Educational loans are available for undergraduate, postgraduate and professional degree / diploma courses. Nursing, teaching courses and pilot training are some of the courses available. The government’s education agencies are UGC, AICTE and MCI. Loans are available only for courses offered by Government of India and other recognized institutes.
Banks offer three types of education loans – study at top institutions in India, study at other colleges in India and study at institutions outside India. Those who get admission in the management quota of various educational institutions in India will also get loans subject to the conditions laid down by the banks.
Course tuition fees, hostel fees, boarding expenses, book-library, lab fees, computer and project work are all covered by the education loan. Donations and capitation fees are not the cost of an education loan. Recognized Expenditure Government / Self financing colleges on merit basis Based on the rate determined. Any student of Indian citizenship who has legally obtained admission in any of the Government recognized courses is eligible for a loan for study in India or abroad. Only those with Plus Two / Equivalent can apply for an education loan.
There is no specific condition regarding the age of the applicant. If under 18 years of age, the documents must be signed by the parent and approved by the applicant at the age of majority. Passed the entrance examination or any other examination on merit basis for those who have completed the selection process. You can apply for an education loan if you have access to accredited institutions. Up to two children of a family are eligible for an education loan.
Documents required to apply
Mark list of the examination passed, proof of admission to the new course, documents proving name, address and age, photo of the applicant. In addition, copies of the parent’s Aadhaar / PAN card and the parent / guarantor’s last two years’ income tax return should be submitted with the application.
Applications for education loans should be made at the parents’ place of residence or at the nearest bank branch of the institution where the study is conducted. If the loan is obtained from the branch nearest to the place of study, the permanent residence should be shifted to the branch at the end of the study.
Education loans up to a maximum of rupees 10 lakh for study in India and up to rupees 20 lakh for study abroad. Students will have to deposit a fixed percentage of the loan amount in their account for the margin.
For loans up to rupees 4 lakh, no margin is required. In addition, up to 5% of the loan for study in India and up to 15% for study abroad will have to be deposited in the student’s account as margin money.
The loan is made jointly by the student and the parent. Loans up to rupees 4 lakh usually do not require collateral. Education loans above rupees 4 lakh up to rupees 7.5 lakh may have to be secured by another person. For loans above rupees 7.5 lakh and study abroad, the equivalent of the loan amount is required. Land loans, gold, insurance policies, bank deposit certificates and third party guarantees are all accepted as collateral for education loans.
Repayment of education loan will start within one year after the completion of the course. Depending on the size of the loan, the repayment period can range from 7 years to 15 years.
The interest rates on education loans vary from bank to bank. Some institutions offer special discounts for girls and for those who pay interest regularly. Such information should be sought and understood at the time of applying for the loan.
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