Education Loan helps to finance your higher education. Expenses in overseas education, scholarships is also covered in it. Parents in India do not appreciate loan for education. They ask their children and students to pursue studies as per their wealth and income. Lack of awareness on education loan is still at large. However the scenario is improving day by day.
Education Loan for Higher Education
Our Loan Experts have prepared a comprehensive blog post on education loan for higher education. We have collected details on available educational loans in market, eligibility conditions, documents required and application process. We are sure that it will benefit aspirants of education loan.
What are the expenses covered under Education Loan?
Your Education Loan May Cover the followings:
- Tuition Fees
- Examination Fees
- Hostel or Accommodation Fees
- Library Charges
- Uniform Cost
- Books and Courseware
- Equipment related to course, Lab Expenses
- Travel Expenses (Return International Flights)
- Vehicle Purchase up to certain percentage
- Free Credit Card provided along with Education Loan
Which Courses are Covered in Education Loan?
Higher Education Loans are provided for below types of Courses
- Post Graduation
- Professional Courses like Management, Engineering
- Vocational Courses
- Technical Courses like Bio-Technology, Medical etc
- Non Technical Course like Photography, Art, Film Making
Education Loan may be availed for all courses recognized by UGC in India and all regular courses in overseas. Each lender in the market has its own list of institutes and courses identified for easy and swift loan process.
Who is Eligible for Education Loan?
In India if you want an education loan then your citizenship must be Indian. Confirmed Admission proof make you eligible to apply for the loan. Age of applicant is preferably between 16-35 years. Co-applicant is required as students do not have any credit history or repayment behavior. Collateral is required for the loan amount above 4 Lakhs. Once you fulfill these conditions, You are eligible to get a higher education loan.
Important List of Documents
Keep ready below list of documents as your complete loan application:
- Admission or Scholarship Confirmation Letter
- Schedule of Expenses having detail of Tuition Fees, Hostel Fees etc
- KYC Documents of Applicants Like Aadhar, PAN etc
- Income Proof of Co-Applicant
- Bank Statement of Applicant and Co-Applicant
- Passport Size Photographs
- Filled Loan Application Form
How much is Loan Amount?
Banks may provide you maximum loan up to 15 Lakhs for education in India whereas in case of foreign studies, the loan amount may be up to 20 Lakhs. Generally lenders provide up to 90% of the total education cost for a particular course. However, It totally depends on the types of Admission, Applicants profile and eligibility conditions.
What about Security or Collateral retirements?
- Loan Amount up to 4 Lakhs- No Security or Collateral is required
- Loan Amount Between 4 Lakhs to 7.5 Lakhs- Third Party Guarantor is required
- Loan Amount above 7.5 Lakhs- Collateral or Security is required (This may be your Fixed Deposits, LIC etc)
How Repayment of Loan is Done?
The loan you borrow has to be repaid to lenders under specific period. This may be from 5 to 15 years. Moratorium period is given as extension period (normally 6 months to 12 months) to start the repayment of loan after course completion. The mode of payment may be through ECS mandates, PDCs or similar.
Tax Benefits of Education Loan
Under section 80 E of Income Tax, the borrower may avail the Tax benefits. The limit of tax benefit is maximum up to 1,50,000/- under Section 80C. The tax benefit may be taken when repayment of loan starts. The benefit may be availed until the loan is fully repaid or up to 8 Years whichever is earlier.
For comparison of rate of interest, Loan Amount, Better loan opportunities you may visit here
Education Loan is the first credit availed by most of the students. It given an exposure to the world of lending and credit discipline. This helps them to develop a healthy credit portfolio for their future loan requirements such as Home Loan or Car loan or Business Loan or any other loan.