The cost of higher education is increasing day by day, which is why many students resort to education loans for their studies. However, this has led to some negative consequences, with many students getting trapped in a debt cycle. Experts emphasize the importance of protecting students who wish to study abroad from financial stress. Therefore, before taking an education loan, there are several important factors to consider. Below, we highlight some key points that students should keep in mind.
Keep These Things in Mind
- Understand the loan terms and conditions properly, including repayment details and other important information.
- Choosing an expensive institute or hostel can significantly increase your financial burden.
- Pay the loan on time. Procrastinating may offer temporary relief, but it will only increase the total loan amount in the long run.
How to Avoid Getting Caught in a Debt Trap
- Create an emergency fund: Set aside a certain amount and budget it separately. This will help you manage your finances until you’re financially stable.
- Develop a repayment plan: Prioritize paying off high-interest loans first, then focus on the rest.
- Avoid unnecessary expenses: Impulse purchases can add extra financial stress.
- Make a budget and track your expenses: Cut out any unnecessary spending to help stay within your means.
Here are some of the Indian banks offering the best education loans:
- SBI
- Interest Rate: 8.65% – 9.90%
- Loan Amount: Up to ₹20L (India), ₹1.5Cr (Abroad)
- Repayment: 15 years
- Key Feature: No processing fee for loans over ₹7.5L (Abroad)
- HDFC Bank
- Interest Rate: 9.50% – 13.50%
- Loan Amount: Up to ₹20L (India), ₹50L (Abroad)
- Repayment: 15 years
- Key Feature: No processing fee for domestic loans
- PNB
- Interest Rate: 8.40% – 9.90%
- Loan Amount: Up to ₹10L (India), ₹20L (Abroad)
- Repayment: 15 years
- Key Feature: No processing fee above ₹7.5L
- BOB
- Interest Rate: 8.40% – 9.90%
- Loan Amount: Up to ₹10L (India), ₹20L (Abroad)
- Repayment: 15 years
- Key Feature: Flexible repayment options
- ICICI Bank
- Interest Rate: 10.50% – 12.50%
- Loan Amount: Up to ₹40L
- Repayment: 15 years
- Key Feature: Fast approval
- Axis Bank
- Interest Rate: 10.50% – 12.75%
- Loan Amount: Up to ₹40L (Abroad)
- Repayment: 15 years
- Key Feature: Flexible EMI options
- Kotak Mahindra
- Interest Rate: 10.50% – 14.00%
- Loan Amount: Up to ₹50L (Abroad)
- Repayment: 15 years
- Key Feature: Easy documentation
- Canara Bank
- Interest Rate: 8.40% – 9.85%
- Loan Amount: Up to ₹10L (India), ₹20L (Abroad)
- Repayment: 15 years
- Key Feature: Simple process
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