Education loans are the loans which are offered for higher studies of students by the banks. These loans are given for pursuing graduation or post-graduation courses both in India and overseas. In education loan apart from tuition fees, the other expenses such as rent fee, equipment purchase, and other minimum required charges are also covered in this loan. In case of overseas education loan, they even provide the return ticket of the student. In education loan, parents has to co-sign for an education loan,, as students don’t have any credit history. Parents or guardian are responsible for repayment of loan. Moreover, for education loan, it requires collateral to submit for security purpose. In case, if you pay the loan on time and paid the interest regularly, they you will get discount on the education loan.
The eligibility for an education loan are varies from bank to bank, but a few elements are common for any bank/financial institutions: Students/candidate should have confirmed admission in a college/educational institutions at the time of application. Candidate must be Indian nationality. Candidate must be in between the age of 16-35 years. The candidate must have a co-borrower (blood relation /family) member, who can act as the guarantor for the loan. Candidate must submit collateral in the form of a fixed deposit, which must be more than 4 lakhs.
The documents which you must at the time of applying for education loan includes: Confirmed admission letter and other papers, which validates any scholarships the applicants has qualified. Additional expenses schedule Mark/score sheet of entrance test. Copies of foreign exchange permit or student visa for overseas studies. Six months bank accounts statement(joint account with parents or guardian) Proof of age and residence Statements of assets and liabilities of borrower Two Passport size photographs Complete documents related to collateral, whose values must exceed 4 lakhs.
All UGC recognised courses in case of India and all regular courses in case of abroad. Each bank/financial institutions has its own list of educational institutions and courses, for whom they provide a loan for whether in India or abroad.
Education loan can cover expenses such as: Exam, lab and library fees whatever may be applicable. Tuition fees and Hostel expenses. Any refundable caution deposits paid to the university or educational institutions Cost incurred for purchasing books, uniforms, and similar expenses for completion of the course. Travel expenses (return ticket in case of international flights)
Yes, as students don’t have their any credit history. So it’s mandatory to have a co-borrower either parents/ family members /spouse as a co-applicant.
No co-applicant must be a parents/family members/spouse. Friends doesn’t under any of these category.
The maximum limit for education loan must be in between 10-15Lakhs within India, while in case of abroad it varies from 20-30 Lakhs. In some cases lenders provide beyond this limit. If the borrowers have good credit history or they provide collateral, which satisfies the amount to be sanctioned.
Generally the education loan varies in between 5-7 years in case of most of the lenders. In case of higher amount of loan, some lenders provide an offer up to 15 years for clearing the loan amount.
Generally Banks provide 90% of expenses for educational expenses and some of the lenders may even provide the complete amount for education expenses. However, the exact amount the applicant can get depends on some factors such as monthly earnings of the co-applicant, the value of collateral submitted, academic records of the students and similar other factors.
The amount of loan for tuition and hostel fees are directly paid to the college or educational institutions as a draft and the remaining expenses for laptop, books, travel, food expenses are directly provided to the applicant.
The time, before the repayment of loan provided by the bank to the applicant is considered as the holiday period. Which is usually 6 months or 1 years after the completion of the course or the time when the applicants start getting whichever be the earlier in these case. In case of break in the course or the applicant chooses a sabbatical, then it entirely depends on the lender bank’s discretion on whether to add a few extra months as a holiday period are start adding interest for the amount.
Yes, you can avail tax benefits under sec 80E of the income tax act for the interest you pay for education loan. This benefit can be avail up to Rs. 150,000 deduction under Section 80C. Tax benefits can be avail after the applicant start paying for the loan. Further, the deduction amount is available until the applicant pays off the complete interest amount on the loan or for a maximum period of 8 years, whatever may be earlier.
Education loans are offered by banks to students to enable them to pay for higher studies such as graduation and post graduation courses, both in India and overseas. Apart from the tuition fees, other aspects of expenses such as hostel charges, equipment purchases and other course related expenses may also be covered by the education loan. In case of overseas studies, many education loan providers include the price of a return ticket into the education loan corpus.
As most students have no previous credit history, the parent or guardian has to co-sign for an education loan as a guarantor. Moreover, education loans also require key lender approved collateral such as property documents, fixed deposits, etc. Though there is an interest free (moratorium period) for an education loan, if you service the interest accrued on an education loan during the period, you may receive a further discount on the education loan.