Interested in applying for an education loan? Learn what your bank won't disclose

Digital Desk: Education is a right that each individual should have. However, higher education has become increasingly expensive over time, particularly when specialised courses are pursued. 

As everyone can't afford to pay the whole cost of their courses, many opt for an education loan, which many banks provide. An education loan is a sum of money that a student can borrow from a financial organisation to pay for his or her academic obligations. 

When applying for an education loan, a student should consider not just the interest rate but also other factors. 

According to experts, starting early in the loan process could be the key to saving lakhs of rupees. "Beginning early allows you to seek out better lenders, have more time for discussions, lessen competition, and get better bargains on flights and lodging. If you begin early, you will be able to compare numerous lenders based not only on interest rates but also on maximum loan amounts available, processing fee and insurance reductions, special school programmes and scholarships "Shivani Mani of GradRight explained.

According to experts, getting a foreign degree will become more expensive in the coming years, but this should not deter students because the investment return will be beneficial for the quality of education, professional advancement, international exposure, and skills developed. 

"If a student took a loan in March this year when the rupee was at 75 against the dollar, it would add a few lakh to the loan; it is a public benefit corporation that helps students study abroad; Rs 7 would have been added for every dollar of the loan, and the same has inflated the loan as well as the interest," said Amit Gupta, MD, SAG Infotech.

However according to expert Gupta, excessive inflation is harming Indian students studying abroad, and they do need to help themselves because living expenditures have risen. 

As said by Gaurav Kapoor, director and co-founder of Fincorpit Consulting, the psychological impact of the rupee depreciation will affect the minds of US and European students, as well as their parents. 

"Interest rates for MCLR and BPLR loans might climb in the future. The EMIs of current and subsequent borrowers would rise as a result of this. The rise in interest rates is projected to continue in the future; key analysts believe that base rates will stabilise once they reach 6 to 6.5% "Kapoor stated.

SBI charges an interest rate of 10.55 percent on education loans, with a 0.5% discount for female students. However, if a student attends a prestigious college such as IITs or NITs, the rates are lower.

Bank of Baroda charges 10.45% interest on loans up to Rs 7.5 lakh and 10.85% interest on loans exceeding Rs 7.5 lakh. The interest rates differ from the Bank of Baroda (BOB) education loan programmes. 

The loan interest rate varies by bank. Axis Bank's rate is 15.2 percent for loans up to Rs 4 lakh, 14.7% for loans between Rs 4 lakh and Rs 7.5 lakhs, and 13.7% for loans exceeding Rs 7.5 lakhs. The ICICI Bank's school loan interest rate begins at 10.5 percent, whereas the HDFC Bank's begins at roughly 8.64 percent.