure and if the applicant wants to lower the loan insurance fees he will have to lower the loan tenure.  Benefits of education loan insurance Education loan puts a significant burden on the applicant because the financial responsibility of repayment is on him. The co-applicant is equally responsible for the total amount if any misfortune befalls the primary applicant. The benefit of purchasing education loan insurance is that the co-applicant will not have to pay the loan amount in case of non-repayment as the burden now falls on the insurance company.  Students who purchase education loan insurance get an additional 0.5% waiver on the loan interest rate. It is a relief for the applicant as the overall interest rates are reduced.  Conclusion The education loan insurance acts as a protection for the co-applicant who will not have to bear the financial burden of paying the loan amount in case of non-repayment.  Applicants who do not have comprehensive knowledge about the education loan process and the related education loan insurance can consult our team of experts on the Edufund App and know about the whole process in detail. Consult an expert advisor to get the right plan TALK TO AN EXPERT
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