Saving for the little one’s higher education, further studies more often than not features among the most important financial goals for many. It is also no surprise that this cost is heavy and can eat a large portion of your corpus. Spiralling costs of higher education is not the only reason that parents may fail to accumulate adequate money for their children’s education. A shortfall can occur because of a change in the nature of the goal too.
Parents can start to save for their child’s education immediately after the birth of the child. This way, they would have 18 years to save for graduation and 21 for higher studies. However, despite starting early, one can still fall short of the required corpus. This is where education loans come in. They are gathering favour among many.
Therefore, before you decide to take an education loan to help finance your child’s higher education, take a look at some of the do’s and dont’s:
- Choose course with care
An additional degree may not mean better job prospects. Selecting the right course is critical. Instead of any course, the student should concentrate on courses with good job potential. Since job opportunities are more for those studying science, technology, engineering and maths (STEM) in foreign countries, there is a clear trend towards these streams when applying for foreign education loans.
- Keep future salary expectations real
Taking the maximum loan available, irrespective of the repayment capacity, is the next mistake. Students should only take loans that can be repaid by their future salary. Else, the co-applicant, which is the parent in most cases, will be forced to pay the remaining. “While computing expected salary, keep expectations reasonable,” says Prashant Bhonsle, CEO-Students Loans, InCred.
- Opt for course just because loan is available
Joining a course just because the institute has tied up with some financial instituti