What Are School Loans and Their Benefits?
Are you confused regarding school loans and how does it work? If yes, then you are in the right place as you will get to know everything in detail here.
School loans are loans that are taken by the student for education purpose and it is paid by the parents. School loan is a type of loan that is taken for higher studies and it is issued by the bank.School Loans; A student can get a loan if he/she is getting funds from the state government or from the bank, but it is not compulsory for a student to take a loan.
It is the parents who take a decision of taking school loan and it is very important to note that taking a loan by the parents will not change the child’s future prospects.
What are the benefits of taking a loan?
There are many benefits of taking a school loan and it includes:
It helps you to study under budget
It helps you to save money to complete the course without spending a lot of money
Helps you to manage the household expenses
If you have taken a loan then it is very important for you to clear your dues in time, otherwise, it can result in loss of your chance of getting a good job and that can affect your earning capacity.School Loans;
How Does a School Loan Work?
If you are planning to take a loan to study, then it is essential for you to know the basic rules of the loan.
The school loan is payable over the period of time which means the child will have to repay the debt in his/her lifetime.
It is important for you to know the repayment schedule and the interest rates to know the exact amount that you will have to pay.
You need to keep in mind that you will have to pay a fixed interest rate for the entire tenure of the loan.
If you have borrowed a sum of Rs 1 lakh for the term of three years and your interest rate is 12% then it will amount to Rs 60,000 per annum.
The total amount that you will have to repay will be calculated by taking into account the principal and the interest rate.
How to Apply for School Loan
If you are planning to take a loan for higher education then it is very important for you to know the steps to apply for it. If you are aware of all these details then you will be able to take a smart and informed decision.
Applying for a loan is a simple and easy task. You just need to make a visit to the branch and fill up the loan application form. Make sure that you have the required documents ready to be submitted to the bank. You can submit your passport or you can take the help of your friends and relatives to get your document and other relevant documents.
also read this: The 7 Secrets of Easy, Instant Access to an Instalment Loan
You will be provided with a draft for the entire procedure, after which you will have to sign it. You need to pay a processing fee of Rs 600 at the time of signing of the draft and you will also have to pay a processing fee of Rs 200 if you want to pay online.
Once the loan has been approved
What Are Student Loans?
Student loans are loans given to students for a higher education. The first student loan was given by the Bank of England in 1769 to one man, John Waring. However, this is the first student loan, which was for a person’s higher education.
In the past, student loans were only given for post-graduate studies. School Loans;But today, they are available for any kind of higher education. The student loans have become necessary because the college and university fees are very high, and some of the countries have reduced their taxes.
Types of student loans:
Nowadays, there are two types of student loans, namely, direct and private student loans.
Direct student loans: These are the most common student loans. They are given by the colleges, universities, and government agencies.
Private student loans: They are given to students by the banks, credit unions, and other financial institutions.
How the loan is repaid:
The repayment of the loans depends on the type of student loan.School Loans; Direct student loans are generally paid after the completion of the graduation, whereas, private student loans are repaid according to the student’s income, and also the amount of money borrowed.
The interest rate of these loans is also different depending on the type of loan and the duration.