The education cost in India today is touching the roof. Further education, be it in India or overseas, is getting expensive by the day. Such high prices can dent the aspirations of bright students who seek to pursue further education and want an exciting career. However, the chances are still bright. Banks and NBFCs offer educational loans for such purpose, be for studies within India or abroad. It paves the way for realising your ambitions.

But there some facts about student loan you should be aware before applying for one. They are as follows –

Loan coverage Educational loans are known as an all-round investment because they go beyond covering the tuition fees. The loan also includes the cost associated with your degree, right from the course starts till you graduate. As such, the credit covers expenses concerning the hostel and rent. Moreover, it includes the costs of books, study equipment, travel, food, and other finances that students need to bear.

Loan cost While the Indian bank or NBFC may sponsor the education loan, you can avail it for overseas studies as well. Students who go abroad for studies have the chance of finding employment in the place where they have studied. You earn in foreign currencies and take advantage of the depreciating value of INR. Say, you went to the USA and took out the credit when the cost of INR to USD was INR 65 for USD 1, and you start repaying at INR 70 for USD 1. The currency depreciation works in your favour.

Subsidised loans The student loan in India is offered not only to students from affluent families but also the deserving students who come from families without enough annual income. Those coming from families with annual income less than INR 4.5 lakh can apply subsidies on their loans. Subsidised loans are those wherein the student only repays the principal amount while the Indian Government pays the interest component of the loan. However, such an investment is available only studies within India and not abroad.

Flexible repayment Banks usually charge a prepayment penalty if you repay the credit before the chosen tenure. According to the RBI mandate, lenders are unallowed to charge a prepayment penalty for such loans. You easily prepay the credit without worrying about the incurring penalties. You can also close the loan after repaying a minimum of six EMIs.

Moratorium period Lenders understand it is not easy to get a job after completion of education. They accept the competitive market and offer a concept called the moratorium period. It is the phase immediately following your graduation, during which you need not worry about EMIs, and it lasts for six months to a year. You begin repaying the education loan after completing the moratorium period.