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Points to be noted while getting education loan!
Posted on: 15/May/2015 5:42:58 PM
The cost of education has been sky-rocketing in Chennai over the last few years!
If you are a parent or a student looking for education loan, there a few important points to be considered:
Interest rate on education loan
As far as education loan is concerned, even a small difference such 0.35% interest or 25 basic points can have a huge impact on the loan repayment. Hence, it is better to read & clearly understand the rates of interest.
Private bank or Nationalised bank?
Both public & private sector banks make attractive offers for education loans.
Usually, State Bank of India’s offers are the best!
Interest rates are higher in private sector banks. Hence, it is better not to consider them!
Female children
Please do not forget that lower interest rates are offered for female students!
2 types of interests
There are 2 types of interests known as fixed interest & floating interest. It is advisable to go for floating interest if possible.
Education loan amount
The amount of loan is based on the bank’s schemes. IDBI offers Rs. 4/- to Rs. 7.5/- Lakhs for non-technical courses. It offers Rs. 3 Lakhs for CA (Chartered accountancy).
Repayment period
This will depend upon the course taken. It also varies from bank to bank.Depending on the amount of loan; different banks decide different periods of repayment. You can compare and decide.
Processing & other charges
There are other charges while obtaining education loan. It is better to know about processing fee, early closure fee, and other charges. Some banks do not charge processing fees for studying in India. However, they may charge for education loans for going abroad.
Look at the free offers
Some banks offer free debit card or insurance cover. Do not forget to know about these and avail these benefits.
Conclusion
The most important aspect is the rate of interest. Public sector banks lead in this aspect. However, it may require several trips to these banks to process the loan. However, this strain will prove worthwhile!
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