Due to the cost of education in higher education in India, student loans in India, has became a very popular method for funding education. Due to the increase of higher education colleges in fields of engineering, management, medicine etc… there was the increase in the fees. Some years back quality higher education was not affordable to all the students. The boom in the banking sectors, made release of big funds and education loans. Today education loans are very easy to get from various banks in India.
Many nationalized banks have come up with various educational loan schemes that students can benefit from. Even private banks are not lagging far behind. The wave of change could be well gauged from the amusing situation that immediately after the results announcements of CAT or PMT/ IIT JEE, the representatives of the banks queue up for giving education loans to the successful candidate even with very flexible conditions. This scenario is certainly helping the illustrious students to pursue higher education and realize their dreams.
An education loan covers cost of the college fee, hostel fee, examination fee, laboratory fee, library fee, and cost of books and stationery. Apart from this, any other expense required to complete the course can also be considered. The maximum amount of education loan is up to Rs. 7.50 lakh in case of studies in India and Rs 15 lakhs for studying abroad. The sum of money offered is against a third-party guarantee. The third-party guarantee can come from an uncle, neighbor or friend standing guarantee for the full amount of the loan.
On an average, an education loan has to be repaid over a period of 5 to 7 years, with the provision of a grace period of one year after completion of studies. The loan money has to be repaid within 84 months in equated monthly installments (EMIs), commencing 12 months after course completion or 6 months after getting the job, whichever is earlier. In case of overseas study loan of 7 lakhs or above, the sum of money is usually given against fixed deposits, NSC certificates and property worth the loan amount.
- The courses elgigble for education loan are School education including plus 2 stage, Graduation courses, Post Graduation courses, Professional courses, Certificate courses, Courses like ICWA, CA, CFA etc, Courses conducted by IIM, IIT,IISc,XLRI,NIFT ETC, Courses offered in India by reputed foreign universities, Other courses leading to diploma /degree etc. conducted by colleges/universities approved by UGC /Govt. /AICTE /AIBMS /ICMR etc
- One can also get loans for studying abroad from a reputed university
- The rate of interest for education loan differs from one bank to the other. It usually varies from 9 to 15 percent.
- Apart from the fee of the course, other expenses are also covered by education loans. However, the list depends upon the bank from which you are taking the loan.
- Education loan can be offered at fixed as well as floating interest rate. The interest is usually charged on a daily or monthly reducing balance.
- Generally, nationalized banks have been seen to offer variable interest rates, while private and foreign banks charged fixed interest rates on education loans.
- While applying for education loan, you will have to pay a percentage of the loan amount, as processing fee.
- In most of the cases, the entire fee for a course is not financed by the bank. A certain proportion, called margin, has to be paid by the applicant. The margin requirements on education loans are not very rigid, with the average being 5 percent for studying in India and 15 per cent for abroad.
- Normally there is no need for security upto Rs 2 Lakh, But above that, Collateral security equal to 100 % of the loan Amount is needed
- The applicant should be with Indian nationality.
- The applicant should have scored minimum 60% (50% for SC/STs) in the qualifying Examination for admission to graduation courses.
- The applicant must have secured admission to a course, through entrance test/selection process
- The applicant should be around 16-26 years of age or range specified by the bank.
- The applicant should not be a minor.
- The applicant should have a good academic background.
- The applicant should have parents or guardians with stable income.
- The applicant should have got admission in a recognized university/college in India or abroad.
- Copy of mark sheets/degree certificates of previous academic qualifications.
- Proof of admission to the course
- Schedule of expenses for the course
- Copies of letter confirming scholarship, if any
- Copies of foreign exchange permit, if applicable
- 2 passport size photographs
- Details/statements of Bank accounts held by the student applicant/co-obligant(s)/guarantors (if any) for the last six months.
- Copy of Passport/Visa, cost of air fare (documentary detail) in case of studies abroad.
- Statement of Bank account for the last six months of borrower/parents
- Income proof/latest income tax return of parents/co-obligants, guarantors.
- Brief statement of assets and liabilities of borrower/parents
- If not an existing bank customer, Proof of Identity and Residence
- Passport size photo of the applicant and guarantors.
- Attested copies of documents for proof of age/date of birth and proof of residential address.
Here, we have tried to list the name of banks and the details about various educational loans provided by them.