A student loan is a financial loan given to students who want to pursue higher education through graduation, post-graduation, and other similar degrees. The characteristic of the loan offered to students differs in every country, and many countries charge high-interest rate on loans while other provides lower interest rate. Generally, they are expected to repay the loan only when they complete their higher study.
Many students also use this loan to pursue studies in other foreign countries where the living expense and tuition fees might be higher. Proper evaluation of a student’s qualifications and repaying capabilities are made to avoid bankruptcy and confirm the regulating laws.
Vidya Lakshmi scheme, a type of student loan mechanism, was started by the Indian Government in 2015. Five major banks, including the State Bank of India (SBI), Bank of India, and IDBI, have collaborated in this regard.
Students loan are funded in two ways- governmental entities and individual entities. While governmental funded loans have reasonable interest amounts, the moneylenders charge exorbitantly. Only people with limited access to resources and knowledge go to the latter. However, people prefer lending from organised banks with regulatory authority above it, rather than going to unregularized sources for student loans