Education Loan – Type, Rate, Eligibility, Document Required, Benefit

Education Loan – It is basically a type is a normal loan like other loans but the terms and conditions of an Educational Loan are different from other Loan and this Loan is easily taken by any of the needed Candidate. Mainly The educational loan is taken to cover higher studies expenses. Educational loans provide financial support to those students who want to be interested in higher studies but their financial condition is not much good.

Educational Loan

Many students in India want to pursue higher studies but they are not able to do so because of their financial independence. But there are many banks and universities in India and they arrange loans for higher studies in universities of many countries. In India, students are given education loans for many universities like IIT IIM and Symbiosis Law School. Some of the major types of student education loan banks in India are HDFC Bank, Canara Bank, Union Bank, SBI Bank and Axis Bank, Punjab National Bank etc. For the foreign study of students of India, some banks give loans ranging from Rs. 15,00,000/- to Rs. 25,00,000/- and some give loans of banks up to Rs. 75,00,000/-.

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Official link for education loan

This is the initiative of PM to help all those who want to continue their students even after low financial condition. Here is given below are all the official links to education loans.

TitleLink
Vidya Lakshmi Official websiteClick Here
RegisterClick Here
LoginClick Here
FAQClick Here
Contact detailsClick Here

How to Apply

Anyone may inquire about the loan process at any bank of your choosing, or by applying online after they submit their loan application, the bank will begin the process by confirming their documentation, analysing the course of study for which they want to borrow money, and assessing the collateral they can supply. After that, the bank will keep them informed.

Educational Loan – Eligibility Criteria

The Eligibility of an Educational Loan is not much hard. Any needed candidate easily fulfils their eligibility criteria of Educational Loan. The Eligibility of an Educational Loan is given below.

Nationality

  • The citizenship of candidates who wants to take an Educational Loan should be Indian.

Age Limit

  • The Age Limit of candidates who want to take an Educational Loan is between 16 to 25 years old.

Note – If the candidate’s age is 18 or 18+ they can take Educational Loan easily because they have their own pan card.

Educational Qualification

Candidate marks do not matter in educational loans. Interested Candidate has gotten admission in any recognized University/Institute as well as school.

  • The educational Loan will be given only after showing the fee receipt of admission.

Top Education Loan Rates

This rate varies from year to year and the following data is for the year 2021.

Bank NameInterest Rate (% p.a.)
Bank of Baroda6.75
Union Bank of India6.80
Central Bank of India6.85
Bank of India6.85
State Bank of India6.85
Punjab National Bank6.90
IDBI Bank6.90
Canara Bank6.90
Bank of Maharashtra7.05
Indian Bank7.15
Indian Overseas Bank7.25
UCO Bank7.30
HDFC Bank9.55
Axis Bank9.70
Federal Bank10.05
ICICI Bank10.50
Karur Vysya Bank10.75
Karnataka Bank12.19

Courses Eligible for Educational Loan

Educational Loans are available easily for most of the courses. There are many types of courses available like professional courses, General courses, vocational courses etc. The Educational Loan are available so quickly for professional courses like engineer or medical because there is lots of chance to get a job and slightly tougher for general courses such as 3 years degree program like B.Sc (Hons) in physics, mathematics etc and Slightly more difficult for vocational courses. The List of course which is Eligible for Educational Loan is given below.

  • Graduation Courses – BA, B.Com., B.Sc etc.
  • Post Graduation Courses – Masters & PhD.
  • Professional Courses – Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc.
  • Certification Courses – Computer certification etc.
  • Courses like ICWA, CA, CFA etc.
  • Courses by Reputed Indian (UGC/Govt./AICTE/AIBMS/ICMR etc) approved by foreign institutes in India.

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Some tips while taking a loan

The following are some tips for loan takers.

  • The student and his/her parents should know all the details about his/her college and its placement and the method of teaching is. The student should know about the campus of his/her own college.
  • The student should know the interest rate of all the banks because all the banks have different interest rates.
  • The student should not take a loan for more years.  The student should have taken a loan of at least a minimum number of years.
  • The student should continue to repay his loan.
  • The student should pay more attention to enable himself to repay the loan.

What all do you get in Educational Loan?

Candidate other expenses are also included other than college fees in educational Loans. The list is given below.

  • Fee is payable to the college / University / Institute by the candidate.
  • hostel and mess fee.
  • Books, uniforms and other essential equipment like laptops for IT.
  • Travel Expenses/ Passage money for studies abroad.
  • Purchase of computers – essential for completion of the course.

Note – for abroad study, If the Loan amount is above 4 Lakhs then some margins are arranged by the parents / Students.

Types of Educational Loans

There are two types of Educational loans one is a secured loan and another is an Unsecured Loan.

Secured loan

The secured loan means the loan is taken from the government like SBI, PNB etc.

Advantage of Secured Loan

  • The rate of interest is lower.
  • The probability of approval of the loan is high.
  • The duration of repayment is longer. (12 – 15 years including course duration)
  • Parental income is not required for the approval of a loan.

Disadvantage of Secured loan

  • Requires Collateral.
  • The Amount of Loan is Less.

Unsecured Loan

Unsecured Loan means Loan is taken from the private bank like ICICI, HDFC etc

Advantage of Unsecured Loan

  • Does not need Collateral.
  • The Amount of Loans is high.

Disadvantage of Unsecured loan

  • The rate of interest is high.
  • The probability of approval of the loan is low.
  • The duration of repayment is not so long. (10 years including course duration)
  • Parental income is required for the approval of the loan.

Note – Decide cautiously as well as discuss with parents/guardians which one is better for you.

Educational Loan – Key points.

These are the key points that loan takers need to know.

  • The interest rate is less for female candidates as compared with male candidates.
  • Top colleges/Institute students get Educational loans easily. Top Colleges like IT, NIT, IIIT, BITS, Top DU colleges as well as those candidates who have cleared the high-level entrance exam like JEE and NEET.
  • At the time of repayment holiday, Govt. Banks do not ask for any interest payment.
  • After repayment holiday, the Candidate has to give EMI of the Loan. Click here to calculate EMI or go through google.

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Document Required

The following are the list of document that is required for an educational loan.

  • Passport size photograph
  • Address proof
  • Marksheet of Qualifying Exam
  • Fee slip of current study programme
  • Identity Proof like Aaadhar card, Voter ID card, etc.
  • Student or Parent pancard
  • Income certificate of student’s parents or  Salary slip of last 5 months.
  • The student also need a guarantor who can repay the loan of the student in addition to his parents if he /she doesn’t gives the loan.
  • The bank statement of the parents of the student has to be checked. Even if the parents of the student do business, the bank statement has to be checked.

Tax Benefits on Education Loan

When loan takers begin repaying their education loan, they can claim an income tax deduction under Section 80E for the interest portion they pay each month. Although, The deduction cannot be claimed on principal repayments. In addition, there is no limit to the amount of interest payback on an education loan that they can claim. They’ll need to get a certificate from the bank to prove it. The facility is only accessible for eight years from the day they begin repaying the loan or until all interest is paid off, whichever comes first.

Education Loan EMI Calculator

The EMI calculator for student loans is a useful tool that calculates your monthly EMI payment to the lender. It’s a slider where you enter the parameters for Principal amount (P), Time period (N), and Rate of interest ® to calculate your EMI and plan ahead of time.

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Study Loan Repayment System

After finishing the course, some lenders provide you with a six-month grace period to find suitable employment and begin payments. Depending on the lender, this grace period may differ. You may begin the repayment procedure in the form of EMIs if you find work within this time frame. Loan Takers can contact bank officials, who will recommend an EMI based on their monthly income. They can begin making monthly payments if you agree with our proposal. Otherwise, they have the option to haggle over the price. In any event, the maximum payback period is often eight years.

Education loan contact details

The following are the official contact details of Vidya Lakshmi.

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Frequently Asked Questions

Anyone can get an education loan by visiting a bank or by applying online. If you fulfil the bank requirement then you will definitely get an education loan.

In general, you can borrow up to 4 lakhs for higher education without putting up any collateral. You can borrow up to 15 lakhs for studies in India and up to 25 lakhs for studies abroad under the education loan plan.

A minimum loan amount of Rs. 50,000/- is available, as well as a number of additional advantages. The following are some of the benefits of an Axis Bank educational loan: A maximum loan amount of Rs. 50,000/- is available to you.

Obtaining a student loan is a very simple procedure. You’ll apply for a loan with a federal or private lender, then wait for the cash to be sent to your school.

In most cases, school loans are unsecured. It implies you won’t have to put up any assets as security. Education loans of Rs. 7.5 lakh or more, on the other hand, may need collateral.

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