Give wings to your Child’s Dreams and Aspirations With the best Education Loan in India. When it comes to parenthood, there’s nothing as gratifying as providing your children with the best education. Sadly, the cost of education has sky-rocketed within the last few years. Higher education, both in India and overseas, at premium institutions, now come with a hefty price tag, irrespective of the merits secured by the student.
This is where “Education Loans” come into the picture.
Why opt for Education Loan in India?
Unlike other loans, where the repayment starts as soon as the loan amount is disbursed, Education Loan come with a moratorium (or waiting) period, only after which EMI repayments start. This helps students complete their studies, land a job before they can begin repaying their education loan.
Easy to Avail
Education loans are now provided by all banks and several NBFCs. Additionally, unlike other loans that go through a lot of scrutinies, before being sanctioned, education loans are easy to avail.
For an education loan, lesser than 4lakhs, there is no need to submit any collateral or security. This is highly favourable for students and parents as the tuition fees of most colleges are within this range.
No need to dip into Family’s Savings
Instead of selling assets or dipping into the retirement savings, parents can avail an education loan for their children. Since interest rates are low, and EMI payments begin only after the completion of the course, it works in favour of both the children and parents.
The repayment of interest for an education loan is eligible for tax deduction under Section 80E. This tax rebate is available for all students, irrespective of whether they pursue their higher education in India or overseas.
Features of Education Loans
There is no restriction on the type of academic courses. Any student who is enrolled or about to join graduation, post-graduation, certificate or vocational course in India or overseas can apply for education loans.
The loan amount depends on various factors like the student’s academic record, occupation and income levels of the parents; course applied, educational institution and much more.
Female students are eligible for lower interest rates and other subsidies when applying for higher education loans.
Students from backward sections of the society can apply for subsidy schemes like the CSIS (Central Scheme to provide Interest Subsidy) to avail education loans at lowered interest rates.
Loans below 4lakhs do not require a guarantor or collateral.
The tenure of the loan is usually from five to seven years but can be extended by the lender, if required.
Apart from the features listed here, different banks offer exclusive benefits and other features. Make sure to compare them, before zeroing in on a lender who meets your specific requirements.
Eligibility Criteria for Education Loans
The applicant must be an Indian citizen. If an NRI, he/she must possess a valid Indian passport.
Must fall within the age bracket, specified by the lender.
Must have an offer of admission from a recognized educational institution or college, in India or overseas.
The student applicant applies for the loan along with a co-applicant, who is an adult and has a regular source of income.
While these are the default criteria, different lenders may have a different set of eligibility criteria. An excellent academic record by the student applicant and a good credit history by the co-applicant (the parent or guardian) help in quickening the approval process of your student education loan.
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Compare Education Loan in India: Student Loan Interest Rate from Top Indian Banks, Check Eligibility for Education loan, Documents Required, Get Best Education Loan Quotes & Apply Online Now.
Education in India, at least the commonly perceived ‘quality education’ as imparted by acclaimed and influential educational institutions, is decidedly costly and not easily available to everyone- especially those who deserve it based on merit alone. Thus, education loans are vitally important. Almost all banks in India offer education loans, and the demand for it has remained stable with the Indian student community.
Education Loan Eligibility:
Listed herein are the basic requirements that qualify your application for an education loan,
The applicant must be a resident Indian.
He/she must have secured admission into a recognized course of study, in India or abroad, through an entrance test or other such qualification procedure.
If the applicant is a Non-Resident Indian (NRI), he/she must hold a valid Indian Passport.
Courses applicable in India- Graduation, Post-Graduation, Diploma programs, Technical courses, Management courses and other professional courses. All from recognized universities.
Courses applicable Abroad- Graduation, Post-Graduation, Certificate Degree courses from CIMA- London, CPA-USA and other such well known educational entities.
The applicant must provide a collateral/security that is enforceable in India.
Note- This above listing is a basic eligibility requirement. Banks, in their own capacity, may request for more documentation and proof.
Documentation Required When Applying for an Education Loan:
When applying for the loan, the lender in question will ask for a number of documents that prove your eligibility in terms of your student status, family income, ID and address proof, course applied for, and other such factors. Listed herein is the basic list of required documents-
Completed loan application form.
Documents for proof of age (self-attested).
ID and Address proof.
Passport sized photographs of the applicant, guarantor, etc.
Copies of highest educational qualification (degree/post-graduation, etc.)
Proof of income (IT returns of parents/guarantor).
Six months bank statement for account held by applicant/parent/guarantor.
Details of collateral security marked by a Government approved valuer (if applicable).
Passport/Visa copy, airfare cost as established in documents (for studies abroad).
As noted, banks in their individual capacity can request for additional documents. Submission of the same, in their required format, is crucial for the smooth sailing of your application form.
What are the courses in India for which education loans are available?
Any of the following courses, as offered by recognized universities, is eligible for an education loan in India-
Professional courses including Engineering and Medicine
Management courses (both full time and part time)
ICWA, CA, CFA etc.
Courses conducted by IIMs, IITs, IISc, XLRI. NIFT,NID etc.
Architecture, Agriculture studies, Fine Arts and Designing etc.
Hotel and Hospitality.
Courses such as SAP , ERP , GNIIT , Air Hostess Training programmes etc.
Distance learning programs and online certifications.
Degree/Diploma courses like Aeronautical, pilot training, shipping, etc.,
Aircraft Maintenance Engg, Pre-Sea Training courses and the like.
Nursing and Para Medical courses (includes admission via management quota).
Courses offered by reputed institutes that assure employment and are Govt. certified.
Courses offered in India by reputed and certified foreign universities.
All courses listed here- www.ugc.ac.in , www.education.nic.in and www.aicte-india.org
What is the age restrictions for subscribing to an education loan?
Generally, there are no restrictions. Most banks and financial institutions do not impose this rule. However, certain lenders do mark an age limit spanning from 16-35 years.
Aside from the fee payable to the school/college, what other expenses are covered by the loan?
Towards the purchase of books, uniforms, equipment and instruments.
Purchase of computers/laptops, if deemed necessary for the completion of the course.
Fees paid for Exams, Library, Laboratories, Hostel, etc.
Building fund, Caution deposit, Refundable deposit (must be supported by receipts/bills).
Costs incurred in travel, for studies abroad.
Additional costs that are required to successfully complete the course, including but not limited to, Study tours, Thesis work, Projects, etc.
Does taking an education loan entitle me to any tax benefits?
Not immediately. However, after you start repaying, you are free to deduct the loan interest amount from your total income when calculating tax.
How does the bank track my educational progress through the course period?
The applicant is expected (and mandated) to submit his/her progress reports periodically. The progress reports could be mark sheets or a suitably attested letter from the applicant’s school/college.