Education loan in India, How to avail?
Easy Education Loan, know How Banks process education loans, Formalities, Documents, Read full article
Education Loan: Higher education in India as well as out of India has become so costly that every student is seeking an education loan. Whether it’s a degree or diploma, the expenses of pursuing higher study are so high that not everyone can bear it from their own pocket.
Education loans in India are available to study a diploma, a degree or certificate courses. Education loans for studying abroad are also given for pursuing a degree or diploma course.
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The major players in the segment are public sector banks. One can directly apply or can register at vidyalakshmi portal (Official link to Government portal) which is designed by Government of India for monitoring education loan applications at banks. One can find all the documents required and a list of banks which are lending education loans.
Generally education loans can be applied after selection of college and counselling.
There are two types of loans which are provided by banks –
- Education loan for studying in India.
- Education loan for studying abroad.
Education loan to study in India –
To avail a loan to study in India, either you have to go through a counselling process from AICTE approved college/ recognized university/ approved course for certificate courses or you have to opt in for management quota i.e. when you are taking admission without qualifying in entrance exam or meritorious quota.
The major difference between management quota and meritorious quota is security to the course.
Generally, banks are financing loans for tuition fee of the course, books required to pursue the course, technical equipment like computer etc. lodging and travelling expenses, food expenses, dress, security to be deposited, laboratory fees etc. This may differ bank to bank.
If a student is eligible for scholarship and he/ she is opting for an education loan, then banks ask for depositing the scholarship to the loan account till loan is not completed.
The basic documents which are necessary to avail an education loan –
- KYC documents of the student and guardian,
- Recent Photographs of student and guardian,
- Previous year marksheets and certificates of the student,
- Admission letter from the college in which student is going to study,
- Fee Structure of the course to be pursued,
- Details of course, bonafide letter, entrance exam qualification letter,
- Income related documents of guardian
- If security is provided against the loan, then documents related to security.
Generally loans up to Rs. 4 lakhs are collateral free and you don’t have to provide any security to avail a loan, but if loan amount goes higher or it is necessary to provide security to the loan, banks accept residential properties, gold jewelry, LI bond, Fixed Deposits etc.
Some reputed colleges/ institutes like IIMs, IITs etc. have tied up with banks to get security free and early processing of loans.
Education loan to study abroad –
The process of availing education loans for study abroad is a little more complicated than loans to study in India. The student must have a valid passport, Visa, permit to study in the foreign country, required knowledge of language and security to the loan. Rest of the process and documents are almost similar as above.
Repayment of education loan –
The repayment of education loan starts after six months of completion of course or after you get an employment whichever is earlier. The loan is to be repaid in monthly installments. However, it is allowed to repay the loan in between the course period but it’s not mandatory. However it is always beneficial to repay the principal amount as early as you can as the burden of interest at a later stage will be less.
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Links to some important websites are here under –
- https://www.ugc.ac.in/page/educational-loan.aspx
- https://rbi.org.in/Scripts/bs_viewcontent.aspx?Id=3998
- https://www.vidyalakshmi.co.in/
- https://web.umang.gov.in/landing/department/vidya-lakshmi-portal.html
- https://www.education.gov.in/en/
- https://nbcfdc.gov.in/loan-scheme-description/4/en
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