How To Get Education Loan For Students in India – Eligibility, Documents, Interest Rates. How To Apply For Best Education Loan Scheme For Boys & Girls Students in India.
How To Get Education Loan For Students in India – Best Education Loan For Boys & Girls Students
Good news for all the students who are looking to apply online for Education Loan. Now you may submit your Education Loan Application Form through online bank without any problem. In India almost all private & government banks provide education loan to eligible and needy students. Today in this article we cover complete details regarding the Education Loan Schemes Application Form, Eligibility Criteria, Required Documents, How To Apply Online, Intrest Rates, Benefits of Education Loan, etc.
Education Loan Scheme For Students 2021 – Eligibility, Documents, Benefits
Getting a loan nowadays is a tough row to hoe. Whether it’s for a house, car, or study, loans are popular today. When it comes to educational purposes, it becomes more frequent as college expenses are not everyone’s cup of tea. While many students drop their studies right there or go for a local course, on the other hand, some take the help of education loans to fulfill their dreams and desires.
As the cost of education in India is no less than studying abroad, sometimes a student is restricted from getting admission because of his financial matter. Although many colleges and institutions provide a scheme of scholarships for merit students, even then the amount of college fees is much higher than the amount of scholarship provided.
Now, what to do? In that case, many students opt for study loans. Education loans help to bridge the gap between shortfall and the required amount. With so many banks offering loans for education purposes, it becomes confusing both for the child and the parents to opt for the right bank to meet their desires.
For this, everyone must be fully aware of all the terms and the criteria for applying for a student loan and then choose the desired bank that can meet their needs.
Apply Online For Education Loan Through Vidya Lakshmi Portal
What is an Education Loan?
An education or study loan is a loan that covers the tuition fees, hostel fees, exam fees, and other miscellaneous charges of an institution. The education loan can be provided by banks for both national or international studies depending upon the list of courses the banks have in their system.
Who Can Apply for Education Loan?
Well, not everyone is eligible for getting a study loan. Some requirements need to be meant before proceeding further. Such as:
- Main applicant, i.e, student. ( Not every student can apply for a student loan, there are some constraints to that also depending on the policies of banks)
- The parent of the student.
- Spouse of co-applicant.
| Eligibility type | Details of loan eligibility |
| Age-based eligibility |
|
| Course-based eligibility |
|
| Institution-based eligibility |
|
Education Loan Eligibility Criteria of Popular Banks in India
| Bank Name | Education Loan eligibility |
| State Bank of India |
|
| HDFC Bank |
|
| Canara Bank |
|
| Axis Bank |
|
Courses Covered under Education Loan
Although an education loan is provided to pay the expenses of a course or study. But the banks usually have a list with them that covers the type of course for which the loan can be granted.
In short, loans can be taken for full time, part-time, vocational, graduation, or post-graduation purposes.
Interest Rates of Education Loan in India
Usually, the interest rate of an education loan depends from bank to bank. The interest rate in India is mostly between 12.00%-16.00% depending upon the course for which the loan is being taken.
Interest Rates of some popular Indian banks providing student loans to higher education students are:
| Bank providing loan | Interest Rate: Domestic Education (Average ROI) | Interest Rate: Foreign Education (Average ROI) |
| State Bank of India | 10.14% | 10.70% |
| HDFC Bank | 10.25% | 11.88% |
| ICICI Bank | 11.00% | 11.50% |
| Punjab National Bank | 10.35% | 11.10% |
Repayment of Education Loan in 2021
The loan exerted needs to be repaid and is mostly done by the applicant himself. Usually, the loan is repaid after six months to one year of the completion of the course. The repayment period is between 5 and 7 years. The banks wait till the completion of the course of the student or the student’s employment before asking for the repayment of a loan.
Till then, banks usually charge some percent of interest to the amount of loan applied for.
Precautions For Education Loan For Students
Before applying for a study loan from a bank or financial institution, few things that the applicant has to keep in his mind are that he must check for the bank charges, prepayment charges, post-payment charges, EMI rates, etc.
Benefits of Education Loan For Students in 2021
Under section 80C and 80E of the Income Tax Act,1961, everyone is eligible for the benefits that come up with an education loan. Some of them are:
- Covers all types of courses- Generally, the education loan covers all the graduation or post-graduation courses like management, accountancy, engineering, medical, etc.- both in Indian and abroad.
- Easily available- Study loans are the main product of a bank. Banks are more into giving educational loans to students. So, it is easily available in the banks.
- Wide-ranging loan amounts- Banks provide study loans from 2 lakh to up to 20 lakhs both for studying in India and abroad depending upon the course fees.
- Low-interest rate- Education loans can be acquired at a lower rate of interest as compared to personal loans or housing loans which is its additional benefit. Moreover, females are usually provided with a lower rate of interest as compared to male applicants.
- Good credit score- Usually the education loan is considered as the first loan in everyone’s life. So, if a person applies for an education loan and repays on time, it helps to improve his credit history.
What are Qualities of Good Education Loan?
Education loans are mostly identified by their core terms and conditions, as these decide the extra amount that students have to pay while repaying the loan. These terms and conditions are laid out in the form of:
- Study loan interest rates
- Study loan eligibility criteria
- Collateral requirements
- Loan repayment conditions
How To Apply For Best Education Loan in 2021
Applying for a study loan involves fewer complications than a personal or car loan. As per the Reserve Bank of India (RBI) guidelines, there are no strict rules and regulations for the applicant to go through when applying for an education loan. However, the applicant must abide by the policies of the financial institution from which he is applying for the loan.
- Apply online through the official website of Bank.
- Apply in person by visiting the bank.
- Present the necessary documents required by the bank.
- Get the loan approval confirmation.
What Are Tax Benefits of Education Loan?
The Indian government has laid provisions for applicants to avail interest subsidy on education loans. Many private and centralized banks also provide study loan subsidies to applicants. These subsidies are generally in the form of a reduction in interest rate charge or reimbursement of interest paid on the student loan. Various government schemes for study loan subsidy are mentioned below:-
- Central Sector Interest Subsidy
- Dr. Ambedkar Central Scheme of Interest Subsidy on Education Loan for Overseas Studies
- Padho Pardesh – Scheme of Interest Subsidy on Educational Loans for Overseas Studies
Scholarships Other Option For Student Finance
Education loans are not the only way to manage one’s academic expenses. Students can get the benefits of various scholarships, fellowships and grants available every year. The application process and eligibility of scholarships are easier than the study loans. It is not compulsory for students to only look for a scholarship based on merit, as there are scholarships based on means as well which help financially weaker sections. Many banks also provide options to adjust student loan payments by using scholarship amount as well, so that loan repayment becomes easier.
Education Loan vs Personal Loan – Which is Best?
Many parents or students think that applying for a personal loan is a much easier task as it requires fewer complications. But this is a false assumption. A personal loan is generally granted at a higher rate and the repayment charges are also higher as compared to educational loans.
Now that you are aware of all the terms and points, why not apply for an education loan that can help you build your career and fulfill your dreams?
| RBI Education Loan Guidelines Link | Click Here |
Complete Details given here are based on official details. If you get help from this article, share with your friends. You can also comment queries in below comment section.