Since higher education costs are skyrocketing each day, opting for a loan for studies is a great choice for you. The benefits of these kinds of loans are endless. You get tax benefits, low-interest rates, and more time for repaying the loans, among other advantages. Not only that, it helps you take your time in paying them back after you finish your studies since some education loans do not have to be repaid during the period of your studies. As a result, you can easily pursue your higher education with a carefree mindset for the time period of your studies, depending on who your lender is.
However, before you go and take a loan for studies, you might want to consider a few things to ensure you get a good deal and are eligible for the loan.
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The Nature of the Interest Rate
Interest rates can be either fixed or floating. While fixed interest rates allow you to pay fixed instalments to repay your personal loan, floating interest rates are much riskier. Floating interest rates happen to vary with the time period of the loan. This can be very disadvantageous when the interest rates are high, especially if the loan you take is of a high amount.
So, try getting a personal loan with fixed interest instead of one with a floating interest rate.
2. Margin of Money
This is the amount of money for your education that you will have to pay whilst the bank pays the remaining amount. Some banks have a margin of money of 10%. Others do not have a margin of money. When taking a loan, irrespective of whether it is a secured personal loan or an unsecured personal loan (though they are usually unsecured), do remember to consider the margin of money before taking the loan.
3. Personal Loan Eligibility
Before you apply for a loan to fund your higher education, you might want to check how eligible you are for getting a loan. The internet has many personal loan eligibility calculators that you can use to check the amount of loan you can take. A CIBIL score above 750 is usually bound to get you loan approval. This is because the score shows you to be a responsible borrower, and thus the lender deems you to be less risky. If you wish to improve your personal loan eligibility upon checking, the following tips might help you out.
- Try to repay all of your credit card bills as well as existing loans.
- Try not to apply for numerous loans simultaneously as it does not give a good image of you in your credit report and makes you seem like a risky applicant.
- Try getting a loan from a lender whose eligibility criteria are simple to fulfil.
- Do not exclude any source of your income as it helps the lender assess whether you will be able to repay your loan on time.
Taking an unsecured loan meaning for your higher studies can be extremely beneficial as long as you take the three things listed above into consideration. Since the global pandemic is continually wreaking havoc over businesses, pursuing your higher education in 2021 using an education loan might just be the ideal choice for you.
Pre-approved deals are available on a variety of Bajaj Finserv products, including personal loans, home loans, and credit cards. By entering your name and contact information, you can get the offer checked for you.
