Getting a loan might become a burden, particularly if the education loan interest rate is high. Your main objective should be to find choices that enable you to make smaller EMI payments on your education loan, resulting in a cheaper interest rate, before looking for a financial institution to provide the loan.
Education loan Interest rates from banks and NBFCs range from 9% to 14%. However, the interest rate on student loans is flexible. Here are some suggestions for settling on a cheaper interest rate for your Indian student loan:
Leverage Your Academic Standing
Given your academic standing, a bank may grant you an education loan. Keep up a good reputation so that banks are prepared to offer low-interest rates on loans since they have faith in your capacity to repay them.
Getting an education loan in India becomes simpler when you receive a high score and get approved for college. Your loan application will be accepted quickly based on your tenth or twelfth GPA and other academic accomplishments.
At IDFC FIRST Bank, you can get an education loan at the lowest interest rate if you have excellent marks in 12th or Graduation (For those seeking loans to study MBA). IDFC offers the lowest interest rate to applicants who secured seats at top Indian or foreign institutions.
Look For the College or University’s Reputation
Lenders may lower interest rates on student loans if you are accepted into one of India’s top universities or institutions. It’s crucial to estimate your costs before deciding because the loan amount you accept will significantly impact the processing costs. You can also select Unsecured loan choices if you prefer a smaller loan.
For those wondering how to get an education loan, first, determine the college/university and the program you want to enrol in. Now, selecting the course matters.
Bank offers low education loan interest rates to applicants who pick a program with high job prospects. Engineers, doctors, and other students profit because they can satisfy the lender’s requirements for repayment capacity.
Education Loan Without or With Collateral
Your collateral’s worth affects the interest rate on your student loan. If you utilize a house as security for your loan, this rate will be low. You must offer collateral security for the loan amount to obtain a loan of over Rs. 7.5 lakh.
You can use your land, property, insurance policy, term deposit, or another asset as collateral. Check the interest rates different banks offer, and use this data to bargain with rivals. Lenders will be ready to lower their interest rates if your profile is strong.
Choose a Co-Borrower With a Strong Credit Profile
As a shared borrower on an education loan, parents are included. Parents in this situation must present identification and evidence of income. You can obtain a cheap interest rate on the borrowed money if your co-borrower has a high salary and a solid credit history.
Since the repo rate has lately decreased due to action by the Reserve Bank of India (RBI), you must take benefit of this chance to lower your interest rate and complete your educational objectives.
The key choice to enhance your profession is selecting the greatest education loan. Do thorough research on every element to enjoy the excitement of new chances that the correct funding can provide.