Education loan is the financial aid offered by the bank or the loan providers to the candidates who are willing to pursue technical, educational, or other courses abroad. The loan provider allows students to repay the loan after completion of the course and a period of six months is also provided as a grace period until the candidate gets a job.
Education loans act as a financial lifeline, covering a wide range of expenses including tuition fees, hostel charges, travel costs, insurance premiums, and more. With loan amounts extending up to Rs.1 crore and a flexible repayment tenure of 15 years, students receive substantial support throughout their academic journeys.
Additionally, tax benefits under Section 80E of the Income Tax Act provide relief through deductions on the interest paid.
These loans extend beyond traditional academic paths, including undergraduate, postgraduate, vocational training, and skill development courses. Eligibility criteria encompass enrollment in recognized institutions, completion of 10+2 or a degree, among other factors.
The application process, available through online and offline channels, requires essential documentation such as admission letters and academic records.
An Education Loan EMI Calculator aids borrowers in estimating monthly repayments, providing insights into the holistic loan cost. The repayment journey, often commencing 12 months after course completion, offers flexibility through various modes like internet banking, cheques, direct debit, and demand drafts.
Lenders, acknowledging the significance of education, adopt a holistic approach in approving loans, considering factors such as the chosen course, institute, loan amount, academic performance, family's repayment capacity, assets, and annual income.
In essence, these education loans create a supportive framework, alleviating financial constraints on students' educational endeavors.
Here is an indicative list of documents that most lenders ask for:
Yes, the Reserve Bank of India's moratorium on retail loans, due to people undergoing financial challenges due to the Covid-19 pandemic, is applicable to education loans as well. The moratorium on Equated Monthly Instalments (EMIs) could be availed from March 2020 to August 2020.
No, an interest rate will be levied by banks on education loans.
No, usually education loans for courses in India do not offer the same amount as for comparable level courses abroad. Education loans offer higher amounts for courses abroad as fees and other expenses may be higher there than for courses in India (which also depends on the educational institution).
For courses abroad, education loans are typically paid directly to the educational institution in the local currency of that country.
If you choose to discontinue the course mid-way, you must start repaying the loan immediately after getting a job.
Yes, you can move your education loan from one bank to another. However, your current bank might charge a refinance fee. Therefore, it is important to consider all factors of the existing bank and the new bank before moving the loan.
