Decide Right Amount Educational Loan
The educational loan can turn to be a burden on one’s finance if they are not planned properly. Many banks today extend a loan for affording complete education. You can cover any expense related to education right from the institution fee to travel expenses. The lenders offer the student loan at varying interest rates. Many factors must be considered while availing the educational loans so that you don’t suffer your retirement plans to afford repayments of your educational loans. The question that bothers you at this juncture is what is the right amount that can be availed through student loan? The current article offers answers for the same.
Draft a budget plan
Educational expenses are never limited to college fee. Many expenses like travel fee, books fee and many other expenses. You should take all these expenses into consideration while deciding on the amount that can be availed through educational loans.
Most of the times, educational loans are applied to afford education abroad. It is important to consider currency changes when you are deciding the amount of the educational loan. Depreciation leads to increase in the fee amount for the Indian students. You should consider an additional loan of 10%-30% to handle the impact of depreciation.
Do you need down payment to fetch an educational loan? It all depends on the lenders you approach. Some lenders fund 100 percent of the amount to fund educational expenses. Conduct research to trace a bank that offers you the best deal.
EMI is a major concern for the borrowers who are looking to avail the loan. You should keep your EMI lower as your income will be relatively lower during the initial days of your earning. It is advisable to take longer repayment tenure for your educational loan. When the EMIs on the loan are relatively low, you can comfortably repay your loan for education in future while addressing other expenses.
Future earning capacity
Loan for education should be decided based on your future earning capacity. You should take a loan that you can service comfortable with your future income. Of course, there is no rule of thumb to decide the loan amount that can be taken by a student, considering your future repayment capacity will never push you into debt. It is difficult for assess your future income to decide the loan amount that could be availed. Consider the lowest payment offered to the person that has cleared the same course from the institution you prefer to join.