Education loans help many students finance their higher education. Banks and other financial institutions provide education loans to students to help them cover their education expenses, including tuition, fees, and books.
Educational loans can be used to cover study-related expenses. Students take a specific amount of loan and have to repay it with interest after completing their degree.
Almost all banks in India offer education loans. There are slight differences in the interest rates on education loans from bank to bank. Post-PUC degree courses and higher education courses usually have higher fees and other expenses. Not everyone can afford the high fees. Then you can get an education loan. The amount required to complete the course is taken in the form of an education loan and paid after the course is completed.
There are several factors to consider when applying for an education loan. For example, the type of institution you are studying in, the course you have chosen, your financial situation, etc. It is important to look at the different loan options and the interest rates before making a final decision.
Types of Loans
Domestic education loans are provided to those pursuing education within the country and foreign education loans are provided to those pursuing further education abroad. Of course, since the cost of education is higher for those studying abroad, the loan amount is also higher. At the same time, education loans are provided on the basis of undergraduate courses and postgraduate degrees.
To apply for an education loan, you need to submit certain documents to the bank.
- Completed application form
- Identity proof (Aadhaar card, PAN card)
- Residence proof (Voter ID card, Aadhaar card)
- Admission proof (Acceptance letter from the educational institution)
- Statement of education expenses (to be obtained from the educational institution)
- Other documents as specified by the respective bank
What is the interest rate?
The interest rate varies from bank to bank. Generally, most banks charge an interest rate of more than 9 percent.
What is the amount of an educational loan? What are the repayment terms?
Banks can lend up to Rs. 1 crore for international students and up to Rs. 50 lakh for domestic students. This also includes items like laptops and cameras that students buy for educational purposes. Parents must be joint borrowers for an education loan.
The loan has to be repaid after the completion of the respective course. The loan does not have to be repaid while doing the course. Usually, there is a loan moratorium period of 6 months to 1 year after the completion of the course. This means that the loan does not have to be repaid during this period. This period is considered as a time for the student to find a job. The respective banks inform about this period. The loan along with interest has to be repaid immediately after that period.