INR
Education Loan Features
Pre Admission Sanction
Maximum Loan Repayment Tenure
Tax Benefit U/s 80 (E)
Education Loan - Benefits
Avail high value loans
Before applying for the loan, prepare a business plan, know your credit score, decide the loan amount, do some market research on available business loan options, and keep the documents ready.
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Pre Admission Sanction
Applicants should be aged between 21 to 65 years, having business vintage of a minimum of 3 years. The minimum business turnover and a minimum annual turnover as per the ITR will be required. The business should be profit-making for at least the last 1 year.
Features and Benefits of our Education Loan :
- Flexible Financing: Cover tuition fees, living costs, and more.
- Wide Course Range:Available for various courses and institutions.
- Affordable Rates:Competitive interest rates for cost-effective borrowing.
- Moratorium Period:Repayment starts after course completion.
- Collateral Options: Choose between Collateral and Non-Collateral Loans.
- Co-borrower Support: Parents can enhance eligibility as co-borrowers.
- Tax Benefits:Possible tax deductions on interest repayment.
- Convenient Application: Apply online for a hassle-free experience.
- Direct Disbursement: Funds disbursed directly to the institution.
- Tailored Repayment: Flexible repayment options, including EMIs.
- Inclusive Eligibility: Open to Indian residents, NRIs, and some foreign nationals.
- Future Studies Covered: Loans might include funding for further courses.
- Added Value:Some lenders offer insurance and career support.
Eligibility Criteria
Education loan eligibility criteria can vary depending on the country of study, the lender, and the type of loan you're applying for. However in a general overview the factors that often influence education loan eligibility are:
Age:
Most lenders have a minimum and maximum age requirement for loan applicants. Typically, you need to be of legal age (18 or older) to apply for a loan.
Course/Program Eligibility:
Education loans are often tied to specific educational programs or courses. Lenders may have a list of eligible institutions and programs that qualify for loans.
Admission Offer:
Many lenders require proof of admission to an eligible educational institution before approving a loan application.
Academic Performance:
Some lenders might consider your academic performance as part of the eligibility criteria. This could include factors like your high school or previous education grades.
Co-borrower or Guarantor:
If you have limited credit history or income, some lenders might require a co-borrower or guarantor (usually a parent or guardian) who will share the responsibility of repaying the loan if you are unable to do so.
Credit History:
Student's as well as their co-borrower/guarantor's credit history and credit score can play a significant role in determining your eligibility for an education loan. A good credit history can improve your chances of approval and may lead to more favorable loan terms.
Income/Financial Ability:
Some lenders may consider your ability to repay the loan based on your income or your co-borrower's income.
Loan Amount:
The loan amount you're requesting in relation to the cost of the program might affect your eligibility. Lenders may have specific limits on the loan amount they are willing to offer.
Collateral or Security:
In some cases, lenders might require collateral or security against the loan, especially for larger loan amounts. This could be in the form of property, investments, or other valuable assets.
Documentation:
You will likely need to provide various documents as part of your loan application, such as proof of identity, proof of admission, income documents, and more.
Documents Required to Apply for Education Loan
You will likely need to provide various documents as part of your loan application, such as proof of identity, proof of admission, income documents, and more for both Student as well as the Guarantor or co-borrower.
I. Student-Applicant:
Proof of Identity (Any one):Pan/Adhar/Passports etc
Proof of Residence/ Address (Any one):Passport mandatory in case of Studies Abroad
Academic Records:10th Result & 12th Result, Graduation Result- Semester-wise (if applicable) Entrance Exam Result through which admission is being taken (e.g. CAT, CMAT, JEE, NEET, CET, GMAT, GRE, TOEFL, etc.)
Proof of admission:Offer Letter or Admission Letter from the Institution. Conditional admission letter may be considered in case of studies abroad.
- Statement of cost of study/ Schedule of expenses
- College / Course prospectus (if available)
- 2 passport-size photographs
- A/C statement for last 1 year in case of any previous loan from other Banks/Lenders
- Education Loan Documents for Co-Applicant/ Financial Co-Applicant/ Guarantor
II. Co-applicant/Guarantor:
- Proof of Identity (Any one):
- Proof of Residence/ Address (Any one):
- 2 passport-size photographs
- A/C statement for last 1 year in case of any previous loan from other Banks/Lenders
III. Income Proof for Salaried Co-applicant/ Guarantor:
- Salary Slip or Salary Certificat:
- Copy of Form 16 and IT Returns acknowledged by IT Dept.
- Bank account statement for last 6 months (of Salary Account)
IV. Income Proof for Self-employed Co-applicant/ Guarantor::
- Business address proof (If applicable)
- IT Returns acknowledged by IT Dept., TDS Certificate (Form 16A, if applicable)
- Bank account statement for last 6 months
Fees and Charges for Education Loan
The fees and charges of education loans usually vary from lender to lender and from case to case. The aforementioned table will give you a fair idea of the fees and charges related to education loans:
| Particulars | Charges |
|---|---|
| Loan Processing Fees | 0.5% to 4% of Loan Amount |
| Loan Cancellation | Usually around Rs 3,000 |
| Stamp Duty Charges | As per actuals |
| Legal Fees | As per actuals |
| Penal Charges | Usually @ 2% per month; 24% p.a. |
| EMI / Cheque Bonus | Around Rs 400 per bounce |
Other fees and charges that lenders may levy on your personal loan include documentation charges, verification charges, duplicate statement charges, NOC certificate charges and swap.
Business Loan FAQs
What is an education loan?
An education loan is a type of loan designed to help students and their families finance the cost of higher education. This loan covers expenses such as tuition fees, books, accommodation, and other related costs. The loan amount is typically disbursed directly to the educational institution. Students can repay the loan after completing their education, often with a grace period. Education loans can be offered by banks, financial institutions, and government schemes, and they may have different terms and conditions depending on the lender.
Who is eligible for an education loan?
To be eligible for an education loan, applicants typically need to be within a certain age range, have a good academic record, be enrolled in a recognized educational institution for an eligible course, and have a co-applicant, often a parent or guardian. Financial stability and creditworthiness are also important factors, and the course and institution should be recognized by relevant authorities. Each lender may have specific eligibility criteria, so it's advisable to check with them for details.
What is a moratorium period?
A moratorium period for an education loan is a specified period during which the borrower is not required to make any repayment towards the principal amount but only the interest portion of the loan. This period usually starts from the disbursement of the loan and ends after the completion of the course or a few months after the student secures employment, whichever is earlier. The purpose of the moratorium period is to provide students with a grace period to focus on their education and secure a job before they start repaying the loan.
When does repayment start after the moratorium period?
Repayment of an education loan typically starts after the moratorium period ends. The exact timing can vary depending on the lender and the terms of the loan agreement. In most cases, repayment begins either immediately after the moratorium period ends or after a specified grace period, such as six months to a year. It's important to check the terms of your loan agreement to understand when exactly you are required to start repaying the loan.
What are the repayment options?
In education loans, repayment options typically include Equated Monthly Installments (EMIs) after a moratorium period, step-up or step-down EMIs based on expected income changes, interest-only payments during the moratorium period, and bullet repayment where the entire principal and interest are paid at the end. Borrowers can choose the option that best fits their financial situation and repayment capacity.
Can I prepay my education loan?
Yes, you can typically prepay your education loan either in part or in full. Prepayment allows you to pay off the loan before the end of the loan tenure. Some lenders may charge a prepayment penalty or fee for early repayment, so it's advisable to check with your lender regarding their prepayment policies.
How do I start repaying my education loan?
To start repaying your education loan, review your loan agreement for the repayment schedule and EMI amount. Set up a bank account for payments and calculate your EMI based on the loan terms. You can then start making payments either manually or through automatic deductions as per the repayment schedule.
Is there a tax benefit for education loan repayment?
Yes, there is a tax benefit for education loan repayment in India under Section 80E of the Income Tax Act. According to this section, the interest paid on an education loan for higher education is eligible for deduction from the total taxable income. The deduction is available for a maximum of 8 years or until the interest is fully repaid, whichever is earlier. The benefit is available for loans taken for the taxpayer, spouse, children, or for a student for whom the taxpayer is a legal guardian.
What happens if I miss loan payments?
If you miss education loan payments, you may incur late fees, damage your credit score, face default and legal action from the lender, and potentially involve your cosigner in repayment. Communicating with your lender about payment difficulties is crucial to explore options and avoid default.
Can I change my repayment plan later?
Yes, you may be able to change your repayment plan for an education loan later, depending on the lender's policies and the terms of your loan agreement. Some common options for changing your repayment plan include switching from a standard repayment plan to an income-driven repayment plan, extending the loan term to lower your monthly payments, or choosing a different repayment schedule. It's advisable to contact your lender to discuss your options and determine if changing your repayment plan is possible and beneficial for your financial situation.
Can international students get education loans?
Yes, international students can get education loans to study abroad, but they may need a co-signer who is a resident or citizen of the country where the loan is being obtained. Requirements vary by lender and country, so it's best to research available options and eligibility criteria.
Do I need a co-borrower or guarantor?
Yes, you may need a co-borrower or guarantor for an education loan, especially if you are a student or have a limited credit history. A co-borrower or guarantor provides additional assurance to the lender that the loan will be repaid in case you are unable to do so. The specific requirements for a co-borrower or guarantor can vary depending on the lender and your individual circumstances. It's advisable to check with the lender regarding their specific requirements for co-borrowers or guarantors when applying for an education loan.
How do I apply for an education loan?
To apply for an education loan, research lenders and compare options, check eligibility criteria, gather required documents, fill out the application form accurately, and submit it along with the documents to the lender. After verification and approval, the loan amount will be disbursed directly to the educational institution. Repayment usually starts after the moratorium period ends.
What is the maximum loan amount I can get?
The maximum loan amount for an education loan varies depending on the lender, course, and your financial situation. Lenders typically offer loans covering up to 100% of tuition fees and related expenses, but the actual amount depends on factors like course fees and your ability to repay.
What is the documentation required to take an education loan?
To apply for an education loan, you typically need to provide proof of identity (such as a passport or Aadhaar card), proof of address (such as a utility bill), proof of admission to the educational institution, course fee details, academic records, and income proof of the co-borrower or guarantor, if applicable. Additional documents may be required based on the lender's requirements. It's advisable to check with the lender for the specific documentation needed for your education loan application.
When is the most suitable time to apply for an Education Loan?
The most suitable time to apply for an education loan is after securing admission to the educational institution. Applying early allows for timely processing and disbursement of the loan amount.
Are NRIs eligible for education loans from banks in India?
Yes, Non-Resident Indians (NRIs) are eligible for education loans from banks in India, subject to certain conditions. NRIs may need to provide additional documents such as a valid passport, visa, and proof of NRI status. Additionally, they may be required to have a co-borrower or guarantor who is a resident of India. The specific eligibility criteria and terms can vary among lenders, so it's advisable to check with the bank for their requirements.
