Education has become an important aspect in the life of an individual these days. Hence education is one of the utmost important expenses. As such an individual earner is finding it difficult to fulfill the demands of expensive good quality education for his children. Nowadays to compete with the fellow mates, for acquiring good jobs one has to continue his studies after schooling in some good institution, coaching centers. Thus the bright future can only be attained when even financial support is provided to students. This financial support has become a prerequisite for a student as well as his family to pursue higher education and attain a prosperous future and this financial assistance is provided through various banks.
College loan is one of the new features of the banks which have come up in this new era. Such loans have enabled the students to pursue their carrier brightly and without any sort of tensions. College loans basically assist in supporting a student’s education.
In other words, now the student is saved from giving up his education because of shortage of funds instead he can take such loans from the banks to finance his education expenses. Not only such loans helps in financing the fees of the college but all related expense can also be incurred using such loans which includes all expenses relating to his lodging, admittance expenses, expenses relating to services, transport charging and any other expenses connected with education.
How to get the best deals in college loans?
Certain measures are required to be taken before opting for such loans. One has to analyze various facts and figures before any financial support is taken from any source to make sure that he is not been duped.
Following are the questions which a person needs to answer for himself :
- Whether the college loan is actually required at a particular time?
- How much amount should be borrowed to finance the education expenses?
- Whether the selected institution would be of any benefit?
- What all advantage would the college loans offer?
- What would be the source through which the furrowed funds would be refunded?
After analyzing the above questions carefully and by getting a satisfactory answer one can fund the loan. It is only after analyzing the above facts that the borrowed funds would prove to be beneficial. Now we come to a crucial point in borrowing the loan that is the about the amount of loan to be borrowed as part of loan. As we know the basic two components of a college loan would be the expense of the course and its tuition fee but many other additional expenses relating to ones stay in hostel and personal needs also need to be considered before deciding about the amount to be funded. Hence an estimate is drawn after tallying such factors in mind. A new trend which has come up amongst the students these days is doing jobs along with the studies. Well this can prove to be a convenience in the repayment of the borrowed funds by the installment pay back system and amount over and above the installment can be used for the meeting of personal expenses and even work out as savings.
Various types of College Loans
College loans are available in various forms these days in the market due the fact that the demand for college loans have been increasing day by day at a very high pace. Some types of education loans are discussed below:
- FEDERAL STUDENT LOANS, Such college loans may be in the nature of subsidized or it may be of unsubsidized nature.
- SUBSIDIZED LOANS are those loans in which the amount of interest is paid by the government on behalf of the student. However for this student has to prove that he is in great need of funds.
- UNSUBSIDIZED LOANS are those in which the amount of interest is paid by the student. Under such loan the amount of interest must be paid after the completion of graduation. Such unsubsidized loan can be obtained by any student.
- PRIVATE STUDENT LOANS, Such loans are a type of incentive to the student with good academic score. These are not secured loans but secured and usually have high rate of interest because of the fact that they demand no collateral security.
- PARENT LOANS, This type of loan enable the parents to take loan for their wards to pay their college expenses. As we see that parents are in a much better condition to pay off the loan. The only thing is that the parents should be willing to do this for their ward. The rate of interest is much lower under such type of loan.
- CONSOLIDATION LOANS, Sometimes a better way of payment is thought that is conjoining all study loans. The motive behind this is that a single payment can be made to repay the entire finds rather than recurring installments. Many a times this technique is used by students when they borrow funds from various sources and then later they find it tough to repay the amount to different lenders.
Another concept which has come up is the refinancing of ones loan. A student can borrow the other loan at an invariable rate by loan combining or by refinancing. This is a very good option to refinance at the time of low rates. However we know that every situation has its pros and cons. Hence in this type of loan too there are certain shortcomings that are the duration of its repayment which is very long. The normal period of 5 years return under thus is extended unto 20 years. The profit of this scheme mainly to the banks is that the amount of interest earned by the bank over such long years. Hence for every customer it is advisable that the shorter the tenure of repayment of loan, less the interest on it and greater benefits of being qualified and prosperous future.