Education Loan
An Education Loan does not disturb your savings. Education loan usually covers about 90 per cent of the total expenditure on education, including tuition fee, books, travel and passage expense, projects, uniforms, library, examination fee and so on. The management of education loan would inculcate financial discipline within the student. You can declare an unlimited tax deduction on the interest which you have paid for 8 years, under the section 80E of the Income Tax Act.
An Education Loan does not disturb your savings.
Education loan usually covers about 90 per cent of the total expenditure on education, including tuition fee, books, travel and passage expense, projects, uniforms, library, examination fee and so on.
The management of education loan would inculcate financial discipline within the student. You can declare an unlimited tax deduction on the interest which you have paid for 8 years, under the section 80E of the Income Tax Act.
Application Process
The question ‘how to get an education loan’ indicates that the person wants to know the procedure for the same.
- Select the bank and the loan scheme you want to take.
- After confirming both the things, contact the bank to confirm documents required to avail the loan facility.
- After the submission of documents, the bank will evaluate your profile and sanction your loan accordingly.
Eligibility Criteria for Education Loans
Knowing the eligibility criteria to apply for education loan is as important as arranging for documents required for the education loan. Even though the method of repayment, interest rate and the upper limit may vary from bank to bank, some general conditions remain the same. Considering that, check the basic eligibility criteria to apply for an education loan.
- The aspirant should be a citizen of India.
- There must be a co-applicant along with the student. A co-applicant can be your parents, siblings or spouse.
- Applicant must be 12th passed in any stream.
Documents Required for Education Loans
Education loans are sanctioned to a candidate only after submission of a long list of documents. Consequently, it is extremely important for candidates to get the list of documents required for education loan right!
General Documents Required
Thousands of Indian students opt for study abroad ventures to attain quality education. Education loans are considered as the best ways to cover the cost of studying abroad. Seeing the increasing trend in outbound students, several banks provide education loans for abroad studies at an affordable rate.
- Academic fees demand letter
- Bank statement / Bank passbook copy
- Collateral Related Documents (If Required).
To Study In India – KYC & Education Related Documents
KYC Documents
- PAN Card
- Aadhar Card
- Driving Liscense
- Address Proof
- Current House Lease Agreement
- Valid Passport
- Valid Water/Electricity/LPG Bill
- Voter’s ID Card
Post Academic Records
- Class 10th marksheet
- Class 12th marksheet
- 3rd /4th year marksheet of graduation
- Diploma/ certificate of marks
- Special education certificate
- Certificate of scholarships or awards
- Current Education
- Records of fees breakup
- Placement records of university/ college/ institution
- Conditional letter, letter of admission, permanent admission letter as a proof of admission
Foreign Education
- CAS letter for UK education applicants
- I-20 form for those who have studied from USA.
- Scorecard of exams like IELTS/ GMAT/ TOEFL/ GRE, etc.
- Entry permit
- Exchange visitors form of the country or student exchange form
- Financial Statement Related Documents.
Apply For Education Loan
The Documents Required for Education Loan in terms of Financial aspect
For Self Employed / Business / Pensioners
- Proof of turnover (Services Tax / GST return statement of business / Latest Sales Tax)
- Income Tax returns approved as well as verified by a CA at least 24 months.
For Pensioners: Proof of retirement along with pension certificate
For Employed / Government or Non-government Service / Salaried
- Form 16 ITR returns for at least 2 years.
- Salary slips provided by employer for last 2 months
- From current and previous year employer, salary computation statement
Educational Loans offered by major Banks
*Applicant can apply to any Bank under the Education’s Loan policy of Centre Government
State Bank of India
SBI bank offers loan for popular courses like MBA, MCA, MS etc. both at the professional graduate and postgraduate levels, including regular technical and professional degree and diploma courses. You can avail free interest loan from the bank in diploma courses like Aeronautical, pilot training, shipping etc. If you are applying for the Charter Institute of Management Accountants courses- CIMA London, the bank will facilitate your educational journey with its low-interest loan. If you are taking loans up to 7.50 Lakh INR, you must pay an interest rate ranging from 7.97%- 10.20%. You can expect a total educational loan of 35 Lakh INR from the bank.
HDFC Bank Education Loan
HDFC bank is another prominent name in the list of best education loans in India. It offers a range of educational loans for overseas education as well as within the country. The bank is providing immense facilities to its clients to get educational loans at their doorsteps. It is available for around 950 courses and 36 countries. You can avail up to 20 lakhs with collateral and 7.5 lakh INR without collateral. In order to avail HDFC’s education loan facility, it is mandatory that your age falls in the bracket of 16-35 years. The bank offers a whopping amount of loan in the approved and leading undergraduate and postgraduate courses including PG Diplomas
Punjab National Bank
PNB is considered as a trusted bank for education loans. It offers a wide range of higher education loans at low interest to the students. Under Shiksha loan scheme, you will have to pay an interest rate of 9.20% and the processing fee of 1% of the 10,000 minimum loan amounts. Under the PNB Saraswathi scheme, you can avail a loan amount of 7.50 % with an interest rate of 7.30% – 9.80%. Pratibha loan scheme has an interest rate of 7.20% – 7.80% and it has a loan tenure up to 15 years. Similarly, PNB Udaan has an interest rate of 7.30% – 9.80% where you can avail loan up to 7.50 lakh INR. PNB Kaushal’s interest rate is 7.30% – 8.70%. Here you can apply loan amount of starting from 50,000 to above 1 lakh. PNB Honhaar’s interest rate is 9.20%.
Bank of India
Bank of India is again one of the best banks in terms of loan providers. It offers some best education loan in India for various undergraduate and postgraduate courses. The bank offers loan facilities in professional courses including Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer, etc. You can have loan facilities to study in IIM, IIT, IISc, XLRI, NIFT, NID etc. If you are aiming for overseas higher studies, you can study courses under CA, MBA, MS etc. BOI offers two basic loan schemes including star education loan offering amount of 20 lakh INR with an interest rate of 8.95% to 9.75%. Also, it has another educational loan scheme called BOI star vidya loan offering an amount of 30 lakh INR within an interest rate of 7.25%.
Courses Covered
While sanctioning loans to students planning to study abroad, banks usually check the kind of degree students are planning to pursue. Usually, courses which offer a good ROI like Engineering, Management or MBBS are preferred by banks for sanctioning loan. Here are some degrees and specializations for which the education loans are easily provided.
- Degree Courses
- Undergraduate Postgraduate, Doctoral and Diploma Courses
- Computer Science Engineering, Mechanical Engineering, Aircraft Maintenance Engineering
- MBA, and other Engineering courses
Types Of Loans
Education loan is taken by students to provide a range of services and continue their education with the least financial load. Before you move on to figure out how to get the education loan, look at some of the common types of education loans to study abroad
Bridge Loans
This pays for students’ pre-application expenses like application, examination, interview and student tours.
Pre-Visa Loans
These are used as proof of funds availability for abroad loans and that students will not become a liability for the host nation for both accommodation and fees
Pre-admission Loans
This includes not only academic expenses but also, in-flight and overseas travel expenses and cost of admission processes before the commencement of the higher studies.
Refinancing Loans
These can be taken to repay the loans taken before and students can also choose to refinance to extend their loan tenure
Consolidated Loans
It covers a combined set of educational expenses including exam, tuition, books, educational equipment, travel, accommodation, deposits and insurance.
* Another important aspect of getting a loan is the ‘collateral’, which are assets or guarantees that are to be submitted to the bank in exchange for the loan amount. Collaterals are not mandatory for smaller amount of loans but essential to get a higher amount of loans
