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Best Student Loans In India

Best Student Loans In India

Did you know?  The education loan market in India has seen significant growth over the past decade. As of 2024, the market is valued at approximately INR 1.2 lakh crore (USD 16 billion). The Compound Annual Growth Rate (CAGR) for education loans in India has been around 12% over the last five years.  Interesting, right? But, why?  In India, education isn't just a pathway to personal growth—it's a ticket to success and a better future. With prestigious institutions and competitive programs, the demand for quality education is sky-high. However, this excellence comes at a price. Higher education costs have been steadily rising at 10% or more, making it challenging for many families to afford without financial assistance. That's where student loans come into play, bridging the gap between your dreams and reality.  This blog aims to guide you in selecting the best student loan options available in India. Whether you're aiming for an engineering degree, a medical seat, or an international MBA, This page will provide you with insights and tips to ensure you make an informed choice. Let's dive in and find the perfect loan to fuel your educational journey!  What is a student loan?  A student loan is financial aid specifically for education expenses. It covers tuition, books, and living costs. In India, banks and financial institutions offer these loans. The interest rates for student loans in India range from 8% to 15%. As of 2023, over 3.5 lakh students avail student loans annually.  The loan amount depends on the course and institution. For studies in India, the maximum loan amount is ₹10-15 lakhs. For international studies, it can go up to ₹80 lakhs or more.  Repayment usually starts after the course completion. There is a moratorium period, typically 6 months to a year. During this period, repayment is not required. Student loans can be secured or unsecured. Secured loans need collateral, while unsecured loans do not.  Student loans are a crucial tool to make higher education accessible. They ensure that financial constraints don't hinder your educational goals.  Types of student loans available in India  Secured vs. Unsecured Loans  Secured loans require collateral, such as property or fixed deposits. They usually offer lower interest rates and higher loan amounts. Unsecured loans don't need collateral but may have higher interest rates and lower loan limits. Both types have their advantages, and the choice depends on your financial situation and risk tolerance.  Feature Secured Loans Unsecured Loans Collateral Required Not required Interest Rates Lower (6%-12%) Higher (10%-15%) Eligibility Criteria Stricter due to collateral requirement More lenient Approval Time Longer due to collateral verification Quicker Secured vs. Unsecured Loans  Government vs. Private Loans  Government loans are offered by public sector banks and come with subsidized interest rates. They often have favorable terms, especially for economically weaker sections. Private loans are provided by private banks and financial institutions. They offer more flexibility but may have higher interest rates. The choice between the two depends on your eligibility and specific needs.  Feature Government Loans Private Loans Provider Public sector banks and government schemes Private banks and financial institutions Interest Rates Lower and subsidized Higher, varies by lender Flexibility Less flexible, strict criteria More flexible, varied criteria Subsidies/Benefits Often available for economically weaker sections Sometimes offered Processing Time Generally, longer Usually faster Government vs. Private Loans  Key student loan features  Loan Amount and Coverage  Student loans in India can range from ₹1 lakh to ₹1 Cr or above, depending on the course and institution. Coverage may include tuition fees, accommodation, living expenses, books, travel cost, and supplies.  Tuition Fees: The primary component of student loans is tuition fees, which can be up to 100% of the total course cost. This ensures you can focus on your studies without financial worry.  Accommodation and Living Expenses: Loans also cover accommodation costs, whether on-campus or off-campus. Living expenses like food, travel, and daily necessities are included, often up to ₹1-2 lakhs per year.  Books and Supplies: Books, study materials, and essential supplies are covered under student loans. This can amount to ₹50,000 to ₹1 lakh per year, depending on the course requirements.  .  Interest rates Interest rates for student loans in India range from 8% to 15%. The rate depends on the lender, loan type, and borrower’s credit profile Fixed vs. Variable Rates  Fixed rates remain constant throughout the loan tenure, providing predictability in repayments. Variable rates fluctuate with market conditions, which can be beneficial or risky depending on economic factors.  FeatureFixed Interest Rate Variable Interest RateInterest Rate StabilityInterest rate remains constant throughout the loan termInterest rate fluctuates based on an underlying benchmark or indexLoan PaymentsPredictable and consistentVary based on interest rate changesFlexibilityLess flexible if borrower wants to change terms or exit the loan earlyMore flexible, but with greater risk of rate changesInitial RateGenerally higher than variable ratesOften lower than fixed rates, especially for introductory periodsRiskLower risk due to predictable paymentsHigher risk due to potential rate changesLoan TermsAvailable for various terms, from 6 months to 10 yearsTypically available for shorter terms, such as 5/1 or 7/1 ARMsForecastingEasier to forecast cash flow due to predictable paymentsMore challenging to forecast cash flow due to changing ratesAttractive FeaturesPredictable payments, flexibility in loan termsAttractive introductory rates, lower initial ratesDisadvantagesHistorically more expensive over the life of the loanGreater risk of rate changes, potentially higher total cost Subsidized vs. Unsubsidized Interest  Subsidized loans have the government paying the interest during the study period. Unsubsidized loans require the borrower to pay all the interest, even during the study period.  FeatureSubsidized LoansUnsubsidized LoansInterest PaymentGovernment pays interest while borrower is in school, during the 6-month grace period, and during deferment periodsBorrower is responsible for paying interest from the time the loan is disbursedEligibilityAvailable to undergraduate students who demonstrate financial needAvailable to both undergraduate and graduate students, regardless of financial needInterest RateFixed rate of 4.99% for undergraduate students, disbursed between July 1, 2022 and June 30, 2023Fixed rate of 4.99% for undergraduate students, disbursed between July 1, 2022 and June 30, 2023; 6.54% for graduate studentsRiskLower risk due to government-paid interestHigher risk due to borrower responsibility for interest paymentsForecastingEasier to forecast cash flow due to predictable interest paymentsMore challenging to forecast cash flow due to changing interest ratesFlexibilityLess flexible if borrower wants to change terms or exit the loan earlyMore flexible, but with greater risk of rate changes Repayment Terms and Options  Repayment typically starts after the course completion, with a moratorium period of 6-12 months. Options include standard EMIs, step-up EMIs, or flexible repayment schedules based on the borrower’s income.  Grace Period  Grace period The grace period is a post-study duration during which repayment is not required, usually 6-12 months. This allows graduates time to secure a job before starting repayments.  Loan Tenure  Loan tenure can vary from 5 to 15 years, depending on the loan amount and repayment capacity. Longer tenures reduce EMI amounts but increase total interest paid.  EMI (Equated Monthly Installment) Options EMI options include standard fixed EMIs, where the amount remains constant. Some lenders offer step-up EMIs, which start low and increase over time, matching the borrower’s growing income.  Eligibility criteria for student loans in India Eligibility criteria for student loans in India typically include factors such as admission to recognized courses, Indian citizenship, and specific age limits. Financial institutions assess applicants based on academic performance, course accreditation, and co-applicant guarantees. Basic eligibility requirements for students Students must be Indian citizens to qualify for student loans in India. Additionally, they should have a strong academic record and a clear career plan.  Age Limits:  Most lenders require students to be between 18 and 35 years old. This range ensures the borrower is mature enough to manage the loan and its repayment.  Academic Qualifications:  Applicants must have completed their higher secondary education (12th grade). They should also have a consistent academic record with no gaps in their education.  Admission to Recognized Institutions: Students must have secured admission to recognized institutions in India or abroad. This includes universities, colleges, and professional courses approved by the relevant authorities.  Co-applicant Requirements:  A co-applicant, usually a parent or guardian, is mandatory for most student loans. The co-applicant shares responsibility for loan repayment, adding an additional layer of security for the lender.  Role of Parents/Guardians:   Parents or guardians often act as co-applicants, providing financial backing. Their involvement is crucial, especially for securing higher loan amounts or better terms.  Financial Stability and Credit History of Co-applicant:  The co-applicant’s financial stability and credit history significantly impact loan approval. A good credit score (typically 700 or above) and stable income increase the chances of loan approval and better interest rates.  Comparing the best banks for student loans in India  Here’s a comparison of student loans offered by some of the top banks in India.  Bank/Institution Interest Rate* Loan Amount Repayment Tenure Processing Fee Collateral Requirement Moratorium Period State Bank of India (SBI) 7.50% - 10.75% Up to ₹1.5 crore Up to 15 years Up to ₹10,000 Required for loans above ₹7.5 lakh Course duration + 1 year HDFC Bank 9.55% - 13.25% Up to ₹40 lakh (can be higher for premier institutes) Up to 15 years Up to 1% of loan amount Required for loans above ₹7.5 lakh Course duration + 1 year ICICI Bank 10.25% - 11.75% Up to ₹1 crore Up to 10 years Up to 1% of loan amount Required for loans above ₹7.5 lakh Course duration + 6 months Axis Bank 10.50% - 13.00% Up to ₹75 lakh Up to 15 years Up to 1.5% of loan amount Required for loans above ₹4 lakh Course duration + 1 year Punjab National Bank (PNB) 8.75% - 10.50% Up to ₹1 crore Up to 15 years Up to 1% of loan amount Required for loans above ₹7.5 lakh Course duration + 1 year Bank of Baroda 7.85% - 10.25% Up to ₹1 crore Up to 15 years Nil for loans up to ₹4 lakh, otherwise up to 1% Required for loans above ₹7.5 lakh Course duration + 1 year Canara Bank 8.75% - 10.50% Up to ₹40 lakh (can be higher for premier institutes) Up to 15 years Up to 1% of loan amount Required for loans above ₹7.5 lakh Course duration + 1 year Avanse Financial Services 11.75% - 16.00% Up to ₹1 crore Up to 12 years Up to 1% of loan amount Required based on loan amount and institute Course duration + 6 months Credila (HDFC Credila Financial Services) 11.85% - 13.75% Up to ₹1 crore Up to 10 years Up to 1.5% of loan amount Required based on loan amount and institute Course duration + 1 year InCred Education Loan 11.75% - 14.00% Up to ₹1 crore Up to 15 years Up to 1% of loan amount Required based on loan amount and institute Course duration + 6 months  *The interest rates are subject to change and may vary based on the profile of the borrower, co-applicant, and the institution/course of study.  How to apply for an education loan in India  Here are simple steps you can use to apply for a student loan -  Research and Compare Loan Options: Evaluate various banks and loan schemes for the best interest rates and terms.  Documents Required for Student Loan: Gather necessary documents like admission proof, income proof, identity, and address verification.  Fill Out the Loan Application Form: Complete the application form accurately with all required details.  Submit the Application and Documents to the Bank/ loan provider: Provide the filled form and documents to the chosen bank.  Loan Processing and Approval: The bank reviews the application and verifies the documents.  Disbursement of the Loan Amount: Upon approval, the bank disburses the loan amount directly to the institution or as per agreed terms.  How to apply for an education loan in India  Choosing the right student loan can greatly impact your financial well-being. Here are some tips to help you make an informed decision:  Compare Interest Rates and Total Cost: Look beyond just the interest rate; consider the total cost of the loan over its tenure.  Check for Hidden Charges and Fees: Be aware of any processing fees, prepayment penalties, or other hidden charges that may affect the overall cost.  Understand Repayment Terms and Flexibility: Ensure you understand the repayment schedule, EMI amount, and any flexibility in repayment options.  Consider the Reputation and Customer Service of the Lender: Choose a lender with a good reputation for customer service and transparent policies.  Evaluate Additional Benefits: Look for loans that offer additional benefits like interest subsidies for certain categories of students or moratorium periods post-course completion for job search or further studies. These benefits can significantly reduce your financial burden in the long run.  Benefits of choosing EduFund for your student loan  Although we’ve talked about how you can choose the best student loan in India, let us give you a shortcut to that – EduFund!  Book a FREE consultation Here’s what we can offer you!  Loan Features What EduFund Offers Competitive Interest Rates EduFund offers competitive interest rates starting from 5.5%. No Processing Fees No processing fees, ensuring you save on upfront costs. Flexible Repayment Options Customizable repayment plans based on your financial situation. Quick and Easy Application Process Streamlined application process for faster loan approval. Pre-Approved Loan Offers Pre-approved loan offers based on your eligibility. Expert Loan Advisors Access to expert loan advisors for guidance and support. Online Account Management Convenient online account management for loan tracking. Additional Benefits Additional benefits like interest subsidies and tax benefits.  Choosing the right student loan is pivotal for a successful academic journey. With careful research, comparison, and consideration of factors like interest rates, repayment terms, and lender benefits, you can make an informed decision.  
DSP Banking & PSU Debt Fund 

DSP Banking & PSU Debt Fund 

One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant.  The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries. Let us talk about their – DSP Banking & PSU Debt Fund.  About the DSP Banking & PSU Debt Fund  Investment Objective: The primary investment objective of the scheme is to seek to generate income and capital appreciation by primarily investing in a portfolio of high-quality debt and money market securities that are issued by banks and public sector entities/undertakings.  However, there is no assurance that the investment objective of the scheme will be realized.   Asset Allocation Pattern  This fund allocates 80% - 100% in money market and debt securities issued by banks and public sector undertakings, public financial institutions and Municipal Bonds.  It also allocates up to 20% in Government securities, other debt and money market securities including instruments/ securities issued by non-banking financial companies (NBFCs).    Portfolio Composition  The portfolio holds 95.68% in debts and 4.32% in cash & cash equivalent. The fund invests in high quality debt securities of banks & public sector companies.  Note: Data as of 30th April. 2024. Source: Value Research  Top 5 Holdings of DSP Banking & PSU Debt Fund  Name Instrument Weightage % HDFC Bank Ltd SR US004 Debenture 7.65 25/05/2033 Debenture  6.67 National Bank for Financing Infrastructure and Development SR NABFID.43 Debenture 16/06/2033 Debenture 6.63 Small Industries Devp. Bank of India Ltd SR IV Bonds 7.79 19/04/2027 Bonds 5.43 State Bank of India SR I Debenture 7.81 02/11/2038 Debenture 4.82 Indian Railway Finance Corporation Ltd SERIES 129 Debenture 8.45 04/12/2028 Debenture 4.27 Note: Data as of 30th April. 2024. Source: Value Research Performance   DSP Banking & PSU Debt Fund CRISIL 10 years Gilt Index  CAGR (%) CAGR (%) 1 Year 6.89 6.23 3 Years  5.22 3.7 5 Years 7.00 6.04 Since Inception 7.92 6.67 Note: Data as of 30th April, 2024. Source: Value ResearchThe fund was launched on 14th Sept. 2013.  Fund Manager  Shantanu Godambe has been managing this fund since June 2023. He has 16 years of rich experience in this field.   Karan Mundhra has been managing this fund since July 2023. He has total 16 years of experience in this field.  Who Should Invest in DSP Banking & PSU Debt Fund?  Consider this fund if you  Are a relatively new debt market investor.  Are willing & able to remain invested for at least 3 years.   Diversify your portfolio of FDs.  Start Investing for your Child's Education! Why Invest in this Fund?  It earns potentially stable & consistent investment income.  The fund manages high quality portfolio.  It is a credible alternative to a single 3-year bank FD.  Active management by managers can aid in generating alpha over FDs.  Time Horizon  One should look at investing for a duration of at least 3 years.   Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The DSP Banking & PSU Debt Fund is a good option for those who are new to debt market and wants to invest in an alternative to FDs . The fund has consistently outperformed its benchmark in since inception.   Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only. 
Tata Nifty 50 Index Fund 

Tata Nifty 50 Index Fund 

Tata Asset Management Private Limited (TAMPL) manages investments of Tata Mutual Fund. TATA is one of the pioneers of the Indian Mutual Fund Industry. With an average AUM of almost Rs 1.5 Lakh crore, the AMC is among the oldest in the country. It has a track record of 30 years in investment management.   Let us get to know about – Tata Nifty 50 Index Fund.  About Tata India Consumer Fund  Investment Objective – It is an open-ended equity scheme tracking Nifty 50 Index. The investment objective of the scheme is to reflect/mirror the market returns with a minimum tracking error. However, the scheme does not assure or guarantee any returns.    Investment Philosophy The scheme is a passively managed index fund which will employ an investment approach designed to track the performance of Nifty 50 Index.   The scheme seeks to invest in securities constituting the Nifty 50 Index in same proportion as in the index. It will invest at least 95% of its total assets in the securities comprising the underlying index.  The scheme may also invest in money market instruments to meet the liquidity and expense requirements.  Portfolio Composition  The portfolio comprises 99.86% allocation in Equity and the remaining 0.14% is held in cash and cash equivalents.   Top 5 Holdings for Tata Nifty 50 Index Fund   Name Sector Weightage % HDFC Bank Financial 11.46 Reliance Ind Energy & Utilities 9.95 ICICI Bank Financial 8.10 Infosys Technology 5.08 Larsen & Toubro Industrials 4.26 Note: Data as of 30th April, 2024. Source: Value Research  Performance Since Inception  Period Tata Nifty 50 Index Fund return (Annualised) (%) Benchmark (%) 1 Year 25.87 26.27 3 Years  16.61 16.92 5 Years 14.95 15.30 Since Inception 13.53 13.85 Note: Data as of 30th April, 2024 Benchmark: Nifty 50 TRI, Inception date: 25th February, 2003 Source: tatamutualfund.com  Start Investing for your Child's Education! Fund Manager The fund is managed by Mr. Sonam Udasi and Mr. Kapil Menon. Mrr Sonam Udasi is backed with 25 years of his expertise in Equities Research is presently the Senior Fund Manager for multiple equity schemes at Tata Asset Management, since 1st April, 2016. He has joined TATA Asset Management Pvt. Ltd. As Head of Research in April 2014   Who Should Invest in Tata Nifty 50 Index Fund?  This fund is suitable for Investors  Who are seeking Long Term Capital Appreciation.  Who would like to invest in passively managed fund investing in a diversified portfolio of well-known companies as represented by Nifty 50 Index.  Ideal Time to Stay Invested   A minimum investment period here is 3 to 5 years.   Conclusion  Index funds can be a prudent investment option given the limited possibility of alpha generation in the large cap sector. If your investment horizon is long and want to participate in India’s growth story by investing in well-diversified portfolio of well-known large cap companies comprising the index you can consider looking at this fund.  Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only. 
Decoding the Sanction Letter for an Education Loan

Decoding the Sanction Letter for an Education Loan

The wait is over! You've persevered through the application process, and your dedication has paid off. You're holding the key to unlocking your educational dreams - the education loan sanction letter. This official document from your lender confirms their approval for your loan, and it's a significant milestone on your academic journey. But what exactly does this letter entail, and what are the next steps? This blog will guide you through understanding your education loan sanction letter and navigating the path towards utilizing it effectively. What is a Sanction Letter? The education loan sanction letter is a formal agreement outlining the critical details of your loan. Here's a breakdown of the key information you'll find: Loan Amount: This is the total sum approved by the lender to finance your education. Interest Rate: This determines the cost of borrowing the loan, expressed as a percentage of the principal amount. It's crucial to understand if it's a fixed or floating rate. Loan Tenure: This refers to the total period you have to repay the loan, typically ranging from 5 to 10 years after a moratorium period (explained later). Margin/Down Payment: Some lenders may require a certain percentage of the total cost to be paid upfront by you or your co-applicant. Repayment Schedule: This specifies the amount and frequency of your loan installments. It could be monthly, quarterly, or as per the lender's terms. Guarantor Details (if applicable): If required, the letter will mention the guarantor's name who acts as a financial backup in case of repayment defaults. Disbursement Process: This outlines the steps and conditions for receiving the loan amount. It might be directly deposited into the institution's account or credited to your account. Terms and Conditions: This section details the entire agreement, including prepayment charges, late payment penalties, and other crucial aspects. Read this thoroughly and understand all the implications. Also Read: Is collateral important for an education loan? Beyond the Basics: Important Considerations Review and Acceptance: Carefully review the sanction letter to ensure all details, like the loan amount, interest rate, and tenure, match your application and expectations. If there are any discrepancies, contact your lender for clarification before accepting the terms. Documentation Completion: You might need to submit additional documents, such as college fee receipts or visa confirmation, to fulfill the disbursement conditions. Ensure you have these documents in order to avoid delays. Compare and Explore: While the sanction letter signifies approval, it might not be the final word. It's wise to compare offers from other lenders and see if you can secure a better interest rate or more favorable terms. Financial Planning: The loan amount might not cover all your expenses. Factor in living costs, books, and other miscellaneous fees. Create a realistic budget to manage your finances effectively during your studies. Utilizing Your Education Loan Wisely An education loan is an investment in your future. Here's how to make the most of it: Spend Wisely: Disbursed funds should be strictly used for educational purposes - tuition fees, accommodation, books, and other essential study-related costs. Avoid unnecessary or extravagant spending. Scholarship and Grants: Explore scholarship opportunities and grants that can ease your financial burden. Reducing your loan amount translates to lower repayment pressure in the long run. Part-time Work (if allowed): Depending on your study schedule and visa regulations, consider taking on part-time work to manage your living expenses and potentially reduce your loan dependence. Looking Ahead: Repayment Strategies Understand the Repayment Process: Familiarize yourself with the repayment schedule and ensure timely payments to avoid late fees and maintain a good credit score. Start Early: While a moratorium period (a grace period before repayment starts) exists, consider making small, interest-only payments during this time to reduce the overall loan burden. Post-Graduation Planning: Develop a solid post-graduation plan to secure a well-paying job that allows you to comfortably manage your loan repayments. Conclusion The education loan sanction letter is a stepping stone towards achieving your academic goals. By understanding its contents, planning your finances meticulously, and utilizing the funds responsibly, you can turn this loan into an investment that propels you towards a successful future. Remember, knowledge is power, so don't hesitate to seek clarification from your lender or a financial advisor if you have any doubts. With careful planning and hard work, you can transform this loan into a springboard for a bright future.
Age Limit for Education Loans in India

Age Limit for Education Loans in India

Did you know education loans sector saw a record 20.6% surge in April-Oct last year? The demand for education loans in India is rapidly rising; more and more students in India are opting for this financial tool to advance in their careers and pursue their dreams. But there is a host of misconceptions around education loans, confusion around age limit for education loans is one of the most basic misconception we have encountered. Let's address this query in this blog and help Indian students understand education loans as a product so they can maximise it! The Minimum Age for Borrowing Generally, the minimum age to apply for an education loan in India is 16. Indian students can opt for education loans after school for their undergraduate, postgraduate, and professional studies. Also Read: How to get an education loan for Engineering? The Upper Age Limit: Understanding the Nuances There's often more ambiguity around the upper age limit. While some banks might not explicitly mention a maximum age, they often set a criterion where the borrower's age plus the loan repayment tenure should not exceed a certain limit. This is because banks assess the borrower's repayment capacity, and with age comes considerations like retirement. Here's a realistic range to consider: 16 to 35 years: This range is commonly applied by many banks. It offers a reasonable window for students to complete their education and establish themselves professionally before significant loan repayments begin. Variations beyond 35 years: Some banks may extend the upper limit based on specific loan schemes or the co-applicant's profile. For instance, an employed parent with a strong financial standing might improve the eligibility of a student applicant above 35. Exceptions and Considerations Property-backed loans: If you are securing your education loan with collateral like property, some banks might raise the upper age limit. This additional security can mitigate the risk associated with a longer repayment period. Government schemes: Specific government scholarship programs or loan schemes designed for underprivileged sections might have different age limitations. It's crucial to check the program guidelines. Planning for a Smooth Application: Start Early: Research loan options and eligibility criteria well in advance. If you fall outside the typical age range, explore alternative lenders or government schemes that better suit your situation. Strong Academics: A good academic record strengthens your loan application and can sometimes influence the lender's decision, especially for borderline cases. Co-applicant Advantage: Having a co-applicant with a stable income source, typically a parent or guardian, significantly bolsters your application. Their financial standing improves the bank's confidence in timely loan repayment. Collateral Advantage: Having a collateral attached to your loan application can increase your chances of getting an education loan. A collateral is secuity that tells the lender that you are a safe bet! Explore Alternatives: If you don't meet the age criteria or face loan application hurdles, consider scholarship opportunities, education grants, or part-time work options to partially finance your education. Also Read: Education Expenses Covered by Education Loans Remember: Age is just one factor considered by lenders. A strong academic profile, a co-applicant with a healthy income, and a well-structured loan repayment plan can significantly improve your chances of securing an education loan even if you are nearing the upper age limit. While age is a part of the education loan eligibility puzzle, it's not the only piece. By understanding the nuances, exploring options, and planning strategically, you can increase your chances of securing the financial support you need to achieve your academic goals. Don't let age become a barrier on your path to success. Must Read: Avoid these Common Mistakes in your Education Loan Process! FAQs Can I get an education loan at the age of 40? There is no specific upper age limit for education loans. The eligibility criteria differ from bank to bank and lender to lender. Your eligibility is determined by a host of factors, such as your academic record, borrowing capacity, repayment capacity, co-applicant and personal credit history, and more. Who is eligible for an educational loan? Students and working professionals looking to advance their careers are eligible for an education loan. Eligibility for an education loan is an academic record, credit history, co-applicant profile, work experience, age, intended course and university, and much more! What is the age limit for loans in India? The minimum age limit for education loans in India is 16 years. There is no upper limit. Can I get 45 lakh education loan? Yes, it is possible to get an education loan for ₹40 lakhs without any collateral. The amount is determined by the
UTI Dynamic Bond Fund 

UTI Dynamic Bond Fund 

UTI is one of the pioneers of the Indian Mutual Fund Industry. With a total AUM Rs 15.56 lakh crore the AMC is among the most trusted names in the mutual fund space. The UTI Mutual Fund offers products across asset classes.   Let us talk about the – UTI Dynamic Bond Fund.  About UTI Dynamic Bond Fund  Investment objective – The scheme's primary objective is to generate optimal returns with adequate liquidity through active management of the portfolio, by investing in debt and money market instruments across duration.   Note: There is no assurance or guarantee that the investment objective of the scheme would be achieved.   Investment Process   The Fund aims to earn accrual income by investing its assets in debt instruments. It follows tactical allocation to invest among corporate debt, government securities (G-Sec), guided by the fixed income strategy of the fund manager.  Source: UTI MF  Portfolio Composition  Currently the dynamic bond fund allocation comprises 89.63% in debt fund and 10.36% in cash & cash equivalents.   Top 5 Holdings for UTI Dynamic Bond Fund  Name Sector  % GOI Sec 7.10 08/04/2034 GOI Securities 41.88 GOI Sec 7.18 24/07/2037 GOI Securities 21.80 GOI Sec 7.37 23/10/2028  GOI Securities 8.82 GOI Sec 7.18 14/08/2033 GOI Securities 8.75 Power Finance Corporation Ltd SR 223 Debenture 7.64 22/02/2033 Debenture 4.40 Note: Data as of 30th April. 2024. Source: Value Research  Start Investing for your Child's Education Performance Since Inception  Period UTI Dynamic Bond Fund (%) CRISIL Dynamic Bond A-III Index (%) CRISIL 10 Year Gilt Index (%) 1 year 6.17 6.37 6.24 3 years 9.85 4.99 3.70 5 years 6.90 7.42 6.04 Since Inception 7.70 7.86 6.22  Note: Fund performance since launch; Inception Date – 16th June.2010 to 30th April 2024. Returns are of direct plan.  Source: UTI MF  Fund Manager  The fund is managed by Mr. Sudhir Agarwal holds who holds a degree of M.com, PGDBA(Finance) and CFA charter from The CFA Institute, USA.  He is Executive Vice President and Fund Manager – Fixed Income at UTI AMC Ltd. He joined UTI AMC in 2009 after 4 years of experience. He has been managing this scheme since December 2021 and has previously worked with CARE (Credit Analysis and Research Ltd.), Transparent Value LLC and Tata Asset Management Company Ltd in different roles.  He is fund manager managing various debt schemes.   Who Should Invest?  Investors looking to capitalize on interest rate movement along with reasonable returns and adequate liquidity.   Investors seeking to do asset allocation across various asset classes.   Investors who want to build their medium-term debt portfolio in an uncertain environment.  Investors having a moderate risk appetite with short term investment horizon can explore this fund.  Why Invest?  The fund dynamically manages duration by investing across the yield curve in response to the change in market environment.   It maintains a diversified portfolio of bonds, debentures and government securities.   It seeks to invest across different maturities and credit ratings to optimize returns with commensurate risk.   The fund intends to maintain adequate liquidity through active management of the portfolio.  Time Horizon  Investors with a time horizon of one to three years may consider this fund.   Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  UTI Dynamic Bond Fund has provided consistent higher annualised return than category average for the past 1 Year, 3 Years and 5 Years. The fund is having moderate risk so investors can explore this as an alternative to traditional instruments like fixed deposits for long term capital appreciation.  Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only. 
Importance of Family Budgeting

Importance of Family Budgeting

Families constantly juggle expenses, unexpected bills, and financial goals that can leave them feeling stressed and financially vulnerable. However, there is a powerful tool that can help us regain control and transform our relationship with money: Family Budgeting. It goes beyond just numbers; family budgeting holds the potential to not only empower our finances but also strengthen the bonds that tie our family together. https://www.youtube.com/watch?v=tdwqQH0xkFw Importance of family budgeting 1. Securing financial stability  A family budget often serves as a roadmap to financial stability and security, paving the way for a brighter future. By establishing a comprehensive budget, you gain a clear understanding of your income, expenses, and savings. This knowledge helps and empowers you in making informed decisions about ensuring that your family's needs are met while setting aside funds for emergencies, spending and saving, and future goals.  A budget acts as a safety net, providing peace of mind in cases of financial uncertainty, knowing that you have a plan in place to weather any storm that comes your way. What is the 15 * 15 * 15 Rule in Mutual Funds? Read More 2. Deciding long-term and short-term goals The process of budgeting allows you to define your financial goals as a family and work in a direction to achieve them together. Whether it's saving for a dream vacation, purchasing a new home, or planning for your children's education, a budget helps allocate funds toward these aspirations. The process of setting goals and tracking progress in stills a sense of purpose and direction within the family.  By involving the entire family in the budgeting process, everyone gains a sense of ownership and motivation to stay committed to the goals. This collaborative approach fosters a shared sense of purpose and strengthens family bonds as you work towards a common vision. https://www.youtube.com/watch?v=lyFMznQdbwo 3. Teaching your kids financial responsibility One of the greatest gifts for your children that you can give is the knowledge and skills for managing money effectively. By having their involvement in the budgeting process, you create an opportunity for them to learn valuable lessons about financial responsibility. From an early age, children can grasp the concept of budgeting and develop healthy spending habits. Also, by including them in discussions about family finances, they get a deeper understanding of the value of money and the importance of making thoughtful financial choices. This not only equips them with essential life skills but also strengthens the parent-child relationship through open and honest conversations about money. https://www.youtube.com/watch?v=sNqwEZbjEvc 4. Striving for transparency in budgeting  Family budgeting promotes open communication and transparency within the household. Regular budget meetings provide a platform for family members to discuss financial matters, voice concerns, and make joint decisions. This creates an environment of trust and cooperation, allowing everyone to contribute their ideas and suggestions. Through these discussions, you can address any financial conflicts or challenges that arise, fostering a culture of open dialogue and problem-solving. By working together as a team, you not only improve your financial situation but also build stronger bonds within the family, rooted in trust and shared decision-making. https://www.youtube.com/shorts/Zsd3-9_6H1o 5. Cultivating financial discipline Budgeting requires discipline and self-control, qualities that extend beyond financial matters. When you adhere to a budget, you cultivate discipline and develop a strong sense of accountability. These traits have a ripple effect, positively influencing other areas of life such as work, education, and personal relationships. By instilling financial discipline within your family, you impart valuable life skills that will benefit your loved ones for years to come. The process of budgeting teaches patience, delayed gratification, and responsible decision-making, equipping family members with the tools they need to navigate the complexities of the modern financial landscape. 5 Pro Tips for Creating a Child Education Fund Read More 6. Reduces stress and improves your well-being Financial concerns can be a significant source of stress within a family unit. Budgeting helps alleviate this stress by providing a sense of control and predictability. With a budget in place, you can reduce debt, plan for future expenses, and prioritize savings. As financial worries decrease, family members can focus on enjoying quality time together, strengthening their emotional bonds, and experiencing an overall improvement in well-being. The knowledge that you have a plan in place to handle financial challenges brings a sense of security and peace, enabling you to fully embrace the joys and opportunities that life has to offer. How long should you invest in SIP? Read More 7. Gives your emergency blanket  Life is unpredictable, and unexpected expenses can arise at any moment. Family budgeting allows you to prepare for these emergencies by setting aside funds in an emergency savings account. This ensures that your family is better equipped to handle financial shocks without jeopardizing your long-term goals. By having a safety net in place, you can face unforeseen circumstances with confidence, knowing that you have taken proactive measures to protect your family's financial future. This not only gives a sense of security but also strengthens the family's resilience, fostering a mindset of preparedness and adaptability in the face of challenges. Join our robust WhatsApp Community that helps parents invest! Family budgeting is more than just crunching numbers and tracking expenses. It is a transformative process that empowers your finances while nurturing strong bonds within your family. By creating a budget together, you embark on a journey of financial stability, goal achievement, and personal growth.
Best way to invest $1000 for a Child

Best way to invest $1000 for a Child

There are numerous options available for adults if they are looking for the best way to invest $1000 for a child. Every parent wishes to give a comfortable, secure, and stable life to his child, and what better way than investing on his behalf from an early age?  Investments are what drive your savings because of the compounding factor. $1000 is a good amount for investment hence you can take the help of endless opportunities to create a sizable nest egg from it. Identify your financial goals and how much time you have in hand before investing. As a rule, when the timeline is short the risk involved is also less and so are the returns. Conversely, longer timelines mean higher risk and greater growth.  Investing $1000 early will help the small amount to grow into a significant corpus. Assuming that the expected average long-term return is 10% then the $1000 will result in a nearly $490,370 portfolio by the time a child will need the money in his retirement age. Take the help of the investment calculator at the Edufund App to know how much amount you can expect for your child with a $1000 investment. Best opportunities to invest $1000 for a child Custodial account A custodial account can be opened by an adult on behalf of a child at an investment firm or a bank. The child is the beneficiary of the account which is handled by the legal adult who opens and operates the account until the child achieves maturity and comes of legal age.  The funds that grow through the custodial account can be used for any purpose by the child when he becomes the legal holder.  You can open a custodial account with Edufund App, an investment platform to secure your child’s financial future with a sum of $1000. Funds can then be invested in a diversified portfolio of assets to achieve the best returns. Different types of assets for a $1000 investment through a custodial account. 1. ETFs and index funds Index funds structured as ETFs and mutual funds help to invest in several companies at once. Index funds with low fees are the best options when the investment is through the custodial account.  For investors who are fond of taking risks to gain higher returns one of the best investment options available with $1000 is the direct equity fund. Growth stocks often yield very high profits than average equity but they have to be invested for a longer period hence choose growth equity funds for your child. 2. Individual stocks If you are not interested in the overall stock market invest $1000 in individual stock that has shown consistent returns over the years. 3. Savings bonds Saving bonds are traditional monetary gifts considered safe investments for a child. The volatility of the stock market does not have any impact on it so people looking for safe and secure investments find the savings bond lucrative options. Purchase savings bonds from private companies, utilities, and municipalities. Other investment opportunities 1. Bank fixed deposits Fixed Deposits can be a good investment opportunity for a child if you are looking for a low-risk safe and secured one-time option. Most banks offer special FD schemes for children without the option of premature withdrawal. 2. Insurance policies Choose children-specific insurance policies with life cover and death benefits. The adult who is the policyholder has to pay a sum, for instance, $1000 once and at maturity the total amount which has been compounded over the years is returned as a lump sum.  3. One-time child investment plans Invest $1000 in one-time child investment plans as early as possible so that you can get back a lump sum amount after a pre-decided period. One-time child investment plans are considered beneficial as they are safe and secured investments.  There are several options open for you that will offer better returns along with death benefits. If you are unable to decide on a specific investment plan then take the help of Edufund App and its partner banks to purchase a child investment plan that will give the best possible returns.  Conclusion A newborn child has several years before the need to access the funds will arise so it is prudent for parents to think about the best way to invest $1000 for a child and secure his future to some extent.  Take the help of the EduFund App and create a financial plan where as parents you can make investments for the child in your name. Just sign up for an account, select a portfolio from several options like US funds, mutual stocks, gold, ETFs, etc. and start your investment with $1000. Join our robust WhatsApp Community that helps parents invest!
How to raise a child and how much money do you need?

How to raise a child and how much money do you need?

Although nothing compares to the delight of having a child, raising a child, and giving him or her, it comes at a high cost. Parenting involves a significant financial commitment and emotional and physical investment. Raising a child in India is challenging and expensive. If you are wondering how much money does it take to raise a child in India? List of major expenses for child education plans 1. School expenses  Children's schooling and extracurricular activities take up a huge chunk of a parent’s annual income. Over 65% of parents spend at least half of their annual income on schooling. Every parent wants the best education for their child, even if it means that they occasionally struggle to make ends meet owing to escalating school costs.   A private school charges between 50,000 to 2 lakh rupees annually. In the 12 years between Classes I to XII, there would be an outlay of between 11 to 43 lakh rupees, assuming a 10% annual inflation rate for schooling. This fee is in addition to any tuition or extracurricular activities the child will enroll in.  2. College expenses  College expenses are a big part of how much money it takes to raise a child in India. Indian parents are most concerned about rising college costs, which constitute a major expense. The average cost of an engineering degree ranges from ₹12 to ₹15 lacs today; it will cost about ₹42 lacs to ₹50 lacs in around 15 years. In the same vein, it is reasonable to predict that in 15 years, a medical degree will cost more than one crore if it costs ₹30 to ₹40 lacs today. Although parents may choose to use student loans to pay for more expensive studies, the interest rate still remains high even after-tax exemptions. Top best child investment plans in India Read More 3. Miscellaneous expenses Miscellaneous expenses are important to consider when estimating exactly how much money it takes to raise a child in India. Up to the age of 18 are food, housing, and child care, but these are not the only costs to take into account. It can be expensive to purchase other basics like clothing, education, and healthcare. When calculating the costs of having and raising a kid, all of these categories should be taken into account as well.   According to a 2011 report by the Economic Times, the average cost of raising a child in India was ₹ 2.1 lacs. Healthcare costs are also increasing quite swiftly. The price of healthcare has increased steadily since that time by more than twice its previous level. Therefore, the typical health care expenses for raising a child will be between ₹ 4 to ₹ 5 lacs.  Food and other related costs, such as eating out, can range from ₹ 5000 to ₹ 6000 per person on average. Therefore, this could result in an additional ₹70,000 in expenses each year. As food prices rise, this will rise as well, therefore over the next 20 years, food may cost you ₹15 to ₹20 lacs.  Although this is changeable depending on your needs, an ordinary middle-class household that goes to the movies once a week and sometimes to a play or a weekend getaway should expect to pay roughly ₹ 4000 per person. A domestic holiday can run you roughly ₹ 30,000 per person, so your average annual entertainment price is between ₹70,000 to ₹ 80,000. All of these costs are based on current prices and do not account for inflation, so you will need to adjust your budget to account for inflation as you raise your child annually. When it comes to how much money does it take to raise a child in India? Then it can cost you from ₹65 to ₹80 lacs to raise a kid in India today. Join our robust WhatsApp Community that helps parents invest! FAQ How much does a parent spend on a child in India?  Tier 1 city households may spend up to ₹43,000 on their children, but Tier 2 families spend nearly 23% less, Tier 3 families spend more than 22% less, and Tier 4 city parents spend roughly 32% less than Tier 1 city families. So, on an annual basis, Indian parents spend ₹32,000 on their children's education.  How much do you need to have a baby in India?  Given that infants are vulnerable to infections in their first few years of life, children need intensive medical care. Therefore, keeping that in mind, according to the reports of Aditya Birla Capital, the average cost of raising an infant would range from 5 to 6 lacks rupees which would include all the expenses from monthly pediatrician visits to accessories for a child.
How to Get an Education Loan for Engineering?

How to Get an Education Loan for Engineering?

The world craves innovation, and engineers are the architects of that progress. Engineers are vital in shaping our world, from towering skyscrapers to life-saving medical devices. However, the path to an engineering degree can be paved with significant financial hurdles. The ever-increasing cost of tuition fees can make pursuing an engineering degree a daunting prospect, especially for students from financially constrained backgrounds. This blog is your roadmap to navigating the financial landscape of engineering education. We'll delve into the intricacies of securing an engineering education loan and explore alternative financing options to achieve your engineering dreams. Types of Education Loans for Engineering Not all education loans are created equal. Here's a breakdown of the different types of loans available for financing your engineering education: Secured Loans: These loans offer potentially lower interest rates because you provide collateral (like property or a vehicle) as security. If you fail to repay the loan, the lender can seize the collateral. Secured loans can be a good option if you have a valuable asset to use as collateral. Unsecured Loans: These loans don't require collateral but typically come with higher interest rates. Lenders compensate for the lack of security by charging a premium. A strong credit history or a co-signer with a good credit score can improve your chances of securing an unsecured loan with a more favorable interest rate. Government Loans: Government-backed loans often offer lower interest rates and flexible repayment options compared to private lenders. Eligibility criteria and loan terms may vary depending on the specific government program. Private Loans: Private banks and non-banking institutions also offer engineering education loans. Interest rates and terms can vary significantly, so careful research and comparison are crucial. Eligibility Criteria: Who Qualifies for an Engineering Education Loan? Before applying for an engineering education loan, ensure you meet the eligibility criteria. Here are some general requirements: Age: Typically, you must be 18 years or older to apply. Nationality: Nationality requirements may vary depending on the lender. Some lenders may only offer loans to citizens or permanent residents of their country. Academic Qualifications: Your academic performance in previous studies will be considered. Strong academic records can improve your chances of loan approval. Admission to a Program: Proof of admission to a recognized engineering program at a university or college is mandatory. Remember, some lenders may have additional criteria like a co-signer requirement or a minimum credit score requirement for unsecured loans. Factors to Consider When Choosing an Education Loan for Engineering Securing eligibility is just the first step. Here are crucial factors to consider when choosing the right engineering education loan: Interest Rates: This significantly impacts your overall repayment cost. Fixed interest rates offer stability, while variable rates can fluctuate over time. Carefully compare interest rates offered by different lenders. Loan Amount: Borrow only what you genuinely need to cover tuition fees, living expenses, and essential study materials. Avoid unnecessary borrowing that might lead to a heavier financial burden in the future. Repayment Terms: Understand the loan repayment schedule, including the repayment period and monthly installments. Look for options with flexible repayment plans that can adjust to your future earning potential. Processing Fees: Identify any associated fees for loan processing or disbursement. Factor these fees into your overall loan cost comparison. Hidden Costs: Read the fine print carefully. Be aware of any additional charges or penalties for late payments or prepayments. Don't be afraid to negotiate terms with lenders or seek clarification on any unclear aspects of the loan agreement. Earning an engineering degree is an investment in your future. The knowledge and skills you acquire will empower you to solve complex problems and contribute meaningfully to society. By carefully planning your finances and exploring various funding options, you can minimize the financial burden and focus on achieving your academic goals. EduFund Loans understands the unique needs of engineering students. We offer competitive interest rates, a streamlined application process, and flexible repayment options tailored to your future earning potential. Our dedicated customer support team is here to guide you through every step of the journey. Don't let financial constraints hold you back from pursuing your engineering dreams. Visit the EduFund Loans website today to explore our loan options and take the first step towards a bright future in engineering!
A Guide to Filling Your Education Loan Application Form

A Guide to Filling Your Education Loan Application Form

The thrill of studying abroad – a new culture, diverse experiences, and a global perspective – is undeniable. However, the financial hurdles associated with international education can be daunting. Between tuition fees, living expenses, and travel costs, securing funding becomes critical in realizing your dream. This blog is your guide to navigating the education loan application process. We'll focus on EduFund loans as the ultimate tool for accessing affordable financing for your study abroad adventure. We'll demystify the loan application maze and highlight the streamlined and user-friendly approach offered by EduFund loans. Understanding Education Loan Applications An education loan application form is your official request for financial assistance to pursue your studies abroad. Think of it as a roadmap for the lender, providing them with the necessary details to assess your eligibility and loan requirements. The application form typically includes sections for your personal details, academic background, course specifics, financial information, and sometimes details about a guarantor or co-signer (if applicable). Remember, accuracy and completeness are paramount. Double-check all information before submitting your application to avoid delays or potential rejection. Important Documents for Education Loan Application You must gather and submit specific documents to complete your education loan application successfully. Here's a list of some essential ones (requirements may vary slightly depending on the lender): Completed application form: This is the foundation, so ensure all details are accurate and truthful. Academic transcripts and certificates: Proof of your academic achievements is crucial. Proof of admission to a foreign university: An official acceptance letter demonstrates your confirmed enrollment. Proof of identity and residence: Valid documents like passports or utility bills verify your identity and address. Financial documents: Income tax returns, bank statements, or sponsor letters demonstrate your financial situation. Guarantor/co-signer documents (if applicable): If required, provide documents proving your guarantor's financial strength. EduFund Advantage: A Streamlined Approach to Education Loan Applications Feeling overwhelmed by the paperwork and complexities of a traditional loan application? EduFund loans offer a refreshing solution! Here's why EduFund stands out: Simplified Online Application: Ditch the paper forms! EduFund boasts a user-friendly online application platform that seamlessly guides you through the process. Streamlined Document Submission: No more scrambling for physical copies. Upload all required documents securely through the EduFund platform. Fast and Efficient Verification: EduFund utilizes technology to expedite document verification, ensuring a quicker application turnaround. Dedicated Customer Support: Have questions or need guidance? EduFund's dedicated customer support team can assist you throughout the application process. A Step-by-Step Guide to Applying for an EduFund Loan Ready to embark on your journey with EduFund loans? Here's a step-by-step guide to make the application process smooth and efficient: Visit the EduFund website: Navigate to the "Apply Now" section or the designated application page. Fill out the Online Application: Provide accurate and complete details about yourself, your academic background, and the program you'll be pursuing. Upload Required Documents: Utilize the secure upload feature to submit all necessary documents per the checklist. Submit Your Application: Once you've reviewed and confirmed all information, submit your application electronically. You'll receive a confirmation email. Await Loan Approval and Discuss Terms: EduFund will review your application and notify you of the approval decision. Upon approval, you can discuss loan terms and interest rates before finalizing the agreement.
Is Collateral Required for Education Loans?

Is Collateral Required for Education Loans?

The ever-increasing cost of education makes student loans a reality for many aspiring students. However, navigating the complexities of securing a loan can be overwhelming, especially when it comes to the topic of collateral. This blog aims to untangle the confusion surrounding collateral requirements for education loans and empower you to make informed decisions. Secured vs. Unsecured Education Loans: Understanding the Difference Imagine a loan as a promise to repay borrowed money. In a secured education loan, you offer collateral (an asset like property or a vehicle) as security. If you fail to repay the loan, the lender can seize this collateral to recoup their losses. Secured loans typically come with lower interest rates and allow you to borrow larger sums. However, the risk of losing your valuable asset is a significant drawback. On the other hand, unsecured education loans don't require collateral. This might sound ideal, but lenders compensate for the lack of security by charging higher interest rates and having stricter eligibility requirements. Generally, a strong credit score increases your chances of securing an unsecured loan. Factors Affecting Collateral Requirements Several factors influence whether a lender requires collateral for your education loan. Your credit score plays a crucial role. A limited credit history or a low credit score may make it more likely for lenders to seek the security of collateral. Here's another factor: guarantors or co-signers. These are individuals who essentially agree to take responsibility for your loan repayment if you default. Having a co-signer with a strong financial standing can improve your chances of getting an unsecured loan or a secured loan with a more favorable interest rate. Lenders may also consider the type of course you're pursuing, the loan amount you're requesting, and your academic record when deciding on collateral requirements. When is Collateral Typically Required for Education Loans? Let's look at some real-life situations where collateral is more likely to be a requirement: Loans for Large Amounts: If you need a substantial loan to cover your education expenses, lenders may seek additional security in the form of collateral to minimize their risk. Low Credit Score: Lenders might require collateral to offset the perceived higher risk of non-repayment if you have a limited credit history or a low credit score. Unestablished Career: Students without a stable job history may find it challenging to secure an unsecured loan, especially for a large amount. A co-signer or collateral can strengthen your application in such cases. When Can You Get an Unsecured Loan to Study Abroad? There are situations where unsecured loans are a viable option: Loans for Smaller Amounts: For smaller loan amounts, lenders might be more flexible and offer unsecured options with competitive interest rates. Strong Credit Score & Co-signer: A good credit score demonstrates your financial responsibility and increases your chances of securing an unsecured loan. A co-signer with a strong financial background can further strengthen your application. Specific Loan Programs: Government or scholarship-based loan programs may offer unsecured options with lower interest rates compared to private lenders. Additional Factors to Consider When Choosing an Education Loan Remember, collateral is just one piece of the puzzle when choosing an education loan. It's crucial to compare interest rates (fixed vs. variable) offered by different lenders. Fixed interest rates provide stability in your monthly payments, while variable rates can fluctuate over time. Don't neglect other loan features like repayment terms, processing fees, and prepayment options. These factors can significantly impact your overall loan experience. It's also wise to research scholarships, grants, and financial aid programs offered by your institution or government agencies. Reducing your reliance on loans can lessen your financial burden.
Myths about education loans

Myths about education loans

Do you think education loans are only for prestigious universities like Ivy Leagues or Oxford and IITs? Do you think the moratorium period is interest-free or you can only get an education loan if you are going to study specific courses? Then you need to read this blog! It’s time to dispel the myths about education loans and help you plan for your higher education smartly with all the facts in check! The moratorium period is interest-free  A myth about education loans is that the moratorium period wherein the borrower is not obligated to make payments is interest-free. This is not true; the moratorium period is a time when it is not compulsory for the borrower to start making payments to the bank. The interest accumulated during this period is added to your next installment and not waived.   Banks generally calculate the interest generated during the moratorium period and add it to the principal repayment amount. Most banks offer a moratorium period for education loans. During this time horizon, the borrower must figure out their expenses and work on a financial repayment plan for the loan. Apply for Education Loans Education loans are only for foreign universities  Education loans are offered for Indian and foreign universities. The myth about education loans and lenders is that education loans are only given to students planning to go abroad and for huge amounts like Rs. 50 lakhs or more. This is incorrect, parents who wish to educate their children in India can avail of education loans starting at Rs. 50,000 and more. They have the flexibility to choose their lender and figure out the best interest rate and the most favorable loan requirements for their child’s education.   In fact, most banks allow students to take on a personal loan to take online courses and even online master's programs to upskill and aim for better job opportunities. Yet seeking an education loan for an online degree is not an option at the moment.   Education Loan Process Read More Self-financing is better! Using savings is better than taking a loan is another misnomer and myth about education loans. While it is ideal to have an education fund that can sponsor your education, it may not be possible for everyone. In fact, 60% of Indian parents regret not saving for their child’s education but that should not stop you.  Neither should you opt for selling assets or borrowing informally, education loans offer flexibility and can be a good alternative for children who are in need of immediate funds from trusted institutions.   Taking an education loan means you won’t have to sell your assets, you will have time to start the repayment process and the stress of paying immediately will be lifted off your shoulders. Taking a loan can also help you in the long run with credit building and other expenses.   Education loan is only for Ivy League Another myth about education loans is that only students going to Ivy League colleges can opt for them. Education loans are given to candidates who have a good application and are applying to a recognized university. You do not have to go for an Ivy League to apply for an education loan, all you need is a good course and a recognized university so that your application can be processed and verified!   Education loans only cover tuition fees  Education loans cover a number of expenses including tuition fees, accommodation, application fees, flights and books, and more. It helps you sponsor your education and not just tuition fees. It gives you the flexibility to decide how you spend your money and how much you need to comfortably settle into your new life as a student.   Applications without collateral are rejected   Applications without collateral are not rejected; in fact, many education loans are collateral-free. Collateral-free means you don’t have to pledge an asset (like land, house, or FDs) to avail of an education loan. Education loans are designed to make education more affordable and accessible for the general public which is why some education loans do not have a collateral clause as well.   You can only finance your education with a loan No! There is ‘n’ a number of ways to finance your education and a loan is just one of them. You can sponsor your education with scholarships, grants, bursaries, and an education fund your parents may have saved up for you. As a parent, you can help your child fund their education through SIP in mutual funds, by investing in US stocks, and by exploring different investment options. An education loan is also a great alternative to help you finance your dream college and career, it helps you with big expenses like tuition fees, accommodation as well and visa applications where you have to show proof of funds in order to fly to a study abroad destination.   You can finance your study abroad or higher education dreams in combination. If you have some savings and lack the rest of the funds then an education loan is the right way forward.   We hope this article helped you break all the myths about education loans! If you are looking for the right education loan for your child then look no further, contact our savings experts to get the best loan at attractive interest rates.  FAQs Is taking an education loan a good idea? 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. What will happen if I don't pay education loan? Non-repayment of an education loan is a legal offense. An education loan is a legally binding contract given to the applicant on the condition that they will repay the lender/bank in a timely duration. It is not a scholarship or donation. Students must beware that the bank can take legal action against them and their co-applicant if the loan is not repaid according to the two parties' agreed-upon repayment process. In fact, the lender is within their right to confiscate any collateral pledged as security against the loan taken. What are the disadvantages of education loans? One of the disadvantages of education loans is that they can be stressful. They are like an albatross around your neck throughout your college days, and once you start a new job, a majority of your income is contributed to their repayment. The repayment cycle can also be long and tenuous—it can go up to 15 years. Is self-financing better than taking an education loan? If you or your parents have limited savings, an education loan is better than self-financing. Education loans allow you to be independent and not depend on your parents' savings to sponsor your higher education. There are also tax benefits of education loans that you and your parents can reap. TALK TO AN EXPERT
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