We live in an age where higher studies are an integral part of a student’s resume. In fact, a Master’s degree from a reputable college is what an employer looks for when they recruit a candidate. And with great avenues for education available abroad, it is no surprise that students want to pursue their education overseas.
But an education abroad comes with many expenses. And while your savings may be your first option to finance a loved one’s education, it may not be the best. Why dip into your savings when there are other options available?
The foremost option you must consider for an education abroad is a scholarship. Colleges abroad offer a range of scholarships for meritorious students, which may cover a part or more of the tuition expenses. However, these tend to be competitive and may not always be available.
Education loans on the other hand may be a good bet. Not only do you get to cover the tuition fee for the educational course, but the repayment schedule means you can pace your payments over time. However, do note that the loan will cover only education expenses. Before you rush to your bank for one, it may make sense to consider a personal loan for higher education.
Banks and non-banking financial companies (NBFCs), such as Bajaj Finserv, offer personal loans for higher education, which can be used to cover a number of different expenses – from tuition fees to books, living expenses, an emergency fund, and more.
Here are the things that your lender considers before approving your loan application.
- Loan Amount: This is the amount of money that you have asked for from your financial institution. The interest amount will be charged on your loan amount. Hence, the higher your loan amount, the more interest you will be paying.
- Tenor: The amount of time you are given to repay the loan is your tenor. The tenor of repaying the loan amount varies from 1 to 5 years. Hence, this gives you enough time in planning your future expenses and also to pay your EMI (Equated Monthly Income).
- Interest Rate: This rate is fixed by your financial institution but differs from different lenders. Your interest rate is fixed throughout your loan tenor. The distribution of your EMI is in such a way that when your loan repayment starts, the major amount is contributed towards your interest amount and as the loan tenor progresses, a significant part of your EMI is contributed towards your principal amount.
- Credit Score: Your credit score is decided upon your credit history in paying your previous loans and EMIs on time. Financial institutions judge your credit score and then decide whether you are trustworthy to approve the loan or not. It will also decide whether you are eligible to get the amount of loan that you have asked for.
In case you are applying for a personal loan, you should know that your financial institution provides an EMI calculators on their website by which you shall know how much EMI are you liable to pay each month.
The approval time for your loan is usually instantaneous. NBFCs usually approves loans in 5 minutes, and the money is usually transferred to your account in about 72 hours. Hence, you will be able to use the money in a short span of time. To add to this, the personal loan does not require a collateral and is thus more convenient.