Loans For Online Courses Like Byju’s, UpGrad Is Expensive Than UGC-Approved Courses; Find Out Why?
The COVID-19 resultant lockdowns have entirely changed the face of education all over the world. Classes are happening over smartphones, laptops. Likewise, Many edutech startups like Byju’s, upGrad among others are now offering a variety of online courses and coaching.
Great Learning, one of the edutech startups has partnered with ICICI Bank and Bank of Baroda to allow participants to fund their study programs.
Similarly, BYJU’s courses with ICICI Bank credit cards also offer no-cost EMIs options.
However, not all courses are eligible for education loans as these loans are usually granted to courses offered by universities or colleges that are in turn approved by the University Grant Commission (UGC), All India Council for Technical Education (AICTE), and state/central governments.
Let us find out more about education loans for online courses…
No Benefits, Higher Interest Rates For Education Loans For Online Courses?
Some online edutech start-ups have secured deals with a few financial institutions to facilitate loans for their students.
Currently, Byju’s has partnered with Bajaj Finserv to offer loans to prepare for NEET and JEE courses that begin at Rs 75,000. On the e-learning apps such as Toppr, Extramarks, and Vedantu similar loans are offered. Loans varying between Rs 50,000 to Rs 1.5 lakh with tenures of 9-24 months are available.
Gaurav Gupta, Founder, Myloancare.in said, “Courses conducted by online start-ups are supportive resources — more on the lines of coaching classes. These will not be eligible for education loans from banks. So, the financing is offered through tie-ups with lenders or ‘no-cost’ credit card EMIs. These loans tend to be expensive as they are akin to personal loans to parents.”
Lower interest rates, a moratorium on repayment for one-year post-course completion or six months after you land a job and, of course, tax benefits under section 80E on interest paid are among any benefits you get on education loans.
However, according to Adhil Shetty, CEO of BankBazaar.com these loans are more along the lines of personal loans having higher interest rates. Also, personal loans do not come with any of the above-mentioned benefits.
Some of these online apps also have the option of using credit cards with no-cost EMI schemes for some online courses. In other words, you can convert the course fees into a no-cost EMI option.
Why Should You Not Take Loans From P2P Platforms!
- High-interest rates as the lenders usually give loans to borrowers with weak credit scores. The rate of interest is usually decided by the lender.
- No tax benefits.
- Strict pre-closure charges. (you may suffer if you want to foreclose your loan.)