Education Loan Scheme
Education Loan For Indian Education is a type of loan that enables you to pay for your education expenses. This loan type is offered by a number of banks in India. They differ in terms of interest rates and eligibility criteria. Union Bank, for example, offers education loans under its credit guarantee fund scheme.
SAQ (Student Asked Question)
What is the maximum Loan Tenure for Education Loan?
15 to 20 years
What are the Courses under Education Loan?
- UG (Undergraduate programs)
- PG (Postgraduate programs)
- Doctoral courses and PhDs
- Certificate courses of 6 months or longer duration
- Job-oriented courses
- Technical/diploma/professional courses
What is the document required for an education loan?
Admission letter, Education Mark sheets, Age proof, ID proof, Address proof, Salary Slips, bank account statements, ITR with income, Audited balance sheet, Recent bank statements, Proof of turnover (service tax return/sales receipt), Audited balance sheet
Which education loan is best For Students?
| Punjab National Bank | 8.15% onwards |
| SBI( State Bank Of India) | 7.00% onwards |
| Axis Bank | 13.70% to 15.20% |
| Bank of Baroda | 7.95% onwards |
| HDFC Bank | 9.55% to 13.25% |
| Kotak Mahindra Bank | Up to 16% |
| Federal Bank | At the discretion of the lender |
How can I get Education Loan in India?
To qualify for an education loan, you need to submit your KYC documents, valid income proofs, and an allotment letter. Additionally, you must have a bank deposit account. Bank also provides education loans for courses that are government-approved. Those courses include job-oriented and technical diploma courses. The repayment terms are flexible and can be up to 15 years. However, you must provide tangible collateral security if you are taking an education loan of more than Rs.7.5 lakh.
Benefits of an Education Loan
The main benefit of education loans is that they do not have to be repaid immediately and you can extend the repayment tenure up to five to seven years after completing your course. Besides, you can take advantage of the interest subsidy offered by government-run banks. A student can also opt for a co-applicant such as a parent, sibling, or spouse. In addition, education loans do not require a guarantor. However, if you require a loan for more than Rs.4 lakh, you may have to submit a third-party guarantor or place collateral.
The cost of a good education is rising at a fast pace, and an education loan can help you finance that cost. Getting a study loan can be a great way to give your child a head start in life. All reputed banks in India offer these loans to help students pursue their dreams of higher education. The low interest rate on education loans makes them a popular choice among students and parents.
Another benefit of an education loan is its tax benefits. The interest on an education loan is tax-deductible and you can claim it for up to eight years, depending on your income tax situation. Moreover, it is important to note that the government’s interest subsidy scheme allows students from economically weaker sections of society to take an education loan. The interest rates on these loans are lower than those of other unsecured loans.
Another benefit of an education loan is the fact that it helps build financial discipline. Unlike other loans, students who take study loans need to start repaying them as soon as they begin working. This helps build a strong credit history, which is important when applying for future loans. Another benefit of an student loan is that it doesn’t disrupt your retirement plans or investment portfolio. You can use an education loan to pay back your debts or build up your contingency fund.
Another benefit of study loan for Indian education is that the interest on the loan is completely deductible under Section 80E of the Income Tax Act, 1961. Furthermore, students studying abroad do not have to pay TCS, which is 5% of the total cost of the loan. An education loan is a good way to pay for the cost of education, which can be prohibitively expensive. Aside from being tax-deductible, an education loan can help students pay for various other expenses associated with education.
Time Duration of an Education Loan
The duration of an education loan in India varies depending on the lender. It can range from Rs. 1 lakh to more than 30 lakh. While loans up to 4 lakh are unsecured, those above that require a third party guarantee. Most banks require that the applicant has a co-applicant who can help pay back the loan. The repayment period can begin as soon as the course ends or as soon as he or she starts working.
The maximum loan amount for an Indian education can be up to the cost of attending college or university, which includes tuition fees, books, health insurance, and other expenses. Interest rates will vary according to the type of loan and the amount lent. The monthly repayments will depend on the loan amount and the repayment schedule. Some lenders allow students to make bulk prepayments and thus reduce their interest burden.
Education loans for Indian education have several repayment options available to suit the needs of the borrower. While most government banks do not require applicants to start repayment until the moratorium period is over, some banks require students to make EMIs throughout the duration of their course. While most banks will offer a repayment period of between 12 and 15 years, students may opt to pay off their loans earlier if they are able to do so.
An education loan is a good way to help students pursue their dreams. It helps to pay for tuition fees, airfare, and accommodation expenses. It’s also a way to build a good credit history and qualify for other loans in the future. A student loan calculator is available online and is useful for those who are looking for the best study loan.
The duration of a study loan for Indian education is typically 8 years, minus the moratorium period. A loan is usually repaid in full within eight years, though this may be extended with approval.
Co-signer and collateral requirement
An education loan is a financial product that is given to a student to pay for their educational expenses. The amount of the loan can be between five to ten percent of the total cost of the education. However, some financial institutions may require a co-signer or collateral to fund a larger portion of the loan.
A co-signer can be a family member or friend. However, the co-signer and collateral requirement for an education loan are different in each country. Private lenders consider the co-signer’s financial stability and add additional eligibility criteria. Government banks, on the other hand, accept a co-signer or collateral but do not consider the financial profile of the co-applicant.
The interest rates of study loans differ depending on the country. Lending institutions and banks can offer favorable rates if they believe that they will be able to recover their money. For an education loan, even a few decimal points of lower interest rates can make a huge difference in the financial situation of a student. If you are a student whose family income is not stable, an unsecured education loan can be a great option.
For a secured study loan, the student must have a co-applicant with a stable income. A co-applicant is a second person who guarantees that the student will be able to pay back the loan. A financial co-applicant should also be able to provide the necessary documentation.
Interest rate For Education Loan
Investing in quality education is expensive, and students need to carefully plan their budgets. The most popular way to pay for college in India and abroad is to take out an student loan. These loans cover a variety of course-related expenses, including textbooks, uniforms, refundable deposits, and transportation.
Students studying in India can avail of a loan amount of up to 100% of the cost of their attendance. However, the total amount may not be sufficient to cover the entire cost of education. They may have to repay the loan amount in installments. The repayment duration depends on the student and the loan provider. In some cases, low-interest repayment periods are offered during the student’s college years, or immediately after graduation.
The interest rate on an education loan is linked to an external benchmark, called the repo rate. In recent months, the RBI has raised its repo rates by 140 basis points, which means the interest rate on an education loan is likely to rise. Taking this into consideration, banks in India are providing flexible schemes to attract students. Many of these banks also offer longer repayment terms, and even extended moratorium periods.
The interest rate on an loan is important to determine how much you can afford to borrow. Many banks offer different interest rates, but a government-owned bank is the cheapest. Its 6.95 percent interest rate means that you would pay Rs 30,136 per month for a loan of Rs 20 lakh over seven years. The second-cheapest lender is the Punjab National Bank, with a 7.45% interest rate. In addition to these two banks, Union Bank of India and IDBI Bank offer the same rate for an education loan.
In addition to government-sponsored loans, there are also private student loans. These are offered by banks and other private institutions, but their interest rates are variable. Examples of private education loan lenders include Prodigy Finance and Mpower Financing. While an study loan in the US requires a co-signer, the same is not the case in India. Some banks even offer education loans with an Indian co-signer