Pursuing higher education in India or in a foreign country can be quite expensive these days. However, money cannot be allowed to be a hurdle to gaining higher education that can help students kick-start their careers right. You can of course always try to apply for an education loan online, but education loans come with their own set of challenges.
Challenges in taking a Student Education Loan
With the rising costs of higher education, student loans have become quite common today. Several specialized education loans have also been introduced by the RBI and are offered by various financial institutions. Unfortunately, most student loans come with a number of limitations, because of which they remain out of reach for several students.
- Education loans have stringent eligibility criteria.
- To avail of a student loan, the applicant must be able to prove strong financial backing, good credit score, history, etc., or have a guarantor to meet the eligibility criteria for repayment capability.
- Many types of education loans require the applicant to provide their house or land as collateral for availing the loan.
- Students must have already been accepted by recognized colleges and universities to be able to apply for an education loan.
- Admission letters from top institutions, like IITs and IIMs, are given preference when providing education loans.
- For studying abroad, interest rate subsidies are only offered to students who have been accepted by Ivy League schools or educational institutes of equivalent stature.
- For studying overseas, even if you get an education loan, it mostly will only cover the tuition fee. Other expenses like travel, accommodation, food, medical, and other costs, which can also be quite high, will have to be borne by the student and their family.
- Being unsecured loans, student education loans generally have high rates of interest.
All these and more add to the difficulties of availing a student loan.
Taking a Gold Loan for Education
Taking a loan against gold for education is an excellent alternative that you can consider. A part of the country’s traditions and culture, gold has always been a hot commodity in India, and recently, more and more people even started using gold as a means to get funds in an emergency, in the form of gold loans. Thanks to the offerings of NBFCs like Muthoot Finance, gold loans have gained a lot of popularity in recent years, coming up as one of the best ways to fund varied needs. If you have enough gold at hand, funding higher education with a loan against the gold is a more flexible and easier financial solution that you can opt for.
The Benefits of Taking a Gold Loan for Education over a Student Loan
Just because availing a student loan is difficult, it does not have to mean the end of the road for higher education. There are always other options, like taking a gold loan from Muthoot Finance. Education, whether pursued within the country or abroad, is crucial for building one’s future and should be accessible to everyone.
The many benefits offered by gold loans that make them a viable option for funding higher education include:
- Easy Eligibility
Any Indian citizen over the age of 21 who is the rightful owner of gold can apply for and avail a gold loan by pledging said gold with a financial institution like Muthoot Finance. There is no need for a student to prove their merit or to avail a gold loan.
Gold loans do not have stringent requirements and criteria like being accepted by an educational institution of a certain standing.
- No Restrictions on End Use
There are no restrictions regarding how the money disbursed through a gold loan is used. The amount can be used for anything, like travel and accommodation expenses, living costs, tuition fees, etc.
- No Minimum Credit Score
Gold loans are secured loans, so there is no requirement for a credit history check or a minimum CIBIL score that you must meet in order to be able to avail a gold loan. This proves to be extremely useful for students whose families are not that financially strong or who have irregular incomes.
- High Loan Amount
The Loan-to-Value ratio for gold loans is generally high and borrowers can apply for an amount that is up to 75% of the value of the gold they are pledging. For an even higher maximum loan amount, you can consider pledging a larger amount of gold. The high LTV of gold loans allows people to get the most out of their gold and makes it easy for them to avail of sizeable amounts as a loan.
- Easy Documentation & Application Processes
There are no lengthy documentation processes involving proofs of income, ITR, etc. for availing a gold loan. All you need to do is fill up a simple application form and provide basic KYC documents, along with the gold to be pledged. There is also minimal verification required, which mainly involves the valuation of the pledged gold, so the application process and disbursal of the gold loan are quite quickly done.
- Lower Rates of Interest
As compared to most loans, especially unsecured ones like education loans, gold loans have lower rates of interest. This is mostly because it is a secured loan where the loan amount is disbursed against pledged gold and calculated based on the value of the pledged gold.
- Easy Repayment Options
Gold loans come with a number of repayment options that you can choose from based on your preference. You can opt to repay the loan in easy monthly interest payments or as a lump sum amount at the end of the loan tenure.
- Easy Availability
Now, with the Loan @ Home facility, it has become easier than ever to avail a gold loan for education from Muthoot Finance. You can go through the various gold loan schemes available through Loan @ Home and when you find the one you like, just put in a request for the loan online. A representative from Muthoot Finance will visit you for the valuation of the gold and for completing the application process and within one home visit, the loan will be disbursed.
Your gold assets are a great avenue for helping meet crucial expenses. So, don’t put aside your aspirations for higher education just because of the financial aspect. Opt for Muthoot Finance’s Gold Loan at Home service and fund your education dreams with ease.