Today, education is expensive, especially advanced PG courses and degrees. There are foreign education courses that may rip you off financially. Fret not. There are lenders offering education loans, monetary assistance for meritorious but financially deprived students in a country.
Before taking any education loan, ensure that the course is full-time, a postgraduate degree in engineering, technology, medicine, architecture, management, or math and statistics. Banks and financial organizations offer most of the career loans to assist students to pursue higher or foreign studies. The loan covers all expenses like admission cost, library fees, tuition and exam cost, expenses for buying new books, computers or laptops. Some of the lenders also offer two-wheeler loans if the college is far off. For overseas studies, travel expenses are also included in a career loan.
If an aspiring candidate is studying in the US, the loan covers insurance costs because medical expenses are high out there. Therefore, there are many things associated with a career loan. The lenders walk the extra mile to help talented and needy students so that the loan approval process is simple and hassle-free.
According to an article published on https://www.huffingtonpost.in, student and education loans are popular in the US. Did you know that over 44 million US citizens owe $1.5 trillion in career loans? For your better understanding, here are four things you must know about education or career loans:
All education loans will require a co-applicant, joint borrowers. It can be parents, spouse, siblings, and even in-laws. However, smaller amounts do not require any co-applicant. The lender will not ask for co-borrower details in such a case.
The bank or lender will ask some sort of security or guarantor if a borrower takes a high-value loan. It can be securities such as stocks, gold, real estate, fixed deposits, and other investments. Some of the times, the lending institution may ask for a third party guarantee. The first and second applicant remains the same. If these two people fail to pay off the loan, then a third party has to take the responsibility to repay the education loan.
For smaller amounts, co-obligation of family members is necessary. For higher loan amounts, co-obligation of family members together with a third party is a must. For a career loan that is very high, lenders will ask for collateral security in case the borrower fails to repay the borrowed sum. In such a case, the lender will sell off the property of the borrower and recover the unpaid loan amount.
A career loan would be disbursed directly to the college or university in which the student has applied for admission. If there are hostel charges, the respective amount of money will be given to the authorities. The bank or lender will verify the duration of the course or degree and assess the cost of the course applicable at that time.
Every year, the lending institution will ask the student to fill a form with the details of the funds required to pursue the course. After proper verifications, the bank will disburse the amount to the college, institute or university. Besides, if you want to know how to avail career loans, you can study sites like Liberty Lending or similar platforms.
If a student is traveling abroad for foreign education, the flight fare is disbursed directly to the airline company. A few lenders and banks offer some amount of money to the students for buying books, computers, and related things. Now, it depends from one bank to the other.
The lender will reimburse students already taking admission and incurring the expenses once the original receipts are produced within a stipulated period.
Usually, the repayment starts once the loan is disbursed and monthly payments made every month. However, for career loans, the repayment starts after six months of course completion or when the borrower starts doing a job in any company. The lender will not ask for any repayment from the student during the holiday period. The rules are simple and easy to understand. Besides, lenders explain all details of the loan, terms, and conditions, interest rates, monthly payments, and repayment time to the borrower. There is no doubt about the same.
The calculation of interest begins when the loan is disbursed and not on the full amount right away. When it comes to a career loan, during the holiday phase, the lender or bank would compute the interest on the loan based on the interest method. The interest will accrue until the end of the holiday period. The lender will explain all such details to the borrower and clarify all doubts about repayment. There are a couple of banks offering a reduced rate of interest if the borrower pays the interest during the holiday period.
When it comes to tax benefits, it is on the interest part. The full interest portion is free of tax. However, no deduction is available on the repayment of the principal amount. Any individual who has opted for an education loan for self, kids, or spouse can claim the tax deduction on the interest part.
The deduction is applicable for the year a borrower paying the rate of interest. It is the assessment year.
A borrower can apply for an educational loan directly at the branch or online. The approval or rejection of a career loan depends on certain factors. It differs from one lender to the other. In most cases, loans are approved provided all documents are in place. The other factors include the purpose of the loan, repayment capacity, and things like that. Whether the loan would be approved or not is communicated within a couple of weeks by the lender. The student can ask for the reason for disapproval from the lender. The bank will explain the reason regardless. There is no doubt about the same.
Now that you know about these aspects about an education loan, it will be easy for the lender to approve the same. Keep all documents in place for easy approval.