Student loans play a big part in the cost of attending college. It is not unexpected that this has caused a lot of misunderstandings and false beliefs concerning student loans. The following myths about education loan for international travel should be avoided. This makes it easier to stay out of a financial mess.
In order to study overseas, you must be wealthy.
It is all too easy to assume that a student who is pursuing a degree abroad must come from an affluent family. In reality, the vast majority of people still hold the misconception that only families with ample financial resources may send their children to study abroad.
Due to the cost of studying abroad ten years ago, this myth had more merit. However, the situation has changed. Students can now submit applications for scholarships and the various loan schemes that various loan lenders offer for student loans.
Government banks also provide interest-subsidy schemes for student loans for those coming from less stable financial backgrounds. The ability of a student is ultimately given precedence over their financial position.
Self-financing is preferable to borrowing money for schooling.
Wealthy families are more likely to think that paying for education themselves is better than borrowing money. Amass the required documentation because they don’t want to go to the bank. and wait for the loan to be granted even if they have the means to make all the necessary arrangements.
One of the most notable benefits of an education loan for abroad studies. The student loan income tax exemption is referenced in Section 80E of the Income-Tax Act of 1961. This section enables you to deduct a set amount from your ITR for the interest you paid on student loans.
To obtain a loan for schooling, you must have collateral.
We generalized it to student loans and spread the word that collateral is necessary for student loans. Considering that everyone is aware that all loans, including those for cars and homes, demand collateral as security.
For student loans, collateral security is indeed necessary. But it’s not necessary for this to be the case at all times. There are two types of education loans available to international students. Based on the requirement for collateral, secured loans and unsecured loans are different (Which do not require collateral).
Better than a secured loan is an unsecured loan.
Customers should apply for an unsecured loan initially because they are not required to put up any security. because there is less paperwork and it takes less time.
Unsecured education loans are typically provided by private banks and NBFCs. Private banks may charge an ROI of up to 13.5%, as opposed to public banks, which are only permitted to charge an ROI of 9%. Private banks have a predetermined list of colleges in addition to the ROI. Because they only provide loans for higher education.
A greater loan amount is available with a lower ROI and more advantages. If you choose a secured school loan from a government bank, this includes a longer repayment duration and a payment-free moratorium period.
The loan must be repaid while you are enrolled in the class.
This is only partly true for private lenders like private banks and NBFCs. It is untrue in the case of government banks.
Most government banks provide a time during which payments are not made. In other words, candidates who took out student loans from public banks do not have to begin making loan repayment instalments until the moratorium period has passed. (Length of course plus 6–12 months)
The co-applicant or student is only required to start making interest payments with private lenders, though. while the actual moratorium is in effect (Rarely do private lenders ask for EMIs payment right after the first disbursement).
Repaying student loans is a hassle.
People tend to remember unpleasant news more vividly than positive. Many more pupils have improved their money management skills. They pay back loans on schedule. But after hearing about a few students who didn’t, many people assumed that paying back student loans was a burden.
The student can always take part-time employment because their living and other expenses are completely covered by their college loan. Start saving money for the EMIs and interest payments during the moratorium period by taking a job at a university job to earn a weekly income (in the case of private banks and lenders).
Conclusion
We already know that it’s not always easy to get accepted to study abroad. One of the many essential steps that make up the total process of pursuing higher education abroad is finding appropriate funds. Avoid falling victim to any of the many misconceptions regarding student debt by staying informed. If you need assistance with your student loan application, you may get in contact with our experts by requesting a callback.
