Have an Education loan for MBA on your mind? Keep these 4 things in mind.
by anaya shroff
Published Mon, Jul 2nd 2018, 08:24 | Finance
Going in for an Education loan for MBA is always a good idea! Besides for the fact that helps you become an independent individual and allows you to pursue your further education plans without burdening your parents, it also comes with a number of other benefits. Firstly, it makes more sense that self-financing; your lender will provide you the needed funds as and when you need them during the course of your education, this means you do not need to worry about inflation as you would have to when self-financing. You’ll also be able to cover any unforeseen expenses such as additional exams to be taken, travel arrangements, laptop computers, and books. These loans also give you and/or your co-borrower access to tax benefits under section 80E of the Indian Income Tax Act. Lastly, it will do your credit score a world of good and a high credit score is so important in today’s and age. After reading all of this, you might be itching to go out, find a loan product and sign along the dotted line. However, before you do all this, there are certain things you need to keep in mind to ensure you go into the decision fully aware and well-informed and this will article highlight some these things that you need to bear in mind.
1. The kind of finance on offer. Keep in mind the type of financial aid you are receiving. Look for a deal that offers 100% finance and offer to cover additional costs. Tomorrow, you shouldn’t find yourself in a position where you need urgent funds and you have a lender that refuses to help. You might think this is a very rare situation but you’d be surprised how higher rising living expenses, inflation and increases in rates & taxes can throw bouncers at young students with little financial backing but big plans in the heads. So look for a lender that’s fully ready to cover even the smallest of things such as your entrance exams fees to the cost of books and/or a laptop.
2. Look at processing fees. Don’t stop at comparing interest rates of an Education loan for MBA, but also look at the processing fee involved. This cost can be as high as 2% of the loan amount is non-refundable even if the lender decided to reject your loan application. Some lenders have lower processing fee of around 1% of the loan amount whereas other completely skip this charge. Also compare the other charges involved such as document handling charges, late payment fees, cheque bounce charges, the cost of prepayments, etc.
3. Keep in mind Educational loan for MBA eligibility. Education loan eligibility is determined by various factors, and what a lender offers you as a loan amount might be significantly lower or higher to what they offer the next applicant. So, before you apply, it’s always wise to check your eligibility. Apply for too high a loan amount and you could be bidding farewell to your processing fee when the lender rejects your application. You can approach your lender and check your eligibility or just go online and find an education loan eligibility calculator to see the loan amount you are most likely to receive.
4. Know about moratorium period. It might be floated as the biggest advantage of an Educational loan for MBA, being that you do not have to make even a single payment until you’ve found a job or completed your course. And though it may seem so beneficial, you must know that, while you do not make any payments, your lender will still charge simple interest every year on the borrowed amount. These amounts are added to the principal amount and you’ll have to pay this when you do start repaying the loan. You can opt to pay only these interest amounts and your lender might offer you lowered interest rates for doing so. Alternatively, you can also choose start repaying the loan during the course as well, and again leverage this fact for some additional benefits from your lender.
We offer a special education loan for MBA
students of Symbiosis. Our educational loan for MBA covers 100% admission & tuition fees along with other expenses!