Did you know that the education inflation rate is ~11-12%, which poses a serious challenge when accessing quality education? A loan for education can help you tremendously, as it will effectively bridge the gap between you and your academic aspirations. There are different types of student loans based on various factors. So, if you are planning to opt for a student loan, here are the types of student loans you must know about.
Key highlights:
Types of Education Loans
Student Loan Types Available Based on Collateral
Two Different Types of Student Loans Based on Location
Types of Education Loans Based on Courses
How to Select the Best Type of Student Loan
Types of Education Loans
Whether you want to opt for an overseas education or you want to study in India, various types of study loans are available. Let’s understand these types better.
Student Loan Types Available Based on Collateral
Secured (with collateral) and unsecured (without collateral) are two types of student loans. Secured education loans will require an asset as a security against your student loan. Some commonly accepted assets as collateral are residential property (apartment/house), fixed deposits, and non-agricultural land.
On the other hand, unsecured study loans do not require you to offer any asset as collateral. Most financial institutions offer both types of education loans, and you can select the one that aligns with your financial requirements and personal preferences.
Two Different Types of Student Loans Based on Location
Student loan types available based on your study destination are domestic education loans and international student loans. If you want to study in India, you can opt for a domestic education loan.
If you want to study in mainstream destinations such as the US, the UK, Australia and Germany you can opt for an education loan for abroad studies. Education loans for studying abroad are also available to study in other locations such as Ireland, Sweden, the Netherlands, Spain, Italy, the UAE, and more.
Types of Education Loans Based on Courses
Whether you want to opt for a bachelor’s degree, master’s degree or a PhD, you will find a student loan that meets your requirements. Nowadays, everyone understands the importance of enhancing skills to stay relevant in the job market and hence opts for skilling programmes. Also, some working professionals look forward to pursuing executive courses to climb the corporate ladder.
Financial institutions have come up with various types of education loans to cater to the varied needs of the student community. Education loans are available for mainstream courses such as STEM and MBA and other off-beat courses such as Food Technology. Student loans are also available for skilling, upskilling, reskilling, and vocational courses.
Note: Please remember that financial institutions often have tie-ups with universities to enable a seamless experience. So, please get in touch with your chosen lender to understand if they cover your university or course.
How to Select the Best Type of Student Loan
If you have to select from 2 types of student loans, i.e., international or domestic student loans, you should always go ahead with the one that matches your expectations. Thus, you must first self-retrospect to identify your academic path and later decide on the type of student loan.
You must conduct thorough research to understand the course, university and study destination you want to opt for. This will direct you to the best type of student loan based on your preferred location. To choose between secured and unsecured student loans, you must evaluate your financial resources and needs.
At Avanse Financial Services, we understand the significance of quality education. Therefore, we enable students to achieve their academic dreams by offering hyper-personalised financing solutions.
We offer several benefits, such as 100% financing, quick loan sanctions, and flexible repayment options. You can learn how to calculate EMI for an education loan by using our online Education Loan EMI Calculator. If you have any queries, please direct them to us. We will be glad to assist you.