Education loan | How to get student loans to study, eligibility, documents, interest rates calculator | Compare best education loans for students online
FINANCE YOUR EDUCATION ON YOUR OWN !!
Education loans or student loans are the loans to help students pay for their higher studies which includes tuition fees, money needed to buy books, or staying expenses. This loan has low interest rates and helps the students to be independent enough to take up the responsibilities for their studies.
It was earlier believed that only students whose parents couldn’t afford for their studies took education loans, but nowadays it is seen that students who belong to financially sound family are also taking education loans due to following reasons:
- Students are able to take financial responsibilities for their studies. Instead of asking their parents to pay for their higher studies, they take a loan and pay for their studies on their own. It is also beneficial because education loan has lower interest rates than other loans.
- Building good credit score: This is a great opportunity to start building a good credit score from a small age itself. This is going to beneficial in the future for all the students who take education loans and repay the loan timely.
- Preserving parents savings and assets: Applying for a education loan means that you will not be paying the fee for your studies with your parents’ money and because of this, the family assets are preserved. The money saved by the parents can be used at other places too which will be beneficial.
- No collateral or guarantee required: If you want a loan of Rs. 4,00,000 or less, it is not mandatory to provide any collateral. Though if you want a loan of more than that you need to provide collateral as well as a third party guarantee.
- Tax benefits: An education loan can also save tax. The interest paid on the education loan can be claimed as deduction under section 80E of the Income Tax Act,1961.
- Education loan is to be paid only after the completion of your studies. You have to start repaying it when you get a job or when six months are complete after leaving the college (whichever happens before). So it’s not a big deal to repay the money once you get a job.
Education Loan Eligibility Criteria
- Student should be an Indian resident
- There should be a co-applicant who can be parent/guardian or spouse or parent-in-law.
- Student should be between 16 to 35 years old.
- Student should have a good academic score
- The loan will be provided to those students only who have enrolled themselves and got admission in career oriented courses either at graduate or post graduate level.
- In case you want a loan of more than Rs. 7,50,000, a collateral security and a third party guarantee will be required.
Documents required for Education loan:
- Copy of admission letter along with the fee schedule.
- Proof of identity like voter ID card, PAN card, passport, driving license, employee ID card etc.
- Age proof.
- Signature proof.
- Residence proof like bank account statement,latest insurance premium receipt,latest electricity bill, latest telephone/mobile bill, or latest credit card statement etc.
- Mark sheets/passing certificates of secondary school and higher schools and degree certificates in case graduate.
- Bank statement/ Pass book of last six months.
How to apply:
You can either apply online or visit the nearest bank branch for the loan.
Reasons why your education loan can be rejected by the bank:
Stated here are a few factors which can decide whether your education loan application will be accepted by the bank or rejected :
- Academic performance: Performing well in studies makes it easier for the bank to trust you with their money. Having good academic score makes it easier for you to get an education loan as compared to having poor scores.
- Cibil score of parents: Cibil score is a very important factor in deciding whether you will get the loan or not. In this case not only the cibil score of the student is important,but also the cibil score of the parents.
- Income of the parents: The bank also makes sure that your parents’ income is good enough, especially when they are the co-borrowers or the co-applicants.
- Type of course: It is easier for those students to get the loan who have confirmed their admission in career oriented courses such as engineering, medical, management etc as compared to students who have enrolled themselves in courses like humanities, commerce etc.
- Age: Most of the banks prefer lending money to students with age less than 35 years. If you are elder than this, it might be difficult for you to get the loan.
- Nature of course: Students who got admission in full-time courses are more likely to get the loan as compared to the students in distance or correspondence courses.
- Reputation of the college: If you are going to a widely recognized college or a college having a good reputation, you will get the education loan quite easily.
Getting a education loan is easy,gives students a feeling of independence and also makes them responsible. So it’s a good option to apply for education loan instead of being dependent on parents for all the payments.