Student loan in 2024 : Is it worth taking a student loan ?

“Education is the most powerful weapon which you can use to change the world” 

– By Nelson Mandela

The above golden lines as stated by Nelson Mandela frames Education as a weapon to conquer and change the world but the tragedy of the world is that the weapon i.e. education is turning costly nowadays and going beyond the reach of the middle class & poor of the society. The solution to this problem is education loan or student loan, the following article covers complete information about education/ student loan.

What are student loans?

It is reported that the inflation in education sector is at a scorching 6% and with this the cost of pursuing education is going up and its affordability is going down over day. The solution to this problem is education loan. Student loans are financial aid that are provided to students to cover the costs of their tuition fees, books, living expenses. Student loans are specialized as they have lower interest rates and flexible repayment styles to make it easier and beneficial for students to pay them. Government bodies, banks and other financial institutions provide these loans to students.

Is taking a student loan worth it ?

The above line appears in ones mind when considering about student loan, "Should i take a student loan ?" , "Will the student loan be a burden on me ?", " Wil, I be able to pay back the loan ?". The answer to the stated questions are subjective and varies from person to person. To answer this question one must have a clear knowledge about student loans and for that a all round information regarding student loan is important. The advantages, disadvantages, current scenario and other relevant information regarding student loan are provided in this section 

What is the current scenario of education loan in India ?

With number of students for pursuing higher education and with the hefty fees for pursuing higher education, the number of candidates applying for student loan are growing day by day and as demand for loan seekers are increasing the number of loan givers are increasing as well. The gap between the number of loan seekers and loan lenders are narrowing down and with competition increasing the lenders are coming up with attractive schemes to attract students.

Why should one consider taking a student loan ?

Student loan are an important aid that is provided to students as a form of financial aid to aid them during their academic year , the benefits offered with student loan are :

1. Financial aid to student during their academic year : Student loan serve as a aid to financial aid to students during their academic years, it helps students cover their expenses related to tuition fees, accommodation and other needs without putting the load of hefty financials on their parents, student loan helps a student become independent during their academic years.
2. Government aids and benefits : Government schemes are built to provide students with aid during their student tenure, the schemes are specially designed to provide student from weak financial background a scope to study and pursue their dream of studying in a higher education institute without thinking much about their financials during their growing period.

What are the advantages of taking a student loan ?

Student loans are specially curated to be student friendly and comes with specialised payback models to help and aid students with the payback during their working life, some other benefits that a student gets after taking a student loan are listed below :

Building credit history

Student loans can help one make a good credit history for ones career, timely repayments can help one to build a better credit score and have a good scope in their financial pursuits during their career.

Government schemes and benefits

Students can avail various government schemes and benefits designed for welfare of students, with the presence of student loan students can also come under various government and private policies developed for the welfare of students.

Funding higher education

India is a country with 1.4 billion people and a major percentage of the stated number are youth population and a major part of them have a dream to pursue higher education but the hefty fees are a backdrop for them student loan provides them with a support to pay out these loans.

What are the disadvantages of taking a student loan ?

Every object have pros and cons associated with it, similar is the truth with student loans, there are certain disadvantages of taking a student loan associated with it, the disadvantages are outlined below :

Interest Rates and Repayment Burden :

With interest rates on student loan being generally lower than that of personal loans, the interests accumulate over a period of time and become a hefty amount to payback after one joins a job

Job Market Challenges and Unemployment : 

Economic downturns or difficulties in finding suitable employment can make loan repayment challenging, thus while considering to take or not to take a student loan one must consider factors like interest amount, scope of earning after pursuing a particular course.

Default Risk and Its Consequences :

Failure to repay the loan can have severe consequences, including damage to credit score, legal action, and difficulty obtaining future loans, to avoid such circumstances students can take loans from lender who lend them without collaterals so that even if any mishappening occurs the burden doesn't fall on their parents.

Frequently asked questions about Student loans :

What are the basic eligibility requirements for student loans ?

Students must be Indian citizens to qualify for student loans in India. Additionally, they should have a strong academic record and a clear career plan.

What is the age limit to apply for student loan ?

Most lenders require students to be between 18 and 35 years old. This range ensures the borrower is mature enough to manage the loan and its repayment.

What are the academic requirements to apply for a student loan ?

Applicants must have completed their higher secondary education (12th grade). They should also have a consistent academic record with no gaps in their education.

Is it important to be admitted to a good institute to avail student loan ?

Students must have secured admission to recognized institutions in India or abroad. This includes universities, colleges, and professional courses approved by the relevant authorities.

What are Co-applicant Requirements to apply for student loan ?

A co-applicant, usually a parent or guardian, is mandatory for most student loans. The co-applicant shares responsibility for loan repayment, adding an additional layer of security for the lender.

Are parents/guardians required to apply as a co-applicant to avail a student loan ?

Parents or guardians often act as co-applicants, providing financial backing. Their involvement is crucial, especially for securing higher loan amounts or better terms.