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Mar 27
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Mistakes to avoid while taking education loan

Mistakes to avoid while taking education loan

Higher studies or certain specialized training courses are expensive and thus, beyond the affordability of many. Sometimes, your means may not be sufficient to pay the high tuition fees of such courses forcing you to opt out. Easy personal loans such as education loans rescue you from such doldrums and save your dreams of having a bright future. It may so happen that the loan you take is beyond your credibility to pay back. You should try and avoid making few mistakes which can make your life difficult if you opt for such education loans.

Taking excessive loan than your necessity

Taking loan more than what is a dire necessity is a crime you can commit for yourself. You must calculate the amount which you may need to for your tuition fees, books, and the accommodation, if any required for a hostel, sensibly and apply for best personal loans. You have to remember that the more loan you take will unnecessarily increase your debt burden. The loan should be taken for necessities, not comforts or luxuries.

Choosing the right financial institution to apply for

Where to get personal loans, is very important as this decision has to be taken wisely. There are many financial institutions offering student loans. The rate of interest, loan repayment terms, and conditions, payback period etc. have to be compared. The selection should be such to avoid extra burden of debt on you.

Observe the moratorium period                                      

Moratorium period is the period you get to repay the loan after the completion of your course. In some cases, it is one year from the completion of your course. In others, it is 6 months after you get a job. Some of the loans you take may be low rate personal loans but do not allow a good moratorium period.

Secured or unsecured

For a student, it is advisable to go for quick unsecured personal loans. Banks or financial institutions need a cosigner or guarantor to approve your loan. Unsecured loans are preferable since securing any property against the loan is beyond the reach of many students given the financial credibility. In some cases, cosigner or co-borrowers also refrain from securing their property for availing a loan.

Remember, fast personal loans are not the only option for you. Try and get scholarships if offered by the institution where you wish to study. Keep regular track of your borrowing and try to earn by way of part-time jobs. That will not only take care of your other necessities but will help you in the repayment of your loan easily. You have to keep in mind that your loan is to meet your educational needs, not for recreational needs. So you have to try and pay the EMIs if any by way of your earnings.

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