Educational Loans

A coveted degree from a reputed institute may well be the dream of many a student. Securing such a degree may not be within the reach of many. Good education can be expensive, but cost alone should not stop a deserving student from pursuing his/her education. Educational costs include college fees, books, tuition fees, accommodation, etc. Until a few years ago higher education and education through premier institutes were so expensive that some deserving students had to terminate their educational dreams abruptly and get into the job market

Growing number of banks and financial institutions has changed the situation for such deserving students. If cost of the education is the only factor hindering your admission into a college, then you can consider educational loans and various student loan options to meet your educational expenses. Look for easy and convenient re-payment schemes.

What is an educational loan?

Educational loan is granted to a student to pursue his/her education in an institution of his/her choice to meet educational expenses. Educational loan is just like any other loan and can be borrowed from a bank or a private financial lender. The loan amount borrowed has to be repaid with interest after a stipulated period.

• The main feature of an educational loan is the hassle free re-payment and processing.
  
• A minimal qualification is adequate for a student to seek a loan.
  
  
  • Application procedures are a lot simpler when compared with other loans.
    
  • A loan amount of Rs. 7.5 lakhs to 10 lakhs for studies in India and Rs. 15 lakhs to 20 lakhs for studies abroad is granted depending on the student.
    
  • The lender understands the prime focus of the student is his/her studies and therefore offers flexible re-payment options. In fact most of the institutions allow the student to repay the loan six months after securing a job.
    
  • Educational loans charge a low rate of interest when compared to other loans. For loans up to 4 Lakhs the interest rate is PLR (Primary Lending Rate) and for loans above 4 Lakhs the interest rate is PLR+1.
    
  • Repayment period for educational loans is between 5 and 7 years. Repayment begins 1 year after completion of the course or 6 months after securing a job, whichever is earlier.
    
  • Tax benefits are obtainable under Sec 80E of the IT act.
    
  • Educational loans are designed to meet the specific need of each student, thereby catering to their needs in the best possible way.
    

• Should be Indian national.
  
• Age of the loan applicant should be between 16 and 35 years.
  
• Should have a good academic record consistently.
  
• Course of study should be graduation, post graduation or diploma.
• Course of study and institution should be recognized by the University / Central government and /or State government.
  
• For loans exceeding 7 lakhs collateral is compulsory.
  

Expenses covered by an educational loan

Educational loans cover not just the cost of the educational course but also cover few other charges incurred while undergoing the course.

• Hostel fees
  
• College fees
  
• Examination fees
  
• Library fees
  
• Lab fees
  
• Purchase of textbooks, uniforms, equipment and instruments.
  
• Purchase of computers that is essential to complete the course.
  
• Study tour, thesis and project work expenses if any.
  
• Travel expenses.
  
• Expenses for passage if opting to study abroad.
  
• Caution deposits, building funds, any refundable deposit supported by receipts.
  
• Few banks provide coverage for two-wheeler purchase too.
  

Rate of interest, Margin amount, and security requirements change from time to time, should be confirmed with the bank.

• Passport size photograph
  
• Proof of address
  
• Proof of age
  
• Loan application as per the bank's format
  
• Proof of marks for the last qualifying examination
  
• Prospectus and fee structure of the course fee
  
• Letter of admission for the course opted from the concerned university/school
  
• If planning to go abroad for studies, copy of passport and visa
  
• Bank statement of the borrower for the last six months
  
• Parents asset and liability details
  
• Income tax assessment orders for the last two years
  
• Income proof