One of the few aspects of the Indian development project that is supposed to have seen some recent success is education. As India continues to witness a surge in the number of students pursuing higher education, the importance of understanding and managing finances becomes paramount. The transition from college to a professional career is a crucial phase, often accompanied by financial challenges. This article explores the significance of student loans and financial literacy for Indian students.

The Rising Cost of Education

In recent years, the cost of higher education in India has seen a notable increase. According to the All India Survey on Higher Education (AISHE) data for the academic year 2020-21, the enrollment in higher education institutions crossed the 3.85 crore mark. With this surge in enrollment, there is a parallel increase in education and other related expenses. According to EduFund, education costs in India have climbed by around 10-12% between 2012-20. Not only the tuition fee, but transportation fees and examination fees are also hiked periodically which affects the overall budget.

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Quality education is important but beyond the reach of all as it is expensive. Banks offer educational loans to deserving students for higher education. Let’s explore the benefits of an educational loan and points to consider when applying for one.

What is an educational loan?
Education is a stepping stone to your success and it is important that you get the right educational qualifications at the right time. An educational loan is financial support given to deserving persons so that they can complete quality education as per their choice.

Why should I take an educational loan?
Quality education is important in today’s world but expensive. You need to plan in advance to take care of the finances required. You can focus on getting admission, studying and managing your course well, if the finances are taken care of. There are various expenditure items like caution deposits, tuition fees, specialized courses’ fees, etc. An educational loan will ensure that you do not worry about finances and concentrate on your education.

What are the benefits of an educational loan?
Financial Discipline: As a student, you get the loan for your education which you may not be able to afford. Once you start earning, you will have to repay the loan which will instil a sense of financial discipline in you. You will be cautious before spending unnecessarily.

Parents need to save money for old age and emergencies: Parents want to give the best of everything to their children. Most parents have their children’s education as one of their financial goals. But they also need to save money for life after retirement and emergencies. You do not get a loan for retirement. So it is better to take the leverage of educational loans which are easy to avail of and have customer-friendly repayment options.

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