An education loan may be the keystone in funding the pursued higher education. As much as the interest rate of an education loan can significantly affect your overall financial burden.
Here are a few practical tips that can help you get a low interest rate on your education loan:
How can you get a lower interest rate on an Education Loan?
1. Compare Loan Offers from Multiple Lenders
Before you finalize any loan, compare education loan offers from different lenders. Banks, Non-Banking Financial Companies (NBFCs) and financial institutions may offer different interest rates and terms on education loans. Comparison will help you choose the lender that offers the best terms that suit your financial profile.
Tip: Use online loan comparison websites or speak to a Ruloans loan agent to know more about what you can get.
2. Maintain a Strong CIBIL Score
A CIBIL score can make or break your loan application as a significant weightage of loan approval is given to your credit score. A low CIBIL score shows that you need to don’t pay off your credit on time, which is one of the biggest reasons why your personal loan application is rejected.
Tip: Review your credit report and resolve any discrepancies. Ruloans provide a free CIBIL score check online to help you keep a track of it without it impacting your score.
3. Choose a Secured Education Loan for Lower Interest
If you have assets such as property, fixed deposits, or gold; you can apply for a secured education loan. Secured loans usually have lower interest rates as these are considered low risk by the lender. This option is good if you want to minimize the cost of getting an education loan.
Tip: Also using Ruloans you can check secured loan offers from top banks and NBFCs.
4. Negotiate with the Lender
Sometimes, all you need to do is ask. If you have an excellent academic record, a strong co-applicant or collateral, you can negotiate for a lower education loan interest rate with your lender. Banks are open to discussion if they consider you a low-risk borrower.
Tip: Explain in advance to the financier what you need the loan for and how you can manage it, whether due to a good CIBIL score or collateral.
5. Choose a Shorter Loan Tenure
While longer tenures may give you the advantage of lower monthly EMIs, shorter loan tenures come with reduced interest outgo. Lenders usually offer more competitive interest rates on loans with a shorter duration since the risk of default is lower.
Tip: While availing a loan, make sure that your loan tenure does not increase to the extent that it increases your ability to pay-off but also charges higher interest on the principal amount.
6. Look for Government Schemes
In India, some government schemes provide education loans at a subsidy interest rate. For instance, Central Sector Interest Subsidy (CSIS) Scheme provides full interest subsidy for the economically weaker sections during the moratorium period.
Tip: Contact your lender to see if you’re eligible for government-provided education loan subsidy.
7. Opt for Public Sector Banks
Public sector banks in India usually give students better education loan rates than private sector banks and NBFCs offer. We are able to deliver through our relationships with central PSU banks some of the best interest rates for student loans.
Ruloans’ partnerships with top public sector banks give you access to low interest rates at your doorstep.
8. Apply with a Strong Co-Applicant
Suppose you have a co-applicant (usually parent/guardian) who has a good credit score + a stable income. In that case, the interest rate can come down further on your education loan because it is seen as an extra security provided to the lender and thus they have less risk.
Tip: Provided your co-applicant possesses a solid financial profile, it could better you chances to avail of the lower interest rate.
Apply for Education Loan Through Ruloans
At Ruloans, India’s biggest loan distributor, we make the entire process hassle-free for you. Applying with us for an education loan enables you to avail it from any of our 265+ banks and NBFCs. This means you get the cheapest offer/rate in the market as we follow a partnership model to give you an unbiased comparison between banks and provide door-step service.
Tip: Use the Ruconnect App by Ruloans to track your loan applications on real time and claim payouts without any hassle.
Final Words!
Securing a low-interest rate on your education loan is crucial to ensuring you graduate with manageable debt. By following the tips mentioned above and leveraging the resources at Ruloans, you can find the best possible deal on your education loan. If you’re considering becoming a DSA loan agent, Ruloans offers an easy education loan DSA registration process. As an education loan agent near me, you can assist students and families in securing education loans at favorable terms. Additionally, the benefits of education loan agents include attractive commission structures and flexible work schedules.
