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Is It Good to Take Out an Educational Loan or not?

I am unable to directly respond to your question with a yes or no because it all depends on the path you intend to take and your probable ability to pay back the loan.

Additionally, today’s tuition prices are soaring. It is difficult for parents to make financial arrangements using only their savings and current provisions. Applying for the loan is a fantastic idea if you have been accepted into a reputable university and program.

After mortgage loans, education loans rank as the second biggest source of consumer debt globally.

A student loan can change your life in both positive and negative ways. You must be in your most sage frame of mind when choosing to take out that college loan because it is one of the most important decisions you will ever make.

Without a question, taking out a student loan is a fantastic idea, but only if you are very certain about it.

Do the following to assist you get a student loan:

Conduct in-depth research: Thoroughly investigate the market for student loans before conducting additional research. Find the interest rate with the lowest repayment need by comparing them all. 

Choosing short-term payments over long-term repayment: Short-term repayment not only helps you pay off your debt faster, but it also prevents you from having to make a sizable payback.


Realize what you can expect to earn: First, focus on the course with the best employment prospects. The majority of loans for international education are used to study STEM courses abroad. Take out loans only if they could be quickly repaid from your future pay. Consider your expectations carefully when calculating your projected compensation.

Why is it worthwhile to take out a student loan?

Tax benefits
There are some perks offered under Section 80 E of the Income Tax Act that will help you if you start earning money and have to start repaying the loan.

Safeguarding of savings
By accepting the loan, your parents will avoid having to spend down their money.

Increasing financial security
You have the chance to take the first step toward becoming a responsible adult. If you took out an education loan and paid it off in full with your own wages after you finished the course, you will feel wonderfully emancipated and accomplished.

Keep in mind that lenders have severe requirements for loan eligibility; if you do not meet these requirements, your loan application may be denied.

Let’s examine a few of the standards.

  • Certain banks only provide student loans if you have been accepted to a university that complies with their admissions policy.
  • The majority of lenders want a co-applicant or guarantor.
  • When authorizing the loan, the expected value of the course and potential earnings after completion are taken into account.
  • Some financial institutions have established a minimum percentage that borrowers must obtain in the program they are currently enrolled in. The minimal rate for working professionals would be for the most recent course taken or as determined by the lender.
    Before the EMI payments begin, there is a grace period.
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It is unquestionably worthwhile to take out a student loan. However, there are qualifying requirements and terms for these loans. You can ask your parents to look into alternative financing choices, such as a personal loan for school or a loan against property (if a longer tenure or greater loan amount is needed), if you are for any reason ineligible for the loan.

However, keep in mind that, unlike an education loan, which must be repaid only after your degree is finished, these loans would compel your parents to begin paying EMIs as soon as the loan amount is released.

You can always look into a personal loan if, for any reason, you are not approved for an education loan. Although the requirements are less strict, only candidates with a reliable source of income, a strong credit history, and adequate paperwork will be approved for a personal loan. No-income students are ineligible.

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