For a person to succeed in this life, most probably they’ll need quality education on their areas of interest. However, it will cost you some huge cash to get the proper education, making graduating nowadays very expensive. The cost of learning in a reputable institution is quite high, which imposes a huge burden on both the parents and students. Bearing all these in mind, an education loan will, therefore, come in handy. They are personal loans given specifically for studying.
What is Included in an Educational Loan?
A student is the main borrower of these loans. However, parents, siblings, and spouses can be co-applicants too. It covers basic course fee and other costs such as college accommodation, exam, among other expenses related to learning.
Who is Eligible for this Loan?
To qualify for it, the applicant must be a citizen of that country. In most states, he or she has to be 18-35 years old, although this age limit varies depending on a particular country. Often, the lender will also require that you have an admission letter from the specific university of your choice.
Things You Need to Know About an Educational Loan
It’s a debt like any other
Well, getting this loan should be a difficult process, but many people take it lightly. It is like any other credit and in many ways. However, there are significant differences that make it more dangerous than the other credit. It’s essential that if you are thinking of borrowing funds to study, you think it through and through. It’s best that you understand the ROI of your college before even applying for this loan.
Understand the collateral
With other loans, there’s always something secured against it by the borrower. The same case applies to educational ones. Remember that the collateral is your future. The borrower assumes that after getting an education, you’ll earn more money so you won’t struggle to repay the debt. If you can’t afford or skip a payment, a lender will garnish your wages.
Understand loan details
Some of the things you need to understand include:
1. Interest Rate
Interest is extra amounts you pay on top of the money you were given. It’s always advisable that you start paying it on the same day you borrow instead of waiting for the repayment period to start, that is, after school for most people.
2. Borrowing Limits
There are limits concerning how much you can borrow. The total money you’ll be given depends on the year you are in school. Since it is believed that your chances of finishing school decrease with each additional year, the loan limit increases with time. Well, you can think of upgrading to your loan limit as you progress in your studies.
3. Repayment Policy
For most personal loans in Singapore, which are specifically for education, you don’t have to start repaying while you are in school. And one is given some grace period after they’ve graduated. You have to check the repayment policies to plan on how you’re going to pay back. Educational loans come to your rescue when you need to study, yet you are stranded. However, it’s best that you understand everything that entails to this loan and select the best program for your needs.