Presently pursuing a professional or a scientific education in India as well as in abroad becomes expensive and unreasonable for a common people. To overcome the hurdle faced by many parents, the education loan is given to the students.
Education loan first came into existence in the year 1995, started by State Bank of India, and afterwards, many other banks and financial institution also started to offer the loan. Today, education loan is getting popular among the students due to sky-touching fee structure of schools, colleges, and universities. But, because of the rising Non Performing Assets (NPA) on educational loans, IBA (Indian Bankers Association) revised the loan scheme that was framed in the year 2001. However, to keep the situation out of worries and concerns, banks have been suggested to be prudent and cautious while granting educational loans to students.
Education is the basic pillar of economic and social development and growth, but, unfortunately, many parents cannot afford to provide educational rights to their children due to limited income sources and hiking annual fees of the institutions. Learning is seen as one of the key aspirations of millions, it is considered as one essential investment option that an overwhelming majority of parents will agree on. Despite such a huge agreement of parents, the literacy rate in India is below the average rate, which is really disappointing. But, the good news is that over a last few years, the literacy rate of India has raised to a very good extent. Also, the state and central government launched several educational schemes and scholarship programs to encourage literacy rate.
The education loan is given to those who have enrolled in an institute for a career oriented course such as medical, engineering, management etc., at graduate or post graduate level. The support of education loan drives students desire of achieving greater heights in the respect of themselves as well as for the nation. Education loan is the right finance support at right time which indirectly leads to the success of students in academics. Moreover, an education loan removes the financial obstacles from students life and allow them to expand their base of knowledge. Knowledge is the supreme power and its above everything. According to education loan, the students get enrolled to the course and no capable students should face any difficulty in pursuing their academics or dream due to the lack of money.
Even, the RBI (Reserve Bank of India) has included education loans as important part of the priority sector lending of banks and thus, the banks are aimed to provide need-based finance to private students. This student loan is similar to any other commercial credit and it is completely banks discretion to sanction the loan or not after assessing credit eligibility and worthiness of an applicant. Thus, it is suggested to students to be prepared for commercial negotiations by thoroughly understanding the borrowing criteria and repayment of the loan after getting a job.
After taking the whole scenario into consideration, the main focus remains on reducing interest rate of education loan, increasing the moratorium period, job assurance prospects, and extended loan period terms and conditions.
1. A student should belong to an Indian national and should be of the age between 16 to 35 years. The student pursuing for masters course or the graduation and PG diplomas.
2. Confirmation of admission in a college or university recognized by Govt. or AICTE etc., such as Management, Engineering, Architecture and hospitality, Agriculture, Medical, Fine arts and design, Pure science/BA/MA/B.Com/ M.Com, Some special skill training of technical courses such as aviation as well as non-technical courses such as air-hostess are sometimes included too.
3. If you have taken a loan which is more than Rs. 7.5 Lakh then you need to give a collateral security as asked by the bank or finance providing agency.
4. A co-applicant is necessary for all full time programs. Co-applicant could be anyone as mentioned are Parent/ Guardian or Spouse (if married) / Parent-in-law (if married).
With the aid of education loan, this has given the power to students to live their dream. Now the following are the things which en education loan is covering:
1. Education loan include accommodation charges.
2. This loan covers 100% tuition fees.
3. Exam and library fees.
4. Travelling expense to abroad
5. Books and equipments including computer.
6. Other expense are also included which require to complete education.
Eligible expenses covered under student loan : Accommodation charges, annual fee, exam and library fees, travel expenses abroad, reasonable expenses for books and learning devices, and other such related expenses.
Time Required For Loan Application Approval: Bank will approve education loan application within 15 working days from the date of submission of loan application if it is complete in all respects such as filled with all personal, education details etc.
Disbursement Of Loan Amount: The education loan amount is provided after taking into account the required funds or fee schedule as assessed by the bank directly to the educational institution, equipment required vendor of books etc.
Quantum Of Loan Provided : Know the education loan amounts which can be disbursed to the students are below mentioned:
Period Of Repayment: One year or six months after getting job, whichever is earlier.
An education loan not just finances the learning expenses, but, it can also provide tax benefits under Section 80E of the Income Tax Act of India. However, there are certain conditions to avail the tax benefits and availing deductions such as:
1. Who can claim the deductions: Only an individual can claim the tax deduction. And the loan should be taken only for the higher education of self, children, or spouse.
2. From where the loan should be taken: Loan borrowed from other than registered educational institution such as friends or relatives do not qualify for the deduction
3. The purpose of the loan: The loan should be taken to pursue college or higher studies only.
4. Deduction Amount: The sum of deduction is calculated on the total interest sum of the EMI paid during the financial year.
5. Period of Deduction: The tax benefits can be enjoyed right from the repayment year for up to 8 years.
The education loan is initially started to give aid to meritorious students to pursue higher education. However, as the time passed, rules got diluted and now the loans are sanctioned to those who got admission either in technical or professional courses irrespective of the marks.
So, it indirectly viewed as the increasing financial assistance to the students, not to be repaid. Indeed education loan is a boon to meritorious students. The loans schemes which are existing in India are generally are very liberal. However loan defaulters are increasing, the students are not able to get a job within the one year after completion of their course. In other hand if the students are able to get job but are not sufficient to ensure repayments.
Now the Indian bank association has issued the stringent guidelines against education loan. The students got admission by merit based is only eligible for education loan. The students who got admission in highly rated institution will eligible for education loan. Thus reducing the non performing asset of the banks.
To meet high rising educational expenses : Student education loans are sanctioned in no time. As the annual fees of schools, colleges, universities, and even educational institutions are touching the sky, so, even after desperately wanting to study, it is not possible for everyone to pursue their desired learning courses. Thus, the expenses can be met through SBI education loan, so that, everyone gets a chance to earn literacy benefits without concerning about the rising educational expenses. A good student loan scales according to changing expenses curve that helps the student from any unexpected surprise.
Specialized help : Students can get financial help through the loan to meet all the incurred expenses such as caution deposits, building deposits, library fees, laboratory fees, sports fees, tuition fees, etc. With a comprehensive education loan, the learning courses can be better addressed without the risk of running out of money.
Easily available : A student does not has to worry about where to get the education loan because there are many private and public financial institutions that provides the loans for pursuing primary education, higher degree courses, and several diploma and certificate courses.
1. Visit applykaroo.com and click on loan section and choose education loan option.
2. Go through the features, benefits, eligibility criteria, and understand the terms and conditions of the loan.
3. Request a quote from the leading banks by filling the mandatory information about the applicant.
4. Get the quotes, compare the interest rate and sanction amount, and choose the best deal.
5. An applicant can track their online loan application status via SMS alerts and email notifications.
Basically, the loan is sanctioned to those who are or who will be pursuing in an institute for courses such as engineering, medical, management, hotel management, public relations, etc. on graduate or postgraduate levels. Thus, it is no doubt to say that education loan is the best financial support to pursue better learning courses without worrying about the high-raised learning expenses. As education is everyone's basic right, the loan provides financial back support to students who cannot afford the expenses. Knowledge is the supreme power to lead a respectful and wealthy life. Get enrolled to desired courses and forget about the highly curved expenses.
1. Letter of admission from the affiliated school, college, university, or learning institute
2. Duly filled and signed education loan application form
3. 2 colored passport size photographs
4. Estimate of annual cost of the course by the institution
5. PAN card or Adhaar card of student and parents for age proof.
6. A copy of Voter ID, Ration card, or Adhaar card for identity proof
7. A copy of Voter ID, Ration card, or electricity bill for resident proof
8. Mark sheet of the last test.
9. Proof of income of parent or guardian
10. Statement of assets and liabilities of parents or guardian
11. Bank account statement of last 6 months
12. A copy of Foreign exchange permit, in case of studying abroad.
1. Central Scheme of Interest Subsidy for Education Loan.
2. Vidyalakshmi education loan scheme.
3. Padho Pardesh Scheme
4. Dr. Ambedkar Central Sector Scheme of Interest Subsidy.
|Name of Bank/Financial Institution||Education loan schemes||Amount||Interest Rate||Repayment Tenure|
|Axis Bank||Axis Bank education loan||Rs. 50,000 to Rs. 75 lakhs||10.5% -12.5%||Up to 7 years|
|HDFC Bank||HDFC Credila education loan||Minimum Rs. 50,000 , no maximum limit||Depends on the academic and financial track record of individual applicant||Up to 12 years|
|State Bank of India||SBI Student loan scheme||
Up to Rs. 7.5 lakhs
Above Rs. 7.5 lakhs
|SBI Scholar loan scheme||Up to RS. 20 lakhs||8.40%- 10%|
|SBI Global Ed-vantage scheme||More than Rs. 20 lakhs up to Rs. 1.5 crores||10.50%|
|Punjab National Bank||
Up to Rs. 7.50 lakhs
Above Rs. 7.50 lakhs
|Up to 15 years|
Up to Rs. 7.50 lakhs
Above Rs. 7.50 lakhs
Up to Rs. 7.50 lakhs
Above Rs. 7.50 lakhs
|PNB Kaushal||Depends on the loan applicant||
|Avanse||Avanse Education loan||Minimum Rs. 50,000 , no maximum limit||Depends on the academic and financial track record of individual applicant||1-10 years|