Higher education is no longer just about choosing a course — it is about managing the cost that comes with it. Tuition fees, hostel charges, books, travel, laptops, coaching, and living expenses together can feel overwhelming for many families.
That is when a higher education loan Delhi becomes a practical support system. But taking a loan is a long-term financial commitment. Before signing any papers, it is important to understand what you are agreeing to. Many students rush into loans without checking key details and later struggle during repayment.
Factors To Keep in Mind While Getting an Education Loan
Let’s walk through the major factors you should consider — calmly and clearly — before applying for an education loan.
1. Course and Institution Eligibility
The first question lenders look at is not just who you are, but what and where you are planning to study. Check:
- whether the course is recognized
- whether the institution is approved by regulatory bodies
- whether it has good academic and placement records
Loans are usually offered more easily for:
- recognized universities
- professional courses
- reputed colleges with better job prospects
Courses with unclear recognition or low placement rates may face difficulty in loan approval or require stronger security.
2. Tuition Fee vs Complete Cost of Study
Students often look only at tuition fees, but the actual expense of higher education is more than that.
Your education loan for abroad in Delhi, like that facilitated by Midas Finserve, may also need to cover:
- hostel and mess fees
- books and study material
- laptop and equipment
- coaching or training expenses
- travel and exam fees
- insurance, if applicable
Before deciding the loan amount, make a complete budget of the entire study period, not just the first year.
3. Loan Amount and Margin Money
Banks and NBFCs do not always finance 100% of the cost. Some lenders ask you to pay a part of the expense yourself, known as margin money.
For example:
- lender may finance 90%
- remaining 10% must be paid by student/parents
Understand clearly:
- how much of the total cost will be covered
- how much you need to arrange yourself
This avoids sudden financial surprises later.
4. Interest Rate and Type of Interest
Interest rate is one of the most important factors because it directly affects your total repayment amount.
Check:
- interest rate percentage
- whether the rate is fixed or floating
- whether concessions exist for girls, specific courses, or premier institutes
Even a small difference in interest rate can make a big impact when the loan duration is long.
5. Moratorium Period (Repayment Holiday)
Most education loans provide a moratorium period, which is the time during which you don’t have to repay the loan immediately.
It usually covers:
- course duration
- a few months after course completion
But remember:
- interest may still keep adding during this period
- some banks ask for partial interest payment during study years
Understand clearly what happens during this “holiday period” before committing.
6. Repayment Tenure
Repayment tenure determines:
- your EMI amount
- total interest paid over time
- financial pressure after studies
Longer tenure:
- smaller EMI
- higher total interest
Shorter tenure:
- higher EMI
- lower total interest
Choose a repayment period that matches your expected earning capacity after completing the course.
7. Requirement of Co-applicant or Guarantor
Most lenders require:
- parent / guardian / spouse as co-applicant
For larger loans, lenders may also ask for:
- collateral security such as property, FD, or insurance policies
Before applying, discuss clearly with your family about:
- who will be the co-borrower
- what collateral, if any, can be offered
Transparency avoids stress later.
8. Expected Future Earning Potential
Do not look at the education loan only as “available money”.
Ask:
- what is the expected salary after this course?
- how strong are job prospects in this field?
- how long may it realistically take to get a job?
A course with very low earning potential but very high fees can create repayment pressure later.
9. Subsidies, Scholarships, and Government Support
Before applying for a large loan, always explore:
- central or state government interest subsidies
- scholarships
- fee waivers
- grants for specific categories
Sometimes even a small scholarship can reduce the required loan amount and interest burden.
10. Hidden Charges and Terms in the Fine Print
Many people only check the interest rate and ignore other charges.
Look carefully at:
- processing fees
- prepayment charges
- penalty for missed EMIs
- insurance premium bundled with the loan
Reading the fine print carefully is essential — don’t rush just because approval seems easy.
11. Impact on Your Credit Score
An education loan, if repaid on time:
- builds a strong credit history
- helps in future loans like home or car loan
But if EMI payments are delayed or defaulted:
- credit score drops
- future borrowing becomes difficult
So plan realistically — only borrow what you can comfortably repay.
Final Thoughts
An education loan is not just money — it is a responsibility attached to your future income. Before taking one, understand total cost of study, borrowing amount, interest and repayment terms, and earning opportunity after completion.
A well-planned education loan can open doors to opportunities. A rushed decision, however, can create unnecessary financial stress. Take time, compare options, ask questions, and read every document carefully. The goal is not just to fund education today, but also to protect financial stability tomorrow.
FAQs
1: Do banks cover the full cost of higher education through loans?
Not always. Many lenders finance only a percentage of the total cost. The remaining amount has to be arranged by the student or parents, called margin money. Always check how much of the total expense will actually be covered before applying.
2: When do I have to start repaying an education loan?
Repayment usually starts after the moratorium period, which includes the course duration plus a few months after completion. However, interest may continue to accumulate during this time, so it is important to understand whether you need to pay simple or partial interest during your study period.
3: Is collateral required for every education loan?
No. Smaller loan amounts may not need collateral. For higher loan amounts, lenders may ask for security such as property, fixed deposits, or a guarantor. Requirements vary by lender, so it’s important to check before applying.
4: What should I check apart from the interest rate?
Apart from interest rate, review processing fees, repayment tenure, prepayment charges, penalty for missed EMIs, and insurance bundled with the loan. These charges can significantly affect the total cost of the loan.
