The sharply rising costs of education have created a significant financial burden on Indian households. In this regard, resorting to an education loan can be a viable option instead of burning through savings.
Although tailor-made financial products like these present a lucrative offer, calculating EMIs and the total repayable amount is critical to make an informed decision.
How to calculate education loan EMIs?
The formula for EMI calculation is [P x R x (1+R) ^ n] / [(1+R) ^ n-1]. Using this mathematical formula, one can find the monthly instalment amount. However, manual calculations are often fraught with mistakes, which can affect the final decision to calculate EMI for an education loan.
Thus, resorting to an online calculator for this purpose is ideal. Online devices like these use the same mathematical formula but deliver a faster and accurate result. Moreover, using them is also easy.
After visiting the calculator webpage, borrowers need to enter particulars like the loan amount, interest rate, and tenor. It will instantly display the total payable amount and EMIs. Moreover, debtors can vary these values to determine a loan offer that meets their requirements.
Being aware of the EMIs and total repayment amount can help individuals plan their finances accordingly. However, to make a decision that will be the most suitable for them, individuals need to consider a few more pointers other than EMIs and the total outstanding sum.
4 points to check for a perfect education loan offer
Following are some points that one must review to find a suitable education loan offer –
1. Availability
The first point to check regarding education loan is their availability for specific universities and courses. Since lenders have particular guidelines regarding this, it is ideal to review this point to secure a loan. Simultaneously, they should also consider a few tips to manage their finances better while studying abroad to make the most of the borrowed sum.
2. Interest rate
Similar to other credit instruments, it is vital to review the education loan rates before applying. Doing so will help borrowers get an estimation of their total debt. They can also compare between different lenders to make a knowledgeable decision.
3. Loan tenor and repayment options
While searching for an education loan for abroad, one should consider the repayment tenor and payment options. Having clarity over these two aspects can aid individuals in adequate financial planning.
4. Eligibility criteria and documentation
Another significant point to review before applying is the education loan eligibility. Since these parameters differ across lenders, borrowers must compare multiple financiers before opting for one per their suitability.
Similarly, they should also keep in mind the documents required to ease the application process.
Education loan is a tailor-made financial product equipped with a particular set of advantages. The primary one being, its repayment starts after a borrower or student completes the studies.
At the same time, it features specific limitations as well. For instance, one can only pay for tuition and accommodation. However, studying away from home includes other expenses not covered by this credit instrument.
In a situation like this, an education loan on property can be a potent alternative. Loan against property has gained prominence in recent years owing to the following benefits –
- The loan amount is substantial.
- No restriction over its usage.
- Property loan come at affordable interest rates.
- It does not include paying any hidden charge.
- Documents needed for a loan against property and eligibility criteria are minimal.
Leading financial institutions also extend pre-approved offers for simple loan availability. Applicable to an array of secured and unsecured loans, it streamlines the application process and saves time. Borrowers can now check their pre-approved offers online.
Here are a few suggestions to repay a higher education loan against property efficiently with ease.
1. Part-prepayment
To reduce the outstanding principal amount and mortgage interest rate, go for part-prepayment of a certain percentage of the loan against property for education whenever you find it possible with available funds. It will result in reduced interest outgo on EMIs.
2. Debt Consolidation
A borrower can consolidate all his/her existing debts into one. This way, you need not pay several EMIs and save on cost, depending on your negotiating aptitude.
3. Repayment Assistance
Borrowers can find a job with an employer offering repayment assistance.
4. Short-term Loan Tenor
Loan Against Interest rates depend on several factors. Loan tenor is one of them. If possible, opt for a shorter tenor.
5. Balance Transfer Facility
Borrowers can take advantage of a balance transfer facility offered by a few major financial institutions. It may help you to lower the rate of interest.
Securing an education loan may not be a hurdle anymore, but considering the EMIs and other associated factors makes way for a convenient borrowing experience. Individuals can also consider a loan against property as a better way to finance their child’s education as it comes with zero end-use restrictions and at affordable rates.