Know About Your Education Loan:

Education loans are financial products designed to provide funding for educational expenses, including tuition fees, books, accommodation, and other related costs. These loans are specifically tailored to help students and their families manage the financial burden associated with higher education. Here are some key aspects of education loans:

Eligibility Criteria:

Students pursuing various levels of education, from undergraduate to postgraduate studies, are typically eligible.
Co-applicants, often parents or guardians, are required to meet certain eligibility criteria as well.

Loan Coverage:

Education loans cover tuition fees, examination fees, library charges, hostel charges, cost of books, equipment, and other study-related expenses.

Loan Limits:

The loan amount is determined based on the course of study, the institution’s reputation, and the overall cost of education. There are usually maximum limits set by lenders.

Repayment:

Repayment typically starts after the completion of the course or a certain moratorium period. Some lenders may offer flexible repayment options.

Interest Rates:

Interest rates for education loans can be fixed or floating, and they vary among lenders. Some banks may offer special interest rates for female students or those from economically weaker sections.

Collateral and Guarantor:

Depending on the loan amount, lenders may require collateral or a third-party guarantor. However, many education loans for smaller amounts may not require collateral.

Loan Tenure:

The repayment period varies, but it is often extended to provide flexibility to the borrower. Longer tenures may be available for larger loan amounts.

Application Process:

Applicants typically need to provide proof of admission to the educational institution, details of the course, and other relevant documents during the application process.

Government Schemes:

In many countries, governments offer schemes and subsidies to make education loans more accessible and affordable.

It’s crucial for individuals considering education loans to carefully review the terms and conditions of different lenders, including interest rates, repayment options, and any additional fees. Additionally, understanding the specific requirements and eligibility criteria is essential for a successful loan application.

FAQs

What are the courses for which an education loan can be availed?

Education loan can be availed for all courses recognized by the UGC in case of India and all regular courses abroad. Each lender has its own list of educational institutions and courses that they would provide a loan for whether overseas or within India.

Is a co-applicant for education loan needed?

Yes, for all full-time courses a co applicant is required. The co-applicant can be Parent/Guardian or Spouse (if-married).

Who can be my co-borrowers?

Your parents/ guardian can be a co-borrower as well as spouse in case of a married applicant. The co-borrower should have a steady source of income and a good credit history in order to improve the applicant’s chances of a successful loan application.

Is there a maximum limit on an education loan that a lender can disburse?

Most lenders have a maximum limit of Rs 10 lakhs to Rs 15 lakhs for studies within India, while the maximum limit on education loans for overseas studies is between Rs 20 lakhs to Rs30 lakhs. In case of some lenders, the applicant can get a higher loan amount sanctioned provided bank-accepted collateral is provided.

What is the tenure of an education loan?

The average tenure for an education loan is between 5-7 years in case of most lenders. However, some lenders can offer a longer tenure of up to 15 years in case of higher loan amounts.