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How can I take an Education Loan?

Education is the primary step in leading a prosperous life. But a lot of times, it gets immensely difficult to complete education or go for higher education because of financial distress. In such a situation, students often prefer to depend on education loans. It is the education loan that helps the students to seek financial aid.  However, it is extremely important to find out how to take an education loan. Yes, there are different banks and NBFCs in India that offer education loans at competitive rates.

No matter whether you are opting for engineering or medical, the fee structure of every course is sky-touching, and so it becomes immensely difficult for students to manage. The escalating price of courses & structure is one of the major reasons behind the rising popularity of Education Loan. But before you seek an education loan, it is important to have a detailed understanding of the concept.

What are the types of Education Loan?

Before you try to find how to apply for education loan, it is important for you to explore the different types of education loan that is available.  You can check out the details here!

Based on Location

There are two different types of education loan , the first is domestic education loan and the other is oversee education loan.

Domestic: Students who wish to pursue education in India could simply apply for this loan. However, the loan will only get approved if the application is admitted to an Indian educational institution and meets all other lender criteria.

Overseas Education Loan: This kind of loan helps the students to pursue their designed courses in foreign institutions.

Based on Course

Undergraduate Loans : As the name suggests, this type of education loan is given o the students who seek for financial aid in order to complete the undergraduate degrees. This degree will generally be of 3-4 year long which is under various specialisation. Having an undergraduate degree will help the individuals to get a decent job and start earning.

Postgraduate Loans: Many students wish to continue their education with a postgraduate degree. And they face a lot of issues related to finance and in such situation they seek for postgraduate loan.

Career development loan : There are professionals who are working as a corporate professional since a while but they wish to do an advance or master. And for that, one can apply for Career development loan.

Based on Collateral

Third-party Guarantee: Sometimes students can get education loans under the guarantee of the bank employee or the home bank.

Secured Loans : Students can get education loans by pledging immovable assets, like agricultural lands, residential land, apartments, houses, gold , recurring deposits, debentures, fixed deposits, bonds, and equity shares.

Unsecured Loans: Some financial institutions give student loans without any collateral just by assessing and analyzing the scope of their course.

What are the features and benefits of an Education Loan?

If you’re wondering how to get education loans in Delhi NCR, you can easily get it if you understand the features and benefits of education loans; they are:

  • Banks offer education loans up to Rs.50 lakhs for domestic students and up to Rs.1 crore for international students.
  • Most banks offer full-proof financing under education loans in India, which also includes laptop and travel expenses.
  • You can enjoy tax benefits on loan interest payment for up to 8 years under education loans.
  • It is mandatory for the parents to be joint borrowers while taking education loans.
  • In India, banks offer a loan moratorium period of up to 6 months or 1 year after completing the course.
  • Usually, the loan repayment tenure can be as long as 15 years.
  • Some banks offer preferential forex rates for international disbursements.

What are the eligibility criteria for education loans in India?

The following are the eligibility criteria for education loans in India:

  • You must be a citizen of India or Non-Indian Resident (NRI), or Overseas Citizen of India (OCI), or Persons of Indian Origin (PIO) and children born in foreign to Indian parents but who wish to study in India.
  • Most banks and financial institutions disburse education loans for undergraduate courses, postgraduate courses, diploma courses of more than 6 months duration, technical courses, professional courses, and job-related courses.
  • Banks and financial institutions usually provide education loans to students enrolling in recognised universities, professional institutes, government institutes, and international universities.
  • Undergraduate students seeking education loans must have completed 10+2 and postgraduates seeking education loans must finish their degree to apply.

What are the documents required to apply for Education Loans in India?

Here are the list of documents that are mandatory for applying education loans in India:

  • ID Proof
  • Address Proof
  • Marksheets
  • Application letter from your previous institute.
  • Salary slips
  • Latest bank statements
  • Signature Proof
  • Visa for International Loans
  • Service Tax Returns Proof
  • ITR with income computation
  • Completed Education Loan Application Form
  • Recent Passport size photographs.

How to apply for Education Loans in India?

Let’s address the elephant in the room, how can I apply for education loan, the following steps will guide you with the process.:

  • You must opt for the right bank or financial institutions, like Edubridge, who can give you an education loan. This is a very important step where you have to do intense research about different education loan schemes.
  • Once you decide the loan scheme you want to go for, you can either visit the bank branch and fill out the education loan application form or download it from their website.
  • You must attach all the necessary documents and other essentials with your education loan application.
  • The bank or financial institution will begin its verification process by assessing your application, documents, and evaluating your course.
  • After the bank’s verification process is complete, they will issue the loan agreement, you must read the terms of the agreement carefully and sign the document.
  • Finally, the bank or financial institution will disburse your loan amount towards your desired course.

Frequently Asked Questions:

  1. What is the criteria for banks to approve my education loan?
  • Banks and Financial Institutions providing education loans usually assess your course, institute, academic performance, your family’s repayment capacity, family assets, and annual income.
  1. Will the bank disburse international loan amounts in their currency?
  • Usually, banks directly disburse loans to the institute or university in their local currency for international loans.
  1. Is it possible to port my education loan to another bank that offers lease interest rates?
  • There is a provision to Port of your education loan to another bank with lesser interest rates, but you may have to pay refinance charges to your current bank. Hence, you must know the terms of your current bank well to proceed further.
  1. Do all banks and financial institutions cover 100% of the education loans?
  • Yes, all banks and financial institutions cover 100% of the education loans.
  1. Can my education loan be waived off in India?
  • Yes, there is a provision to get your education loan waived off under Government schemes, financial hardships, employment in certain sectors, disability, and a few other criterias.