Tips to remember while applying for Student Loans

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By making college unaffordable and student education loans unbearable, we risk deterring our best and brightest from pursuing higher education and securing a good-paying job. – Mark Pocan,  an American politician and businessman.

We certainly know that education now is merely a process of teaching and learning but has evolved into a scheme of crushing the students and their families under the financial crisis. India being a developing nation, a large population of students do come from the families who can’t even aid their bachelor’s curse, left alone post-graduation or PhDs. Many dreams, hopes, and aspirations are effaced from the roots of young minds. Those who get the opportunity of education not truly understand its worth, while for many others it only remains as a dream.

We are not here to crib about the viciousness of the system, nor do we intend to form a cult against the education board. We do not believe in harbouring any negative thoughts and we believe things manage themselves if we manage ourselves. We are today here to discuss and enlighten the readers about education loans. Many people have only thought about it and have given up halfway as they do not have a clear idea about it. Many think that it is too tedious and a hectic process. Others consider it as a conning scheme. But today we let us clear some misconceptions and get a crystal clear idea of what it is.

Private loans typically require a credit check and may need a co-signer. These often have higher interest rates for borrowers with bad credit. Researching loan terms and working on improving your credit score is advisable.

Unfolding the doubts in chronology-

Who can take advantage of it?

Basically anyone who has a registered or owned house or any property. The property should be on your name if you are above 18 years of age or owned by your parents/ guardians. The bank will ask for the court papers, so keep them ready. Some bank allows if the property is of the joint family while some banks insist to have an individual property. This property will be kept as a mortgage, meaning unless you pay back the loan, you are no longer in the possession of this property. The bank has the right to siege the property if you don’t complete the loan payments

Another thing you can keep as the mortgage is gold and gold ornaments. You can take a loan 10 times the actual mortgage price of the education loan in some but not all banks. Many people prefer gold as it is a less tedious job, requires less paperwork and overall there are fewer documents needed.

Which banks offer this facility?

All nationalized banks offer these facilities. To name one – State bank of India has a special student educational loan scheme. If you enquire at any bank. They will be more than happy to help you. However, do not be overwhelmed as they will try to take advantage to render them their best profit.

How long is the time to repay the loan?

The loan repay starts when the student starts earning and has a proper job which is registered in the income tax department. You can repay the amount in small installments month by month or you can pay the whole amount at once but only after a certain number of an installment is done. For repaying the amount, internship (even monetary) are not considered to be a legitimate job. Normally the number of years allotted to repay depends on the sum of loan you withdrew along with the added interest- somewhere between 7 to 10 years. For students, the interest is low as compared to home loans or marriage loans or car loans.

Is there a constant pressure while studying?

No. the bank offer does not trouble us by sending any kind of constant emails or delivering letters. However, for some students, the thought of paying the huge debt of loans might constantly bug them and in some very rare instances can affect their academic performance. It is true that the student might be under stress and might do a part-time job to muster the sum to avoid the stress further. But almost all students learn to use this as a positive factor and motivation to do better.

It might seem like an arduous task to apply for a loan or merely even thinking about this. Some might consider their fate to be full of potholes and give up. For others, it might be demeaning and disrespecting their family prestige as the loan is often considered as asking for a favour. Whatever the reason may be, I believe many careers are effaced and many brilliant minds are diminished because of financial adversities. Money shouldn’t be the hindrance in education, nothing should be the hindrance in education. I agree education is not free, it is costly but nothing should be more costly than our career, than our dreams. Education loan might pay for the tuition fees but what is the amount of compensation for giving up on our career? Nothing. Education is a basic right and it should be treated in the same way.

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