Experts suggest that a person should not take an education loan for fancy courses or just to fulfil the desire of obtaining a degree from a foreign university or college.
New Delhi: Education loan is a specialised credit facility offered by almost all scheduled commercial banks, non-banking financial corporations, and other credit lending firms to meet the expenses incurred in higher education. There are numerous plans and schemes under which the education loans and study loans are extended for higher studies in India and for several courses abroad.
Taking an education loan from the banks and utilising it for a course which is not required or which is not in line with the principal interest of the student may lead to an unnecessary burden on the applicant and co-borrower. Before availing any credit facility, a borrower, applicant and the student should thoroughly evaluate the possibilities of upcoming opportunities after the completion of the course along with the pros and cons of education loan schemes offered by various banks.
A SWOT (strengths, Weakness, Opportunities, Threats) analysis can be done with respect to the selected course in order to assess whether the expense of multi-million rupee is worth it or not. Taking high quantum education loan for a course which may not be beneficial in future or which may not guarantee a fruitful career might increase the troubles of the applicant and the co-borrower when the repayment tenure starts.
Experts suggest that a person should not take an education loan for fancy courses or just to fulfil the desire of obtaining a degree from a foreign university or college. Opting a course just for the sake of going abroad doesn’t translate into a lucrative career. Enrolling in a course in a foreign university which has very few opportunities on the basis of education loan may harm the credit profiles of both the applicant and co-borrower.
A large section of students ends up doing into part-time jobs, seasonal assignments in order to support the co-borrower or themselves in the repayment of hefty EMIs of education loan. A person taking an education loan of more than Rs 5 lakh should make sure that there would be ample opportunities after the completion of the course and should cross-check if the existing liabilities over the family and the co-borrower.