Education Loan: Complete info about Student Loan in India 2024
Educational loan is about to studying in abroad. It is an important part if a student want to go abroad and having the issues of low funds or low budget, then the student must choose the option of educational loan. Students can get various facilities by loan from private banks, government institutes and from other resources. Many sectors provide educational loan and aspirants enjoy the benefits after availing the education loans. In this, individuals may get to know about the procedure of educational loan, documents that are required to get educational loan, not only that it covers all other resources or details that must necessary for the approval of study loan. We will cover all the essential steps especially for those who are looking for education loan. This may proves useful for every aspirants, so, read it attentively.
Advantages of Educational Loan
There are numerous advantages of taking an educational loan from different sectors such as private or public banks and loan from any other resources. In that case, banks or any other financial sector helps to approach (NBFC`s) for loan. Education loan is helpful for those who have insufficient funds or having low finances. They can avail education loan for their child`s education. The several benefits of educational loan are as follows:
1. Approach to Education: One of the major advantages is that it enables individuals to begin higher education or professional courses that individuals may not have been able to afford otherwise. This expands approach to education and assists individuals develop skills and knowledge essential for their career advancement
2. Flexible Repayment Options: Educational loan provide offers for flexible repayments, allow borrowers to make payments after the completion of their studies or when they find a secure job. Some loans offers the grace period (If student is not eligible to pay loan they can get some extra time to clear their loan amount) to make payment after some time
3. Low Interest rates: Educational loan provide low interest rates as compared to other various types of loans, make it more affordable for long term. In addition, the interest on education loans may be tax-deductible that provide further commercial advantages to borrowers
4. Build credit History: Pay education loan timely can assist borrowers build a good credit history, which is advantageous for future finances, likewise applying for other loans
5. Investment In future earning potential: Education is an investment in an one`s future earning potential. By taking an education loan individuals give priority to their own self, with expectation that they earn skills and qualifications that will lead to higher income and career opportunities in the future
6. Opportunities for skills development: Educational loan provide the opportunity to Individuals to pursue professional courses or degrees will enhance their skills in particular fields, making individuals more competitive in the job market
7. No collateral required: Many educational loans are unsecured, meaning borrowers don`t have to put collateral such as property or assets to secure the loan. This reduces the risk for borrowers who may not have significant assets to initiate as collateral.
Things that are necessary to remember while taking an Educational loan
Before making a decision about educational loan, there are several key factors that have to be taken into consideration. The key factors that are crucial to be recognized are as written below the text:
1. Interest Rates: Understanding of interest rates are crucial that are offering by different lenders. It is necessary to compare the interest rates with different institutes, time period of payment and other such variables
2. Loan Amount: Calculate the total cost that you are required for studying in education, including tuition fees, cost of accommodation, books and other expenses. Make sure that loan amount must cover all the expenses
3. Repayment terms: It is the essential step to check the terms of repayments that involves the period of paying education loan and the cost of monthly payments. Make sure to set a balance between financial situation and your future incomes or earnings
4. Grace period: Many of the borrower don`t know about grace period, but it is crucial to check if there is a grace period after graduation before you need to start repaying the loan. This period can vary among different lenders
5. Fees and charges: Before taking a decision of loan, be aware of any fees associated with the loan, such as origination fees, prepayment penalties or any delay in making payments
6. Eligibility criteria: Understand the eligibility criteria for the study loan which include credit score requirements, and citizenships status. Make sure that you meet with all the important requirements before applying
7. Loan repayment options: Investigate the repayment options, likewise income-driven repayment plans or refinancing options. Select the best option as per financial situation and career goals
8. Impact on credit scores: It must require to have accurate understanding about how loan will affect your credit scores. Making repayments on time will support you to manage good credit scores, while any delay or late payment can damage it.
9. Financial aid and scholarships: Get financial help and scholarships from other sources of funding, likewise grants, or work-study programs, before checking for education loan. Minimization the cost of loan you borrow can reduce your long-term financial burden.
10. Future income prospects: Recognition of future earnings is the crucial part as per the field of study you choose. Consider the prominent points such as loan repayments, or salary that you expected and so on.
11. Read the fine print: It is prominent to read and understand the rules or regulations that are mentioned in the loan agreement before signing it. Give attention to all the details as such interest rate adjustments, repayment penalties and any clauses that may affect your capability to repay your loan.
Criteria for Educational Loan to study abroad
The eligibility criteria for educational loans can depend on the lending institutions and Country’s regulations. However, some common eligibility desires that include:
Student must be Indian citizen
Secured admission on the basis of merit and entrance test
Enrolled in career oriented courses (UG/PG/Diploma)
Perform good in academics and scored at least 50%
For secured loans, collateral should be required
For unsecured loans, a co-applicant must have required with strong financial background
Well-reputed university and course plays crucial rule for education loan
Document required for Education Loan
Before applying for education loan, you have required this essential documents. The following documents are required for studying in abroad:
1. Student-Applicant
Proof of Identity (Anyone):
Proof of Residence/ Address (Anyone): Passport mandatory in case of Studies Abroad
2. Academic Records
10th & 12th Result, Graduation Result- Semester-wise (if applicable)
Entrance Exam Results through which admission is being taken (e.g. CAT, CMAT, JEE, IELTS, PTE, NEET, CET, GMAT, GRE, TOEFL, etc.)
3. Proof of admission
Offer Letter or Admission Letter from the Institution, Conditional admission letters may be considered required to study abroad
Statement of cost of study/ Schedule of expenses
College/Course prospectus (if available)
2 passport-size photographs
Account statement for the last 1 year in case of any previous loan from other Banks/Lenders
Education Loan Documents for Co-Applicant/ Financial Co-Applicant/ Guarantor
4. Co-applicant/Guarantor
Proof of Identity (Anyone)
Proof of Residence/ Address (Any one)
2 passport-size photographs
Account statement for the last 1 year in case of any previous loan from other Banks/Lenders
5. Income Proof for Salaried Co-applicant/ Guarantor
Salary Slip or Salary Certificate
Copy of Form 16 and IT Returns acknowledged by IT Dept.
Bank account statement for last 6 months (of Salary Account)
6. 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 the last 6 months
Property /Other Security Documents
Interest rate from different banks
The interest rate may depend on the various factors as such applicant`s credit profile, loan amount and so on. Additionally, there are plethora of banks or financial institutes in India that offer study loan on their own set of interest rates. Here are the list of some essential banks with interest rates:
Note: The Interest Rates are flexible and are subject to change as per the banking statements. It is mandatory to check updated information while applying for education loan.
Process for applying education loan
From lodging loan application to the approval of loan the whole process is time-consuming, so apply your loan before time. There are some crucial steps written below the text to apply for education loan:
Make sure to check the programs in which you are going to study is recognized by the banks or not
Figure out how much loan amount you require and how much amount you are going to arrange on yourself
Compare the student loan provided by different banks for studying abroad and go for the one that fits best as per your needs
Afterward you finalized the bank and the loan amount, fill out the loan application form and approach to your bank
As soon as your loan is approved, the bank will issue a loan document that includes several resources for the loan
As you signing the loan document, the bank will send the amount in instalments or according to the university instructions.
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