With increasing educational expenses, most of the Indian parents chose the loan assistance to offer their children with quality education at reputed institutions. Quality of education is the secret of a successful life. But paying for quality education is becoming so hard with this rapid increase in educational expenses where educational loans benefit us. Education loans can be taken as Private bank loans or Government bank loans in India. The Government of India offers several loan schemes to assist students and their families to achieve the dream of pursuing higher education.
We’re here to provide you with detailed information on “Education Loan in India” that will help you in every possible way to get admission into dream colleges of your choice. Education loans are offered to assist students with financial aids to help them pursue their dream education. This page clears all the doubts about accessing education loans for Indian students which include education loan details such as important factors to consider, interest rate, eligibility criteria, documents required and so on in the table of content listed below.
Given below are the list of 10 top education loans and offering banks
- Avanse Education Loan
- HDFC Education Loan
- ICIC Bank Education Loan
- Axis Bank Education Loan
- Canara Bank Education Loan
- Indian Bank Education Loan
- Vidyalakshmi Education Loan
- Bank of Baroda Education Loan
- State Bank of India Education Loan
- Prodigy Finance Education Loan
To know more about education loan schemes in India click on the links.
- Types of Education Loans in India
- Eligibility for Education Loan in India
- Factors Considering Education Loan in India
- Interest Rates for Education Loan in India
- Documents Required for Education Loan in India
- Education Loan Repayment
Types of Education loans in India
An education loan is designed to offer financial aid to the students by affording the cost of education. But why do they have different loan schemes and how does it differ from one another?
Education loans are primarily classified as domestic loans and study abroad loans where the sanctioned amount of domestic loans is lesser than the study abroad loans. Because expenses over study abroad programs are higher. Here are other sections of educational loans in India.
National and International Educational Loans in India
The process of Education loans for national and international loan schemes are quite different. Major difference with these loan schemes are financial needs where educational expenses for pursuing studies abroad are quite higher.
- Educational loans in India for abroad studies: international loans are aimed at applicants who plan to study abroad. Generally, lenders have a list of institutions or specifications they support. The loan is approved if the applicant secured a seat in one of those institutes.
- Educational loans in India: Domestic loans are meant for applicants who wish to pursue higher education in India. Lenders have eligibility criteria for the Indian institutes as well. Similar to study abroad loans, domestic education loans are approved if the applicant secured admission in an institute that meets the requirement.
Read on: Education Loan for Abroad Studies
Educational Loan based on Qualification
Besides the national and international educational loans, there are other educational segregation in loans based on qualifications. For example, some loans are made for studying in premier institutions like IITs and IIMs. Educational loans based on a qualification:
- Undergraduate loans
- Graduate or professional loans
- Career loans
Read on: Education Loan in India
Eligibility for Education Loans in India
To avail education loans in India students should satisfy the below eligibility criteria set by the Banks of India.
- The student must be a citizen of India.
- The student should have already confirmed the admission to any recognized educational institutes in India or abroad.
- The applicant should be between the age of 18 to 35 years.
- There should be a co-applicant who can be either parent/guardian or spouse/parent-in-law in case of married applicants.
- Students should display a good academic record of excellence.
- The course applied for should be either professional, technical or at least developmental, leading to job-oriented learning.
- The educational university or college one is applying to also plays a major part. A top recognized institute will help secure a loan quickly. A good example would be schools such as IIT and IIM to name a few.
Important Factors to be considered
One must be extremely conscious and well informed before making a major decision such as applying for a loan. It should be the perfect fit to work towards interests. This requires the right information and guidance concerning education loans. Some of the key important factors to be considered when applying for an education loan have been listed below.
- Education Loan in India Interest rate
- Waiver Period
- Margin Money
- Preclosure of education loan
- Expense covered
- Additional charges
Read on: Education Loan without Collateral
Interest Rate for Education Loan In India
The interest rate is an important factor to be considered before applying for an education loan. Here you get an overview of the interest rate imposed by various banks and it varies with the range of loan amount. However, there can be a revision by the bank in the values. As this information is intended to give a basic structure of the interest rate, you can visit the official website of the particular bank to check for an update. The interest rate is one of the most important factors for education loans in India.
Here are the popular banks in India that offer education loans,
- State Bank of India
- Indian Bank
- Canara Bank
- Bank of Baroda
Read on: Education Loan Interest Rates
Documents Required For Education Loan in India
Document to be submitted for applying education in India differs for different banks. But there are common list of documents to be preferred and noted before applying for any education loan
- Proof of Identity
- Proof of residence
- Age Proof
- Latest salary slip or Form 16 along with a recent salary certificate. ( Applicable only for the salaried candidate)
- Bank Statement / Pass Book of the last 6 months
- Copy of admission letter of the Institute
- Fees structure from the Institute
- Application form
- Two passport size photos (both Applicant and Co-Applicant)
- Mark sheets or passing certificates of previous degree courses (Scholarship documents if any)
- An affidavit or that confirms that no loan has been availed from another bank or financial institution
- Visa approval and travel papers (only for studies overseas)
Education Loan Repayment
The repayment rules of Education loan in India are listed below
- After the completion of the course, those taking education loans get a moratorium of six months to a year, before they start repaying.
- In the case of an engineering course, a student is granted four years (the course duration), along with an additional year, to start repaying.
- The repayment has to commence a year after the course is over, even if the student doesn't manage to secure a job. Once the repayment starts, the borrower can avail tax exemption benefits under Section 80-E of the Income Tax Act.
- Usually, it is the first loan a student avails of and, therefore, by repaying on time, students can build good credit histories; this will be of immense help when they seek to avail of automobile loans, home loans, credit cards, etc.
- With timely education loans in India repayment histories, students have been building great credit scores for themselves. In many cases, they get pre-approved loans for other requirements, based on impressive credit scores.
Read on: Education Loan Repayment
Discussed above are the common factors followed for offering education loans in India. The separate articles updated below are the detailed explanation of education loans offered by different banks in India.