India has a rich literary history. It is a testimony to the fact that our society puts great impetus on education and learning. Right from a young age, the importance of education is taught to children so that they can excel academically and secure a successful career. Given the cultural significance of education, Indian parents are determined to provide the best educational facilities for their children.
Need for education financing
Given the rising inflation and educational expenses, it becomes difficult to meet the financial requirement via savings alone. A savings approach alone may not be sufficient to anticipate the unforeseen costs. Moreover, the rising cost of living and the desire to pursue education from the top tier universities have further added to overall academic expenses. This gives rise to the need for education financing and, today, we have many specialists who are supporting every requirement with the appropriate solutions.
Parents can easily avail education loans to finance their child’s academic milestones. Young professionals are increasingly willing to up-skill themselves via vocational training and executive learning to have an edge in the market. Employers are on a look out for skilled talent. This, coupled with the easy availability of customized loans and learning options encourage many professionals to opt for up-skilling programs to fast track their career.
Amidst the pandemic-led setbacks, people relied on education to be an enabler for better professional prospects. Many students are coming forward to self-finance their academic aspirations. This lays less stress on parents, allowing wealth appreciation via investments, and inspires students to develop responsible money management practices. An education loan is also a great step to start the journey of building a good credit score for students, which is lucrative for bringing down the costs of borrowing in future.
Planning for an education loan
It is essential to plan the process from end-to-end and factor in all the key financial requirements for an education loan. Although an education loan largely consists of tuition fees, it is important to understand all the ancillary expenses that will be incurred during the tenure of the course. This may include the cost of traveling, accommodation and living expenses in case of an overseas degree. The mounting figure should not deter anyone’s educational dream. This is where education financing experts can step in to guide applicants with the best possible solutions that will aptly and smartly fulfil the requirements.
Choosing a lender
Borrowers can select lenders from a bouquet of NBFCs, banks and fintech providers. The market is thriving at a steady pace and more and more players are entering the segment given the growing demand. In 2020, the total education loan market in India was nearly Rs 93,000 crore. It has increased to Rs 99,000 crore as of March 2021 and has been growing at a 7 percent CAGR from FY17.
While choosing a lender, it is important to evaluate its history and understand its unique selling proposition. Loan providers offer secured and unsecured loans depending on the collateral available. The interest rate varies from lender to lender and can be tailored as per the requirement. Applicants should try to take a loan to cover the necessary costs and affix the tenure in such a way that they can easily manage the repayments. Also, students should keep in mind the multiple ways of repaying the loan amount. They should enquire about the moratorium period offered along with the various repaying methods of simple interest & partial interest during the initial days and equated monthly instalment (EMI) repayment procedure.
Customizing education financing solutions
For education financing, it is advised to reach out to specialized lenders as they may have a better experience by working with many students and institutions. Borrowers can use EMI calculators to plan their repayments. Peer-to-peer conversations also help borrowers be better equipped with the necessary information when planning to opt for an education loan. Many lenders are offering tailored solutions that are in the best interest of the borrowers. Specialized financial solution providers are well-poised to offer the customers holistic guidance and tailor-made financial plans designed to help students successfully fulfil their academic aspirations.
Lenders are offering several student-centric solutions that can help students achieve their academic dreams independently and cultivate a healthy money management practice from a young age. It is advised to plan the education loan well and seek expert assistance from the lenders to get the best solution for higher education. With tech intervention, it is very easy now to apply for an education loan from the comfort of homes, and if one has credit scores, smart lenders can sanction loans in just a few days.