Education has become one among the essential desires of today’s world. With increasing fees structures of universities, it has been very difficult for students belonging to middle class to afford international education. However, if lack of money is the hurdle between you and your dream education the simplest solution to your problem is education loan. Education loans are given to students purely for educational purpose. They are provided to students for following academic programs like BE, ME, MBA, doctoral programmes, post-doctoral programmes, etc.
Education loans are a very common feature for pursuing quality education both in India and abroad. An undergraduate engineering course fee in India could be anything between Rs 5-10 lakhs while a medical degree in a private college can be Rs 30 lakhs to Rs 50 lakhs. The management fees for a good MBA degree can be anything Rs 10 lakhs to Rs 15lakhs. To cover your education costs, the best thing to do is to opt for the right education loan.
Eligibility for Education Loans
- Indians of the age between 16 to 35 years pursuing Bachelors/Masters/Doctorate degrees
- Confirmed admission letter from UGC recognized university
- Co-applicant is mandatory for all full time programs. Co-applicant can be parents, siblings or spouse
- The size of education loan depends upon the course and also the college. If you have opted for post graduate courses in premier management institutes like the IIMs, banks offer loans up to 20 lakhs. However, the average loan is anything between Rs 2 lakh to Rs 20 lakhs.
- For loans more than 7.5 lakhs third party guarantor is required.
What will an Education Loan Cover?
An education loan will cover the following things:
- Tuition Fees
- Hostel and boarding Fees
- Books and Supplies
- Examination and Library Fees
- Travel Expenses (if studying abroad)
- Living Expenses
- Health Insurance (if travelling abroad)
How do I apply?
Most banks provide an online application with support. After you complete the application form, a bank representative visits your house and collects the application and required supporting documents. A credit team reviews and approves the loan or asks for additional information. Once you sign the education loan agreement, the bank deposits the loan amount in the required bank account.
Documents for Education Loans
- Admission proof
- Break-up of the costs of the course
- Completed loan application form and photographs
- KYC (Know Your Customer) document
- All academic mark sheets and certificates
- PAN Card of the student and Parent/ Guardian
- AADHAR Card of the student and Parent/ Guardian
- Proof of identity (Driving Licence/Passport/Aadhar/ any photo identity)
- Proof of residence (Driving Licence/Passport/Electricity bill/Telephone bill)
- Student/Co-borrower/ guarantor's bank account statement for last 6 months
- IT return/ IT assessment order, of previous 2 years of Parent/ Guardian/ other co-borrower (if IT Payee)
- Brief statement of assets & liabilities of Parent/ Guardian/ other co-borrower
- Proof of income (i.e. salary slips/ Form 16) Parent/ Guardian/ other co-borrower
Important Points to Remember
- Providing margin money for education loans exceeding Rs 4 lakhs which is usually 15% of the loan amount is
- You have to provide some immovable property in your name for a loan amount of more than Rs 7.5 lakhs
- Education loan amount for studying abroad will depend on the exchange rate at the time of disbursement.
- Your repayment will start after a moratorium period
- Completing your KYC or (Know Your Customer) is an essential part of the loan process
Click here: Study Abroad Education Loans