Merits and Demerits of Education Loans


Gone are the days when students had to quit their higher education on account of significant financial constraints. This is mainly because; the education loans are emerging as a boon to students from all backgrounds to accomplish their vision for higher studies. Educational loans involve significant merits and demerits. Quick financial assistance, easy repayment facility, loans for education in both India and abroad, etc are some of the advantages of education loans. The main demerits of educational loans include long term debt situation and rising interest level.

Merits of Educational Loans

There are immense benefits offered by educational loans which motivate many students to apply for the same. It is a surprising fact that many of the financial intuitions have ended up loan sanctioning as an easy and timeless task for the students. Following are some of the major benefits of educational loans -

  • Educational loans helps in meeting the growing financial needs of the students with regard to a particular higher study course.
  • The loan amount can be repaid easily as it includes flexible terms and conditions. Candidates can pay the loan amount in easy installment schemes after completion of the course.
  • The educational loan amount includes – tuition fees, hostel fee, travel expenses and other benefits depending on the type of loan taken by the applicants.
  • Educational loans cover up for advanced studies both in India and abroad.  The educational loans for studies abroad will necessarily cover up the medical support and safety.

Demerits of Educational Loans

Lack of proper knowledge about the loan procedures and interest schemes often traps students in the network of unsuitable loan schemes. The specific demerits of educational loans is as follows –

  • Educational loans include a specific percentage of interest for the loan amount which may vary upon the type and the specific financial institution from which the loan has been approved. Private educational loans will fetch more annual interest level.
  • Educational loans must be repaid even when the student has not completed the professional course on a regular basis. In such case, it will be a difficult situation for students to pay the EMI when the monthly income is lower than the EMI amount.
  • Educational loans place students in long term debts. The total loan amount along with the interest for the loan period will accumulate and will become a burden for the student.

Nowadays, when higher professional education is increasingly become costlier, educational loans are the main short cut for financial assistance chosen by students. But, it is very crucial to choose the educational loan type wisely to reduce the future financial burden.



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One Response to “Merits and Demerits of Education Loans”

  1. 1
    Shubham singh:

    Can a ll.b. holder be a judge after passing out just ll.b. Final year exam