3 tips to help you get a lower education loan interest rate

Have you always dreamed of studying at one of the best universities in India or abroad? If yes, then what is stopping you from learning at those institutions? In most cases, money or to be more precise, the lack of it is what stops students like you from learning at those institutions. To solve this, there is one solution: education loan. And they come with interest rates just like any other type of loan.

In this article, you will learn 3 tips to bag a lower education loan interest rate.

1. Calculate the potential expenses carefully -

The general rule in education loan: Higher the loan amount, higher the interest rate. Understand this and you can find ways to lower your education loan interest rate. Calculate the funds you would need to study at your choice of college—from the college tuition fees to travel expenses, accommodation expenses, library fees, canteen expenses, and stationery expenses.

Once you have calculated all the necessary expenses to the last penny, you will be in a better position to negotiate the education loan interest rate. Also, you would be able to get a loan while leveraging less or no collateral. The lesser the loan amount, the lesser the need to pledge collateral as security. If you keep your expenses low then you may get loans with no need to secure collateral as security.

2. Build an outstanding education profile -

Build an impressive education profile to bag a lower interest rate on your education loan. This tip has no substitute. The best way to build an impressive education profile begins just as you are on the cusp of graduating from high school. Earn a seat at the best junior college and score well in exams. Then appear for entrance exams and score best in them as well. This will help you to get a seat in prestigious institutions of your choice—be it in India or abroad.

Why do all this? Because financial lenders admire students that show exemplary education profiles, and offer them education loans with lower interest rates. It works this way because studying at prestigious institutions will help you gain competitive jobs, which guarantees that you will pay back the loan.

3. Choose the lender that offers lowest interest rate -
   
   The last and the most important tip: Search for lenders that provide education loans with lower interest rate bracket. This step involves visiting and talking to a lot of lending companies. You can also visit the websites of various lenders and compare the services they provide while sanctioning a loan, against each other.
   
   Lesser total expenses and impressive academic profile will help you to negotiate a lower interest rate. Ask them if lower or no collateral requirements will pull the interest rate down by a bit. In many cases, it most probably will pull down the interest rate.

So these are the 3 tips to get a lower education loan interest rate for you to study at your choice of university. Please understand that these tips don’t substitute the need of a consultation from a financial advisor. Now, you are ready to study hard and follow the profession of your dreams