A loan is a sum of money which is provided by banks and financial institutions to the borrower for various purposes at an interest rate. One of the purposes of the borrower for taking a loan is the education of his or her child. As we all know, education is the most important factor for the growth and personality of the individual. Education is considered an expensive investment in a child. Some parents can’t afford the high tuition fees for their children, so they prefer a loan, which is known as an education loan. There are various criteria, features, and benefits of an education loan. This article provides a general overview of the understanding of education loans.
What is an education loan?
An education loan is a sum of money borrowed by a student to pursue his or her secondary or post-secondary education for the betterment of his or her life. An education loan works as a relief for parents in terms of financial arrangements for tuition fees for their children. Each individual’s primary concern is quality education; however, the high tuition cost stifles the dream of quality education. Thus, education loans are the most effective tool for pursuing a high-quality education. For more information, visit good at Money Lending in Toa Payoh.
Various types of education loans
There are different types of education loans based on the courses pursued by the student, location, and collateral.
Students are loaned money based on the courses they want to take at their school. The main three courses which are pursued by the students are undergraduate courses, post-graduate courses, and career development goals. Each course holds a significant place in the career of the student.
Students also get loans on the basis of the location of the institution. For instance, if an individual is pursuing his studies in his home country, then there will be different compliances as compared to the students who have pursued their studies abroad.
Financial institutions and money lenders also grant loans on the basis of collateral security, like grant loans on the basis of property, deposits, and on the guarantee of a third party.
Eligibility for an education loan
To avail an education loan for a student, certain documents are required. An individual should submit a fee structure, admission letter, marksheet of 10th and 12th class, KYC documents, etc. to the concerned financial institution. It should be noted that the student must be a citizen of the country in order to qualify for the loan.