How to get Education Loan ?

Education Loan

As we all know that quality education plays very important role in creating a successful life . But due to sky rocketing fee of college/Institution every year , it is very difficult for a student to take a quality education from a premier college/Institution . If a student qualify the entrance examination for taking admission in premier college/Institution but due to high tuition fee  it is very difficult to study in such colleges/Institutions . Therefore education loan is a hopeful way for those students who can not afford such a hefty amount . On the basis of education loan facility provided by banks and NBFC student can fulfil his dream to study in premium college/Institution .

Now let me tell you how to get education loan :

#1. Eligibility Criteria :

  • Application should be Indian resident having age lie between 16 years to 35 years .
  • Should have confirmed admission in college , university recognised by UGC , AICTE
  • Mostly available for Graduate , Post-graduate & diploma courses .

For education loan approval of applicants , co-applicant is mandatory .

#2. What is covered by Education Loan:

  • Tuition fee of college/University
  • Accomodation Charges of college
  • Examination fee , Library fee
  • Books & Equipments

If any applicant going to study abroad then travelling expenses are also covered .

Amount Sanctioned : The amount sanctioned if applicant study in India will be up to Rs. 15 lacs

For abroad , the sanctioned amount will be up to Rs. 75 lacs . But it all depends upon course , colleges & banks .

#3. Collateral / Security Required :

  • Up to Rs. 4 lacs : No security is required .
  • More than Rs. 4 lacs : parent to be joint borrower + Tangible collateral security . e.g Property , Fixed deposits , Life Insurance etc.

Moratorium Period: After how much time borrower will have to start paying loan . Moratorium Period will be Course period + Max. 1 year after course completion .

e.g. If a student doing B.Tech (4 year degree courses) then up to 4 years he has not to pay any amount because he is not able to pay during this period . One extra year is given to him so that so that during this period he will get the job and start repaying the loan amount .

#4. How much Margin Money :

  • Up to Rs. 4 lacs – No margin money is required .
  • More than Rs. 4 lacs –   5% will be margin money for studying in India

e.g. If college fee is Rs. 5 lacs then applicant would have to pay Rs. 25000/ and rest amount Rs. 475000/ would be paid by banks .

For study in abroad : 15% will be margin money

#5. Interest Rate :

As interest rate is not constant whereas it is variable and depends upon colleges , Courses etc.

(i) For Premier Institutions/Colleges , Interest rate is low . e.g. For IIMs/IITs/IISc interest rate is 8.25 % to 8.65 % .

(ii)For other Institutions / Colleges : Interest rate is 9.15% to 10.15%

(iii) For girls applicant there is a rebate of 0.5% on interest rate .

Note that Interest rate varies from bank to bank so please compare it before getting loan from any banks or NBFC.

#6. Tax Rebate & Disbursement :

  • Avail Tax rebate up to 8 years under Income Tax Act .
  • Applicant should know that loan is disbursed directly to college/Institutions .

#7. Documents Required :

  • Application Form
  • Admission Letter along with fee details of college / Institutions
  • Aadhaar Card
  • PAN Card
  • Residence Proof
  • Income Proof of Parent/Guarantor
  • Passport / Visa if applicants are going to study abroad