How Education Loan Different From Personal Loan?

Numerous students from all over the world go from their home countries each year to pursue their ambitions of studying abroad. They travel in quest of better chances and contact with the professions they want to follow. Depending on the course, some nations specialise on fashion, business, or mass media. However, a sizable portion of these students frequently struggle to obtain the money to pay for their higher education at a foreign university.Most of them make an effort to save a sizable sum out of their own money. Some may even think of borrowing a sizable sum from your family and friends. However, if there are ever any issues or misunderstandings, this will simply cause chaos. So, how will you pay for your further education? 

 

The only simple way to pay for your schooling in these circumstances is to take out a loan from a bank. Your entire educational cost will be covered by a loan, allowing you to concentrate entirely on realising your objectives. However, deciding which type of loan to use to pay for your higher education requires a lot of thought, consideration, and care.

 

You are not obligated to sell your valued assets

Typically, parents sell off substantial amounts of assets to pay for education, which interferes with long-term financial goals like buying a house or apartment, children’s marriages, and other things. Banks hold your liquid assets, such as FDs, insurance, and government bonds, as collateral when you apply for an education loan and then grant you a loan. You won’t have to sell any of your valuable possessions as a result.Compared to other unsecured loan categories, such personal loans, education loans are far less expensive. Because they are given to students for their future studies, these loans have lower interest rates.

 

With A Long Moratorium Period, Pay After Your Degree

This is one of the biggest benefits of a student loan. No payback is required from the student until the EMIs start during the moratorium period. In order to give students time to focus on their studies, the moratorium period often lasts for the duration of the course plus six months or one year. Education loans are subject to a protracted moratorium period that lasts the entire course. Several banks give a student a six-month or one-year extension once they start working or finish their studies.

 

The family will be able to organize their budget more successfully around this timetable because the student may not have to worry about repaying the loan anytime soon. Low-income families with students may be eligible for the loan.

Bottom Line

Education loans are a more advantageous alternative for borrowers than personal loans due to their lower interest rates, longer terms, moratorium periods, and tax advantages. If you are unable to obtain an education loan because you lack a co-borrower, guarantor, adequate collateral, or you need a larger loan amount than you are qualified for, think about taking out a personal loan.

 

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