“When writing the story of your own life. Don’t let anyone else hold the pen. Be original. Be honest and. Most of all, stay true to yourself.” -Tyra banks
Education loan is a loan in which, a loan is borrowed by students to finance their education or school/college related expenses, occurred within the country or abroad. It is a tax-free loan. This loan helps the students to get higher education at lower rates. Normally the students can get a loan for studying in India to a maximum limit of 4 lakhs without security and 10 lakhs with security.
There are three types of education loan
- Undergraduate student loans – provided to those who wants to do graduation level of studies.
- Graduate/ professional students – provided to those who wants to do their post graduation programme.
- Career education loans – provided to those who wants to learn some new skills at a higher level.
Expenses covered in education loan
- Tuition fees payable to school/college
- Examination, library or hotel charges.
- Travel expenses.
- Purchase of books, equipment or uniform.
Courses covered under education loan
Banks offer loans for students to study almost anything provided that the course and the institution are accredited by the concerned authorities or are of good repute. Students can avail of loans for the following courses.
- Undergraduate degrees/diplomas and special courses.
- Postgraduate degrees/diplomas and special courses.
- PhDs and Doctoral Programmes.
Banks also offer loans for specialized courses, training, and diplomas. Not all banks will extend finance for these courses, but an applicant can do research and find a bank that will offer them a loan especially if there is a prospect of a job or an enhancement in current employment. Some of the courses include:
- Computer certificate course
- Engineering diploma
- Certificate courses from ITI
- Data entry operator course
- Nursing/Teacher Training certificate courses and B.Ed
- Agri diploma
- Veterinary diploma
- Any job-oriented diploma or certificate course
- Degree or diplomas for aeronautics, pilot training, shipping held by recognized regulatory bodies for the purpose of employment in India or abroad
- Vocational courses run by a Government organization or department
- Courses run by State Skill Missions, State Skill Corporations, or National Skill Development Corporation.
Eligibility for education loan
The loan is provided to those students, who have taken admission in career-oriented courses, either at graduation or post-graduation level.
- Secured at least 50% marks in HSC & Graduation
- Secured admission in India or Abroad through entrance test / Merit based selection process post completion of HSC (10+2)
Documents required for education/study loan
For students seeking a loan for education within the country, they need to provide the following documents.
- Duly filled an application form.
- 2 passport size photographs.
- Graduation, Secondary School Certificate, or High School Certificate or mark sheets
- KYC documents that include ID, address, and age proof.
- Signature Proof
- Income Proof of parents or guardian
- If collateral is required, documentation for the Immovable property, FDs, etc.
For students interested in a loan to study abroad, along with above-mentioned documents, they need to provide
- A copy of a statement of marks or certificates of the last examination passed.
- Proof of admission to the university and the course
- Schedule of course expenses
- If you have received a scholarship, a copy of the scholarship letter is needed.
- A copy of Foreign Exchange permits if you have it.
- Bank account statement for last six months of the borrower, parents or guardian.
- Last 2 years’ Income Tax assessment of the borrower, parents or guardian.
- For loans with collateral, the details of security offered must be furnished. You might also be required to provide an advocate’s search and report about its marketability
- Proof of the source of margin is required.
Different interest rates provided by banks on education/ study loan
|Union Bank Of India||11.15% (Fixed (For Girls), 11.65% (For Boys))|
|IDBI Bank||9.75% – 13.25%|
|Bank Of Baroda||11.40%|
|Bank of India||12.20%|
|Axis Bank||16.10% (For Girls), 16.70%(For Boys)|
|State Bank of India||9.35% – 10.60%|
|Syndicate Bank||10.20% – 11.95%|
|Canara Bank||11.10% – 11.30%|
|Vijaya Bank||11.90% – 12.10%|
|Indian overseas Bank||10.20%|