Keep these 3 points in mind while using an educational loan calculator

Education loans have helped millions of students achieve their higher education aspirations. They have been doing so for quite a few decades now. In these years, many lenders have made the passage to get education loans easier for students. They have brought a lot of free services forth to help students in every way possible. One of those services is the education loan calculator. A student who intends to borrow an abroad study loan or a loan to study in India can use these calculators to plan their higher education finances. But before you use these calculators, keep these 3 points in mind.

1. Educational loan calculator gives speculative result

Whenever a student takes an education loan, various charges are levied on its principal amount. For instance, every education loan is charged with service charges, statement of accounts, pre-and post-processing charges, and so on. In the end, the cumulative education loan amount taken is higher than the estimated one. On a similar note, a student may be able to only estimate the number of years in which he/she would repay the loan but not be sure because of uncertainty about future earnings.

Thus, a student can only estimate the details of the education loan. So, if he/she uses educational loan calculators to plan higher education finances, he/she will put estimated values in the different fields of the calculator, which as a result, will get a speculative result.

2. Different calculators use a different formula to calculate the result

Lenders charge interest on the education loan amount differently when compared to each other. They charge either simple or compound interest on education loans during the course period. In other words, the way lenders charge interest on education loans differs from one to another. These differences result in different mathematical formulae being used in calculators.

Thus, a student often gets different results for the same values they put in the calculators of different lenders. A student should keep this point in mind when calculating an educational loan on this online tool.

3. Can be used to test different permutations and combinations of appropriate values

A student will never have an exact idea about the finances for higher education until he/she borrows funds formally. He/she will have to estimate the education loan stats by following the trial-and-error method. In short, it means, he/she will have to use different permutations and combinations of values in fields like annual interest rate, repayment tenure, monthly obligations, and so on of the calculators to find the one that is best suited.

As lenders provide these calculators for free, a student can use them as many times as needed to arrive at the most suitable education loan values.

So, these are the 3 points to be kept in mind while using an educational loan calculator. We advise you to avoid using one lender’s education loan quote in another lender’s calculator to save yourself from making wrong decisions. Have a nice day!