Why Education Loans Are No Longer Just About Interest Rates

Studying abroad is a dream many students pursue, but funding it through a study abroad education loan can be complex. While interest rates still matter, they’re no longer the only deciding factor. Today’s students and parents need to weigh many more features to choose the right student education loan for study abroad.

In this quick guide, we will look at the key reasons why interest rate is only one piece of the puzzle, and what else you should look at.

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What is Changing – Beyond the Interest Rate

Education loans today do more than just offer money at a low rate. They support your entire study abroad journey, covering costs, offering flexible repayment, and helping with paperwork too.

Below are features and concerns that are now as important (or sometimes more) than just getting a low interest rate.

Case in Point: Credila & Avanse

To truly understand why student education loans for study abroad are no longer just about interest rates, let’s compare two major private lenders.

While the Credila education loan interest rate is a major draw for many students, options like the Avanse finance education loan also offer flexible features that can make a big difference in the overall loan experience.

These examples show that while education loan interest rates are important, terms, flexibility, and coverage can shift what the true cost and value of a loan is.

Why “Lowest Rate” Doesn’t Always Mean “Best Deal”

It’s tempting to choose the loan with the lowest interest rate. But in reality, the cheapest rate doesn’t always mean the best loan, especially for students going abroad.

Here are some pitfalls if you focus only on education loan interest rates:

• A loan with a slightly higher rate but with longer moratorium or grace period could reduce financial stress more effectively
• Loans with lower rate but high processing or hidden fees may cost more over time
• A low interest rate but on an unsecured loan with strict co-borrower requirements might delay approval (or even result in rejection) if your profile is less ideal
• Sometimes, paying a little extra interest but getting better service (speed, clarity, help with visa documentation, etc.) saves you non-money costs (stress, delays)

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What Students Should Ask / Compare

If you are a student or planning to apply via a study abroad consultant, here are questions to ask lenders (or consultants) besides “What’s your interest rate?”:

1. What is the total cost, including processing fee, margin money (if any), foreign exchange charges, and other service fees?
2. When does the repayment begin? After the course, after placement, or immediately? What’s the moratorium or grace period?
3. Do you get 100% of costs covered (tuition + living + travel)? If not, what can you expect?
4. Are there any penalties for prepayment or foreclosures?
5. What are the collateral/co-borrower requirements, and how do these affect interest/spread or approvals?
6. How long will sanctioning & disbursement take (especially important when you must show proof of funds for a visa)?
7. What tax benefits or subsidies are you eligible for?

Beyond Interest Rates: Picking the Right Loan

Interest rates remain a big factor when choosing an education loan, after all, they affect how much you’ll pay over time. But in today’s landscape of education finance, they are just one part of a much larger equation.

Things like flexibility, coverage, speed, documentation support, and repayment terms often matter as much (or more), especially for students going abroad.

At Nomad Credit, we understand all these pieces matter. We help you compare all aspects of education loans, not just rate, so that you can choose the one that truly fits your goals and budget.

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