10 July 2024
While studying abroad comes with plenty of opportunities and better career prospects, it comes with several concerns. And perhaps the biggest one is funding. In fact, financial issues can hinder your studying abroad dream. Luckily, there are many funding options available such as educational loans and scholarships so that you can fulfil your dream of studying abroad.
In this post, we have busted misconceptions about loans and scholarships for higher education abroad, offering facts to parents and students who wish to pursue study abroad opportunities.
Student Loans are Always a Bad Idea
One of the biggest misconceptions is that student loans are inherently bad. While it’s true that borrowing money should be done with caution, student loans can be a valuable investment in your future. Education often leads to better job opportunities and higher earning potential. When managed properly, student loans can be a smart way to achieve your career goals.
It’s essential to understand the difference between good debt and bad debt. Good debt, like student loans, typically provides long-term benefits and a higher return on investment. On the other hand, bad debt, such as credit card debt, often comes with high interest rates and no tangible long-term benefits.
Only Needy Students Should Borrow Money
The notion that only students from low-income families should take out loans is misguided. College is expensive, and many families, regardless of income level, may need to borrow to cover the costs. Student loans can be a valuable tool for financing your education, enabling you to focus on your studies rather than financial worries.
Remember, borrowing responsibly is key. Only take out what you need and have a repayment plan. Research your loan options and choose those with the best terms and conditions for your situation.
Personal Financing is better than Education Loan
There is a common misconception that the best way to pay for your overseas education is by self-financing.
Avoiding debt might seem good, but depending just on your own money could restrict your options. Loans for education might give you the required money without depleting your family’s resources. With these loans’ flexible payback terms, you may concentrate on your education without worrying about money all the time.
Collateral is Necessary for Education Loan
When applying for a loan, collateral is not required. Another option available to students is a non-collateral loan. Many financial organizations and banks offer student loans without collateral.
Credit History is Required
Since most students are first-time borrowers, they either have no credit history or a poor credit score. The majority of applicants frequently think that a loan will not be granted if they have no credit history.
Most financial organizations adopt a student-centric strategy, assessing the employability potential of each student by looking at their profile.
Academic performance, test results for admission, university reputation, and so on are some crucial variables to determine employment. They also consider the credit histories of the co-borrowers when approving loans.
The Process of Getting a Loan is Lengthy and Tedious
Modern lenders can swiftly distribute loans and assess the profiles of applicants thanks to technologically driven operations.
If they fit their financier’s requirements, students don’t have to worry about missing the deadline for paying their tuition fees.
Loan Repayment Terms and Rigid and Fix
Banks or lenders who offer student loans also stress the flexibility in loan repayment terms.
Most of them have terms to help applicants find out how they will manage to pay back the loans, including whether or not they want to repay the basic interest or start making contributions throughout the course or post.
Low Interest Rates are Always Best:
Loan interest rates that are lower are always preferred. The idea that having a student loan with a lower interest rate automatically benefits you, though, is a major misconception.
It is crucial to consider the length of the loan repayment period, even while low interest rates may give the impression that your repayment expenses won’t add up too much.
For example, many low-interest loan programs require you to repay the loan while you are still studying. While interest rates are important, they shouldn’t be the sole factor in choosing a student loan.
There’s no way you could ever repay your loan.
Indeed, repaying student loans can seem like a big financial burden. But don’t worry—you have several choices for paying off your student loans when you graduate from college.
You can refinance your debt or apply for an income-driven repayment plan. An income-driven plan adjusts your payments based on your current income, so you don’t have to worry about a strict repayment timeline.
Refinancing means getting a new loan with a new interest rate, which might be more favourable than your original loan.
You can also use an online student loan EMI calculator to plan your repayments efficiently.
Conclusion
Understanding the facts about student loans can help you make better financial decisions and reduce stress. Student loans are a significant responsibility, but they can also be a worthwhile investment in your future. By debunking these myths, you’ll be better equipped to navigate the world of student loans and manage your debt effectively.
Education is one of the most important investments you can make in yourself. With accurate information and a solid plan, you can achieve your educational goals without falling prey to common misconceptions.
At Landmark Immigration, we offer education loan guidance for students looking to study abroad. We help you get education loans from our networks of reputed banks and simplify the loan processing. Get in touch now!
