Encouraging Young Learners to Choose Education Loans

The ultimate goal of every student is to build a successful career. Higher education accelerates the path to success by honing skills, developing specialized knowledge and chiseling a better personality of aspirants to make them career ready. Hence, it has always been seen as the natural next step in a student's life, ensuring a stable future for him. Today's students seek financial independence and therefore choose student loans over financial assistance from parents or family savings to finance their higher education.

"Financial independence is the ability to live on income from personal resources." - Jim Rohn, entrepreneur, author and motivational speaker.

In its most basic sense, financial independence means being self-reliant and paying your bills. In simple terms, it means having enough assets to pay for expenses without depending on anyone else. By the time students reach the age at which they are eligible for a student loan, they are often old enough to understand the finer nuances of financial independence and what it really means for their financial health. However, with this independence comes its own responsibilities, as it is imperative to repay the student loan responsibly.

Nevertheless, the education loan is gaining popularity among young students, as it is a prudent choice in the face of the rising cost of higher education. According to the All India Higher Education Survey, an increase in higher education enrollment coupled with education inflation has led to an increase in the demand for student loans.

Here's what encourages young learners to choose student loans to be financially independent.

Ability-Based Lending: There are various predefined parameters used by lenders to assess the repayment capabilities of individuals. Many new-age lenders prioritize the employability potential of students over the co-borrower's financial history. In order to determine a student's employability potential, financial institutions assess various things such as past academic performance, entrance test scores, pedigree from the university or institute where they studied, as well as other parameters. This helps them decide on the future repayment capacity of the student.

Smart Decisions: Taking on the responsibility of repaying a loan inculcates habits of financial prudence early in life. They tend to control their frivolous expenses in order to maintain cash, in addition to maintaining a corpus for emergencies. Thus, students adopt healthy financial habits from an early age.

Build credit scores: Students are at a crucial time in their lives and will need other financial products. After the student's college career ends, the student may need additional funds in the form of a car loan, home loan, or credit card. By repaying the student loan responsibly, students can establish a healthy credit score, increasing their chances of obtaining future loans on better terms.

Access to quality education: Many students are sometimes forced to abandon their dreams of furthering their education - whether in India or abroad - due to a lack of funds. Rising inflation and the cost of living add to monetary pressures. An education loan covers the overall cost of education, including airfare, tuition, accommodation, study materials, living expenses, cost of devices learning and other education-related expenses, thus ensuring that they are not forced to compromise on their aspirations to benefit from a higher quality education.

Preserve family savings: With easy access to student loans, students and their families don't need to dip into family savings, sell family gold, liquidate assets, or close businesses. DF. Instead, these savings can be extremely useful in the event of a health or other emergency.

Career Boost: Access to top quality education at a leading institute opens up a wealth of opportunities for students. They have the opportunity to pursue the profession of their choice and have access to opportunities to work for some of the best brands in the world or even to become successful entrepreneurs.

The easy availability of education finance solutions enables easy access to quality education. New age lenders have geared up to bridge the gap between aspirants and their academic aspirations to ensure that deserving students get the student loans to fund their higher education. With the help of technology and relevant data, they are in the best position to create hyper-personalized solutions tailored to each candidate. The student loan will earn students the coveted "self-made" badge.

(The author is the Chief Business Officer - Education Loans, Avanse Financial Services)