Top 5 Mistakes International Students Make While Applying for Student Loans

An education loan is one of the best ways to finance your overseas education dream. It helps you to avoid financial burdens. Naturally, for some students, it's their first time borrowing a study loan and they may have less information. You must understand some common mistakes related to education loans so you can avoid them. 

So, you have decided to borrow a study loan and are preparing for this. It's great to know what are some common mistakes related to borrowing education loans that you should avoid. Indeed, that's a great proactive approach. Borrowing a student loan for studying abroad is a significant financial decision. Understanding common pitfalls in the early stage of the application process can save you from future headaches. 

High interest rates, and no financial planning to repay the study loans are most common issues. Other than this, let's know about some other mistakes! 

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5 Student Loan Mistakes to Avoid

Here are some common mistakes to avoid.

1. Missing EMI Payments

This one goes without saying, you have to make sure your loan installments are paid on time. It is not a good idea to skip or miss the loan repayment installments. The results of delayed or non-payment can result in default, which will impact your future ability to take loans for your car or a home. It is important you figure out the number of installments for the complete payment beforehand and choose the plan which suits you the most.

2. Not Understanding of Foreign Exchange Rates

As an international student, you have to make the loan payments in Indian currency but the tuition and living costs are in foreign currency. So you need to know exactly how the new currency rate works. Indian students going to countries with stronger currency have to make sure they are not outspending their living budget. Or while calculating your cost of education, make sure you include other costs apart from the basic tuition fee like insurance fee, lab fee, books and resources etc.

Note: Students, who wish to study abroad, may contact India’s leading education loan providers through Shiksha Study Abroad.

Related links:

• Financial Documents Required for Study Abroad Applications
• Education Loan Vs. Self Funding to Study Abroad
• Public v/s Private Education Loan Providers

• Top Private Student Loans without Cosigner

3. Not Exploring Financial Aid Options 

American colleges know that the easiest way to attract foreign students to their institution is by offering scholarships. Look into the options available to you and see how you can apply to various scholarships offered by the college and independent organizations. This way your total loan amount will reduce drastically as you have to pay only part of the tuition fee to the college. Which means repayment will only be easier for you later on.

4. Having No Planning for EMI

You need to ask your bank representative in advance about the total payable monthly amount. You can negotiate the amount and adjust it according to your capacity. Some banks may not offer the option to change the amount afterwards so it is better to keep a note of it earlier on.

5. Not Enabling Automatic Payments

Almost all banks offer the option of making an automatic payment every month where monthly payments will automatically be made from your debit account. This method is the best hassle-free bet as you don't have to remember the payment deadlines. It is easier to miss a payment deadline if rely only on your memory.

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