Education Loan

An education loan is designed to financially aid the applicant in affording the cost of education. Since it caters to customers going for higher studies, the loans can be classified based on two parameters:

  • Location of the institute (India or abroad): There are numerous banks in the country which offer loans specifically for students who aim to study in India and for those who aim to study abroad. This distinction in the loan has been made keeping in mind the different financial needs that arise from studying in India or studying abroad.
    • Study abroad loans: Such 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.
    • Domestic loans: 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.
  • Course based loan: Many banks and NBFCs offer loans that are based on the type, of course, the applicant is going for. There are loans which are also made for studying in premier institutes like IITs and IIMs. Similarly, customers may also find loans that specifically offers financial solutions for the course their planning to pursue. Some types of course based loans are:
    • Undergraduate loans: These loans offer financial support for pursuing undergraduate degree programs.
    • Graduate or professional loans: These loans are designed for applicants who want to pursue post-graduate studies or other professional courses.
    • Career loans: Such loans help applicants pursue career-oriented programs and certification courses.

Importance of Education Loan

Education costs are on a steady rise. In such a scenario, getting an education loan helps the applicant gain access to quality education at premier institutions whether in India or abroad. Apart from the tuition fees, education loans also help the applicant with the living costs and any other study-related expenses.

Mentioned below are a few important reasons why you should opt for an education loan:

  • Easily available: Most banks in India provide education loans as a priority product. Availing education loans is comparatively less complicated as you only have to establish your repayment capacity to get approval.
  • Specialised help: Education loans take care of the additional expenses that are associated with most courses like hostel fees, library fees, etc.
  • Prevents exhaustion of resources: By opting for an education loan, the applicant or his/her parents can keep their savings intact. Such loans prevent the exhaustion of one’s savings and help them meet their financial needs comfortably.

Features and Benefits of Education Loans

  • Easy access available to everyone
  • Helps finance course in India and Abroad
  • Customizable loan amounts
  • 100% finance options available
  • Applicant’s annual family income and course opted for determining the loan amount
  • Government-sponsored subsidies available for minority students
  • The repayment period begins after the completion of the course

Who Can Apply for Education Loans

Mentioned below are the general eligibility criteria for education loans in India:

  • Must be a resident of India
  • Must have secured admission into a recognized course in India or abroad
  • NRI applicants must have a valid Indian Passport
  • Applicant must provide collateral enforceable in India

 


Documents required for Education loan

  1. Letter of admission
  2. Duly filled and signed the loan application form
  3. 2 Recent passport size photographs
  4. Pan card, Aadhar card of student and parent or guardian
  5. Proof of identity and proof of residence
  6. IT returns or IT assessment order  of the previous two years of the co-borrowers
  7. Statements of assets and liabilities of parents, guardian
  8. Proof of income of the parent, guardian