Why Education Loan is a Better Choice to Pursue Higher Studies?
Education Loans | Loansby Priyadarshini 21 September 2020
Education Loans are quite common these days and if you are planning to join college soon, you might consider reading below. Most degree courses are rocketing sky-high prices. Usually the prices begin at S$40,000, which instantly makes you shell out a huge chunk from your savings. It is a good idea to opt for an education loan to avoid falling in unanticipated pitfalls. You too can choose education loan if you want to pursue higher studies.
Here’s why you should opt for an education loan even if you have the money
Education Loan – Costs?
Most education loans in Singapore have an interest rate between 4% to 6% per annum. This is relatively lesser than the interest rate of personal loans. Education loans usually have a five-year tenure with a processing fee of 3% of the total loan amount. In case you are in a dilemma of whether or not to apply for an education loan, you may use the following circumstances to be a better judge. For instance, if you wish to study abroad, or you are up for some opportunity costs, you do not have comprehensive insurances, or if you have any dependents on you to look after.
If you finally decide to take up an education loan keep in mind the kind of repayment method, you choose. This is because the way you make repayment will affect the interest you will be charged.
Wish to Study Abroad?
If you are one of those who have always dreamed of studying abroad then it could be in your best interest to hold on to your savings reserve and opt for an education loan to pay for your degree. A lot of unexpected costs may crop while you are living abroad, instances like paying for rent if you live off-campus, foreign policies for international students, currency exchange rates, among many other things.
An education loan will require you to pay the interest rates but it is a better & safer option than to run out on your savings. Emergencies cannot be predicted and you can further be distracted from your studies if money matters are not sorted.
Not Enough Insurance?
Many people who do not have ample health insurance coverage, it may not be wise to spend all your money at once. If you have existing ailments do not forget to check if your insurance policy covers you. While you are studying abroad, and you fall ill owing to medical conditions which you are not covered for can be a bad situation to deal with.
You’ll lose all the money and your studies will get disrupted as well. So, don’t say goodbye to existing savings and keep some funds handy to deal with emergencies. This is one more instance, where choosing an education loan would be helpful.
If you are the one with a business mind and want to make money while you are studying, then you can take up an education loan and invest your existing savings. Throughout your degree, you can work your way repaying the loan from the returns you receive from your investment. Doesn’t this sound like you can eat your cake and have it too? Well, this can also help you to start your own business once you finish your degree. Think of applying for a loan and make the most of your time at college.
Dependents on you?
Not everyone is born with a silver spoon and you may have dependents to look after. They can be your elderly parents, spouse, etc. so, it is recommended not to empty your bank account at one go and opt for an education loan. In this way, you will be able to complete your education and also provide for your family. Keeping funds handy will take care of your family’s needs and you can focus on your education.
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