Tick on the Right Education Loan

AN EDUCATION LOAN MAKES IT EASIER TO PURSUE YOUR DREAM EDUCATION BUT IT ALSO MEANS LONG REPAYMENT YEARS, SO MAKE SURE YOUR CHOICE IS RIGHT

- APRAJITA SHARMA

Education is the best asset that parents can give to their children. As a parent, you want to make sure that whenever the need arises, the funds are available. But with the cost of education rising, there is a good chance of you falling short of the amount. Consider this – an MBA from IIM-Calcutta, which cost about ₹12 lakh in 2010, now costs ₹22 lakh. A Masters’ degree from Harvard on an average cost around $48,000 in 2010, included tuition and boarding. It costs around $70,000 now, according to education consulting firm Mindler.

In such a situation it is not unusual to see parents use their life savings to help their children pursue their education. Experts, however, say you should avoid dipping into your retirement or emergency fund to finance your child’s education. So, should lack of funds impede your child’s studies? No, because education loans are readily available from public sector banks and private lenders, based on the track record of the college, student’s academic performance and your own credit profile. However, one must note that the funding that makes life easier at the time of admission can become stressful at the time of repayment if you don’t choose the loan wisely. Here’s how you can prepare yourself to get the right amount of education loan for the right course at the best cost.

Get an Early Start The moment of truth is when you get the confirmation of admission along with the details of fees you have to pay. Being aware of all financial help will help you figure out how much you need to arrange on your own. You need to calculate whether you have enough funds or need an education loan.