If you wish to pursue higher education, then you will need an education loan. The cost of education loan has reached new heights, and the only way to deal with it with the help of an education loan. However, education loan interest rate is very high, so you will need to manage it through meticulous financial planning. Still, that is not the only challenge that you face when you apply for a loan. Traditional educational loan presents many challenges. Let’s check them out:
Challenges of Education Loan in India
There are a lot of challenges to the traditional education loan in India. These range from the rate of interest to collateral. They are:
The loan presents an extremely high risk for the lenders. The reason for this is that education presents numerous uncertainties that the lender has to account for. While every lender faces some amount of uncertainty, when it comes to education, it is a lot. The repayment of the loan is contingent on the facto whether the applicant would finish the course and whether he or she secures a job that pays sufficient amount.
Banks allow loans without security and guarantee if the loan amount is lower than 4 lakhs. However, since education has become very expensive, you will need a higher amount of loan. Therefore, you will have to either find a guarantor (if the amount is below 7.5 lakhs) or provide something in collateral.
If you wish to study abroad then you are bound to face more challenges. One of the reasons is that while some of the universities have a global reputation, some do not. So the lender is bound to charge a higher education loan interest rate, if the university is not well-known.
Despite all the challenges, it could be necessary for you to avail loan from a bank. However, you need to know that it may be possible that a lot of the things will not be covered under education loan. In such scenarios, you should choose PaySense to ensure that you get instant loans to cover aspects that bank will not. Not only will you be able to receive the loan immediately, but the interest rate will be dependent on a combination of factors including your credit history and rating.
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