From the end of 2024, more than 1.33 million higher education students will follow abroad according to the recent report published by PTI. This is a significant increase compared to the past years, this fact was presented for the Indian parliament some time ago. It emphasizes the growing trend of Indian students who pursue higher educational prospects abroad.
This brings us to the question, about the meaning of taking a student loan, ie the advantages and disadvantages of studying abroad. This article is devoted to the discussion about the advantages and disadvantages of taking student loans for taking educational opportunities in the future.
NBFCs witness robust growth in educational loans
The leading financial companies of India (NBFCs) witness an enormous growth in their educational loans according to a recent Krisil report. The report estimated the capital (AUM) to exceed £60,000 crore from £43,000 crore last year. This is driven by the fast -growing demand for foreign education and increasing inflation and costs of higher studies.
What are the current rates for educational loans in India?
Interest rates that are offered on educational loans in India are different for different banks. The rates are offered by State Bank of India at 9.90% per year. Icici Bank offers rates in the range of 9.50% and 14.25% per year. HDFC Bank offers loans of 9.50% per year on April 2025. However, it will be advisable to check individual banks for the changes and updates for the last position in the rates.
Note: The interest rates that apply to the above loans are only indicative in nature. For the latest information, associated interest rates and updates with regard to the same contact with your respective financial institution.
What are the benefits of taking a student loan?
- Easy accessibility: Student loans are easy loans that offer financial assistance to people who normally do not have the money to pay tuition fees, costs of living, money to buy money and other education costs.
- Reimbursement is postponed: Most educational loans offer the option to repay after graduation, which relieves financial debt tax during the study time. This is offered with the clear understanding that students cannot earn money at the same time during educational periods.
- Helps improve credit history: Regularly done on temporary payments helping to set up a good credit history, this is very favorable for the future. Because it ensures that every future loan will be easily available and accessible in a flexible way in simple interest rates.
- Repayment options are provided with flexibility: Lenders ensure varied repayment schemes and modes such as options that are reassuring, depending on the income of an individual. For this, keeping your lender is well informed to be the best way to deal with.
What are the disadvantages and things that need to be noticed before taking a student loan?
- Debt: A loan comes with the possibility to build up debts. For this reason, people who take loans at their young age can find it difficult later and it can take decades before they can pay the debt. This can also affect your credit score.
- Accumulation of interest: A loan episode, if not properly checked, can lead to accumulation of interest. The interest that is collected over time increases the total amount to pay back.
- Financial and emotional pressure: Monthly EMI return payments can lead to financial and emotional pressure. This denies financial independence and prevents economic stability.
- Risk of standard in a serious condition: Not repaying now will lead to standard, so that credit profiles and credit scores are negatively influenced. This makes every future loan very difficult to secure.
Conclusion
That is why student loans can be an extremely crucial tool to meet the tax needs, but one has to weigh the advantages and disadvantages against the likely limitations and difficulties to find the aforementioned loans.
Potential applicants must therefore be critical thinking, analyze their tax capacity and get to know the conditions of the loan before they continue their loan applications.
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