Impact of Education Loans on Your Financial Future

Impact of Education Loans

Impact of Education Loans: Education loans have become one of the most sought-after loans in present times. A lot of students dream of a top-quality overseas education and quite often the only way to make this dream achievable is through education loans. As per data provided by the Ministry of Finance, over 4.60 lakh students availed of education loans in the past 10 years to study abroad. However, it is prudent that you do thorough research before applying for a loan. To avoid any negative impact on your financial future, it becomes necessary to make sound financial planning about the repayment of your education loans. In this blog, we aim to understand the various advantages of taking an educational loan and its impact on shaping your financial future.

Encourages You to Save More

Education loans help in developing a habit of saving in students. It has been seen that students who take education loans start saving from an early stage in their lives. Most of the students also take up internships or part-time jobs to pay for their education loans. The extra money that is earned through a part-time job can be contributed towards monthly savings and can later be used when the need arises. 

Also Read: Benefits of Education Loans: Features and Advantages of Why You Should Take An Education Loan!

Inculcates Financial Responsibility through Loan Repayment

An education loan not only helps you in financing your education but also inculcates financial discipline. Your credit score improves to a great extent when you repay your loans regularly. A good credit score makes it easier for you to avail of future loans. If you and your family members need to take a loan later in life such as a home loan or a vehicle loan, you can easily get that if you have maintained a good credit score. A credit score of 650 and above is generally considered a good credit score. 

Provides a Comprehensive Coverage

Another benefit of taking an education loan is that the expenses covered under it are comprehensive in nature. An education loan covers a wide range of expenses including examination fees, travel expenses, and hostel fees. Thus a student only has to take one single loan for a variety of expenses that may occur until the completion of the course. Most of the education loans provided today by banks cover a range of expenses that may include:

– Fees payable to college/hostel, examination fees

– Library and laboratory fees

– Travel expenses and passage money for studies abroad

– Insurance premium for the student

– Expenses incurred on the purchase of books, equipment, instruments, uniforms

– Purchase of computers

– Any other expenses required to complete the course like study tours, project work, thesis, etc.

Also Read: The Importance of Having and Maintaining a Good Credit Score and Rating

A Step Towards a Better Future

One of the main benefits of an education loan is that you can continue your higher education without any stress or financial burden. And a degree from a prestigious university can help you in getting a well-paying job and a promising future. Thus, an education loan not only helps you in achieving your academic goals but also helps you in building a better future for yourself.

FAQs

What are some of the advantages of taking an education loan?

Some advantages of taking an education loan include:
-It covers a broad range of expenses.
-It allows you to continue your education without any financial stress.
-It helps you achieve your dream of studying at a reputed university.
-It inculcates financial discipline through timely loan repayments

Are there any negative impacts of taking an education loan?

It all depends on how you repay the loan. If you do thorough research before availing of the loan and plan out the repayment process well, then an education loan is actually a very good option for you to fulfil your aspirations without any financial burden.

What kind of impact can an education loan have on your financial future?

Education loans largely have a positive impact – the reason why most people opt for them. It largely depends on your planning i.e., what kind of loan you take and how you plan to repay it. If you opt for a loan with a low interest rate and sufficient loan repayment period, then the loan can decrease your financial burden and also help you in achieving your aspirations.

In this blog, we looked at various advantages of taking an education loan. Education loans have become a common choice among students planning to study abroad. They have a positive impact in shaping one’s financial future. Education loans make it possible for students to get into top universities and build a promising career. They not only help in developing good financial discipline but also help in building a strong credit score. 

To know more about education loans, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience. Follow our social media handles on Twitter, LinkedIn and Instagram

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