Debunking 5 Myths About Taking An Education Loan

 Do you have plans of pursuing higher education at an esteemed university? Then, you may be concerned about getting the right amount of financing for that. One of the best ways to solve this issue is to opt for an education loan. However, there is a lot of misconception surrounding such types of loans. This may lead to a potential borrower being held back from getting the right financial assistance that they require. To raise awareness in this regard, we take a look at 5 such misconceptions and debunk them for your benefit. 

 

1. An education loan can be taken only for a certain limit 

 

Many people believe that they can get education loan amounts up to a certain limit only. This is quite understandable as traditionally, lenders used to have restrictions on the amount they could lend. However, with the cost of education as well as the number of people applying for education loans rising, many lenders now offer the feature of no upper limit. 

 

2. Education loans only cover the academic fees

 

People have a misconception that only the academic fees will be covered when they take an education loan. This is not true as there are many lenders that cover multiple expenses. So, whether you are looking to cover costs related to travel, study materials, accommodation at the study destination, and so on, you can take the help of an education loan. Do bear in mind that these costs are not covered on a standalone basis. They are covered alongside academic fees in your education loan. 

 

3.  Education loans require collateral to get processed

 

Collateral refers to a valuable asset that you keep with your lender for the duration of your loan as a form of security against it. Many people think that if they are taking an education loan, they will have to provide some sort of collateral. But this is not true as there are many lenders in the market that provide collateral-free loans, even for higher amounts. 

 

4. Education loans have a lengthy loan sanctioning time 

 

A large number of students hesitate to opt for educational loans as they feel that they are too late and the process may take considerable time. They may have the misconception that their university admission process may get hampered. However, in reality, this is highly unlikely to occur. Most leading lenders have a thorough knowledge of admission processes the world over and so they may have a quick and easy loan application and sanction process. After you have filled the education loan application form and the lender has verified it, your lender will be disbursed soon. 

 

5. Education loans are only available for the academically strong students 

 

What kinds of students the lender considers eligible for an education loan is dependent on several parameters. Though your past academic performance has an effect on the loan amount you are eligible for, it is not impossible to get an education loan if it has not extremely good. Good lenders also look at the potential that a student has. Therefore, you should converse with the lender about your passion for the course as well as your future goals. 

 

The terms and conditions of an education loan differ from lender to lender. Do read the policy documents carefully before signing.