It can be expensive to pay for your education. You might not even have the corpus in some cases if the education is more advanced and exclusive. Student loans go about as a mate in these circumstances!
In India, you can get a student loan for anything from the beginning of nursing school to higher education. They are widely available and adaptable. However, one ought to be aware of a number of fees associated with student loans.
If you plan to apply for an education loan soon, you should be aware of the implicit costs. The specifics of these added costs are as follows:
Loan processing costs: The bank will process your loan for a small fee. This fee typically amounts to one to two percent of the sanctioned sum.
Fees for prepayment: If you wanted to pay off your student loan before the agreed-upon term, banks used to charge prepay fees. However, in accordance with the RBI’s announcement, no banks would impose a pre-payment penalty.
Late Payment: Late payment fees are possible with any loan or credit card, and they are the most common. Additionally, keep in mind that defaulting on payments on a regular basis can lower your CIBIL score, making it more likely that you will be turned down for credit in the future. So make a point to constantly make your EMI installment on time.
Conversion of interest types: If you choose to switch from a loan with a fixed interest rate to one with a floating interest rate, or vice versa, you will be required to pay a small fee. When a borrower’s interest is changed, even though you are making money in this situation, the bank still loses money.
Loan Cancellation: If you cancel your education loan for any reason, banks will charge a small cancellation fee equal to a percentage of the sanctioned amount. The ideal value for this fee would be less than 2%, but any applicable tax will only exacerbate the situation.
