This document provides an overview of education loans in India. It defines education loans and outlines their purpose of helping students pay for higher education costs. It discusses eligibility criteria, documents required, expenses covered, loan amounts and interest rates. It also analyzes trends in education loan disbursal and non-performing assets. Key factors to consider when choosing an education loan like interest rates, repayment periods and security requirements are also summarized. The conclusion emphasizes the importance of education loans while advising students to carefully compare loan options.
RBI guidelines stipulate that every meritorious student should be given access to better education. Accordingly banks are now offering educational loans for courses in India and abroad. The only eligibility is that the student should have secured admission through an entrance test or other such selection exams. The amount of loan a student can take is Rs 7.5 lakh for education in India and Rs 13 lakhs for education abroad. University fees, caution deposit, library fee among others become eligible for a loan advance. This type of loan has to be repaid within 1 year after the conclusion of the course.
RBI guidelines stipulate that every meritorious student should be given access to better education. Accordingly banks are now offering educational loans for courses in India and abroad. The only eligibility is that the student should have secured admission through an entrance test or other such selection exams. The amount of loan a student can take is Rs 7.5 lakh for education in India and Rs 13 lakhs for education abroad. University fees, caution deposit, library fee among others become eligible for a loan advance. This type of loan has to be repaid within 1 year after the conclusion of the course.
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Gold Loans have many admirers in our expanse because even when they avail a loan in its credit, the asset remains in their possession. Another reason why gold loan is preferred to other loans is the quickness in its processing. Instant gold loans help the customers with immediately meeting their financial concerns.
Vehicle loans are given for both used as well as own vehicles. However, if the loan is being taken for used vehicle then it is mandatory that it is not more than five years old. Although some banks provide 100% finance, however financing 80% of the vehicle value is usually the norm. The main security for this type of loan is the vehicle itself. However, getting the vehicles fully insured is the most important factor that banks consider before giving vehicle loans.
Need an education loan to fund your abroad studies? Avanse provides education loan for students planning for their higher studies abroad. To know more visit : http://www.avanse.com/studying-abroad/
What is Loan?
How Loan works ?
Why Loan is required ?
What are the problems salesperson facing in Auto Loan ?
What are the customer problems which are interested in Auto Loan?
How to make customers buying decision easier by Auto Loan?
Gold Loans have many admirers in our expanse because even when they avail a loan in its credit, the asset remains in their possession. Another reason why gold loan is preferred to other loans is the quickness in its processing. Instant gold loans help the customers with immediately meeting their financial concerns.
Vehicle loans are given for both used as well as own vehicles. However, if the loan is being taken for used vehicle then it is mandatory that it is not more than five years old. Although some banks provide 100% finance, however financing 80% of the vehicle value is usually the norm. The main security for this type of loan is the vehicle itself. However, getting the vehicles fully insured is the most important factor that banks consider before giving vehicle loans.
Need an education loan to fund your abroad studies? Avanse provides education loan for students planning for their higher studies abroad. To know more visit : http://www.avanse.com/studying-abroad/
Education Loan in India : A financial boon for studentsRahul Singh
There are banks that charge minimal processing fees or give special extra concession to girl students, for instance does not charge any processing fees for Education Loan in India to student’s studying within India but for students pursuing loans for abroad studies.
Higher education can be a costly affair. With the increasing cost of tuition and living expenses, many students are left with no choice but to take out an education loan to fund their studies. Education loans can help you achieve your educational goals while still managing your financial responsibilities. But before taking out an education loan, it's important to understand the loan process and what you should look for in a loan provider so that you get the best terms possible. In this blog post, we'll discuss the basics of getting an education loan and how you can ensure you secure the best deal for your higher studies.
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Introduction
For many students, taking out a loan for their education is the only way to finance their higher studies. But with so many different options available, it can be difficult to know which one is right for you. In this blog post, we'll explore the different types of education loans available and help you decide which one is best for your needs. We'll also provide some tips on how to manage your loan repayments and keep your debt under control.
What is an Education Loan?
An education loan is a sum of money borrowed from a financial institution to pay for educational expenses. It is also known as a student loan or a student financial aid.
The purpose of an education loan is to help students meet the costs of their higher education, such as tuition fees, books, and living expenses. Education loans are available from a variety of sources, including banks, credit unions, and private lenders.
Most education loans must be repaid with interest. The terms of repayment vary depending on the lender, but typically include a grace period after graduation during which repayment can be deferred.
Education loans are an important source of funding for many students, but they should be used responsibly. Borrowers should only borrow the amount they need and make sure they understand the terms of their loan before signing any paperwork.
Who Can Apply for an Education Loan?
Education loans are available for Indian citizens who wish to pursue higher education in India or abroad. The loan can be availed for full-time courses like regular/correspondence degree/diploma courses, post-graduate degree/diploma courses, executive management programs etc. Part-time courses like CAs, ICWAs, company secretaries etc. are also covered under education loans. Loans can also be availed for pursuing higher education through correspondence or distance learning provided the course is approved by AICTE/UGC/DEC/Government etc.
The main criteria for eligibility for an education loan are:
-The applicant should be an Indian citizen.
-For loans up to Rs 4 lakhs, the age limit is 35 years and for loans above Rs 4 lakhs, the age limit is 40 years.
-The applicant should have secured admission to a full time course in an institute which has been recognised by the government or any other statutory body.
-Courses offered by Open University or Distance Education institutions approved by DEC, UGC, AICTE etc are eligible under the scheme.
-Applicants should have a regular source of income to repay the loan amount within the specified period of time.
Types of Education Loans
There are two main types of education loans: federal and private.
Federal student loans are issued by the government and typically have lower interest rates than private student loans. They also may offer more flexible repayment terms. The four main types of federal student loans are Direct Subsidized Loans, Direct Unsubsidized Loans, PLUS Loans, and Perkins Loans.
Private student loans are issued by banks,
Taking an education loan for abroad studies is a difficult choice to make. This guide will tell you how an education loan can help, what’s the right amount to borrow, what types of loans are there, and much more. Read on!
Detailed presentation on education loan system in India- eligibility criteria, application process, rate of interest charged and repayment options. Advantages and disadvantages of borrowing loan.
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On the academic front, banks require that a student should have cleared all relevant exams and secured admission to a university. This is a prerequisite for education loan eligibility. Additionally, banks also check to ensure that the applicant has maintained a good and steady academic record. For instance, they might check the student’s SSC and HSC marks to ensure that they scored a minimum of 50% in each. A constant record is reassuring proof that the student will go abroad and continue the effort and be more likely to pay the loan back.
How can I Get an Education Loan of 4 Lakhs?Mahesh Bane
Securing financial support for higher education is a common concern for many aspiring students, and one viable option is an education loan. If you want to get a 4 lakh rupees loan to fund your further education, you're not alone. Education loans serve as a crucial lifeline for those seeking to bridge the financial gap between educational aspirations and economic constraints. This type of financial aid is designed to cover tuition fees, accommodation costs, and other related expenses, ensuring that financial limitations do not hinder one's educational pursuits. Understanding the nuances of acquiring a 4 lakh rupees education loan involves navigating through eligibility criteria, documentation requirements, and the application process. Here, we will explore the essential steps and considerations to help you navigate the intricacies of securing a 4 lakh rupees education loan, empowering you to embark on your academic journey with financial confidence.
Study loan : Some Frequently Asked Questions About Education Loan In IndiaRahul Singh
People often have few doubts before or after taking education loan| study loan in India. Here are answers to some common questions that people have with regard to student loan. To know More Visit : http://www.avanse.com/avanse-education-loans/
Student Loan in SBI is a term loan. And, this loan is granted to Indian Nationals for pursuing higher education in India or abroad. Where they have secured admission.
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2. TO BE COVERED :
What are education loans?
Education loan scheme study by IBA
Factors of education loan
Analysis of banks providing education loans
Education loans becoming NPA’s
Advantages and Disadvantages of Education Loans
Factors to be considered while choosing education loan
Conclusion
3. WHAT ARE EDUCATION LOANS?
Education is central to the Human Resources Development and
empowerment in any country.
The scope of education has widened both in India and abroad
covering new courses in diversified areas.
Development of human capital is a national priority and it should be
the endeavor of all that no deserving student is denied opportunity
to pursue higher education for want of financial support.
An education loan is a type of loan designed to help students pay
for post-secondary education and the associated fees, such
as tuition, books and supplies, and living expenses.
It came into existence in 1995 started by SBI Bank and after that
many banks started offering student loan.
4. Education loan scheme study by IBA
The Finance Minister in a meeting with the Chief Executives of the
public sector banks on 13 June 2000 had highlighted the role of
commercial banks in facilitating pursuit of higher education by poor,
but meritorious students.
In pursuance thereof, the Indian Banks’Association constituted a
Study Group under the chairmanship of Shri R. J. Kamath, Chairman
& Managing Director of Canara Bank to examine the issue in detail.
Based on the recommendations of the Study Group, a
comprehensive model educational loan scheme was prepared by the
Indian Banks’Association for adoption by all banks.
The Scheme aims at providing financial support from the banking
system to meritorious students for pursuing higher education.
The scheme was announced in the Union Budget for 2001-2002 &
discussed in the meeting the Finance Minister had with the Chief
Executives of banks on 7 April 2001.
6. Should be an Indian National Secured admission to professional/
technical courses through Entrance Test/ Selection process.
Secured admission to foreign university/ Institutions.
Should have scored minimum 60% (50% for SC/STs) in the
qualifying examination for admission to graduation courses.
ELIGIBILITY CRITERIA:
7. COURSES ELIGIBLE IN INDIA AND IN ABROAD :
Studies abroad :
Graduation : For job oriented professional/ technical
courses offered by reputed universities.
Post graduation : MCA, MBA, MS, etc.
Studies in India :
School education including plus 2 stage.
Graduation courses : BA, B.Com., B.Sc., etc.
Post Graduation courses : Masters & PhD.
Professional courses : Engineering, Medical, Agriculture,
Veterinary, Law, Dental, Management, Computer etc.
Courses like ICWA, CA, CFA etc.
Courses conducted by IIM, IIT, IISc, XLRI. NIFT etc.
Other courses leading to diploma/ degree conducted by
colleges/ universities approved by UGC/ Govt./ AICTE etc.
8. The following documents are to be submitted to complete the
application process.
Letter of admission
Duly filled and signed loan application form
2 recent passport size photographs
Statement of cost of study
PAN Card, AADHAR card of student and parent/guardian
Proof of identity and proof of residence
Statement of assets and liabilities of parent/guardian
Proof of income of parent/guardian.
DOCUMENTS REQUIRED :
9. Fee payable to college/ school/ hostel.
Examination/ Library/ Laboratory fee.
Purchase of books/ equipments/ instruments/ uniforms.
Caution deposit/ building fund/ refundable deposit supported by
Institution bills/ receipts.
Travel expenses/ passage money for studies abroad.
Purchase of computers - essential for completion of the course.
Any other expense required to complete the course - like study tours,
project work, thesis, etc.
EXPENSES CONSIDERED FOR LOAN:
10. For loans up to Rs. 4.00 lakhs Co obligation of parents . No
security
For loans above Rs. 4.00 lakhs
and up to Rs.7.50 lakhs
Co obligation of parents together
with collateral security in the
form of suitable third party
guarantee.
For loans above Rs.7.50 lakhs
Co obligation of
parents together with tangible
collateral security .Collateral
security in the form of NSC / LIC
Policy/ Immovable properties/
Bank Deposits in the name of
student/Parent/Guardian or any
other third party with suitable
margin.
QUANTUM OF FINANCE:
11. Quantum : Maximum amount that bank finances
For studies in India: maximum Rs 10.00 lakhs
For studies abroad: maximum Rs 20.00 lakhs
Margin : It is the percentage of loan amount which the applicant
has to bring in on his own.
Up to Rs4.00 Lakhs - Nil
Above Rs4.00 Lakhs - for studies in India - 5%
Studies abroad - 15% flat
Maximum amount can be Rs 35.00lakhs in some banks
QUANTUM OF FINANCE AND MARGIN:
12. Loan Amount Rate of Interest
For loans up to Rs.4 lakhs 3.50% above Base Rate.
Above Rs.4 lakhs and up to
Rs.7.50 lakhs
3.75% above Base Rate.
Above Rs.7.50 lakhs 1.75% above Base Rate.
0.50% concession in interest rate for girl students availing
Education Loans with effect from 2nd March 2009 .
Currently rate of interest are ranging between 9.35%(State
Bank of India) to 16.70%(Axis Bank).
RATE OF INTEREST:
13. Generally, all the lending institutions give a moratorium or a holiday
period of Course period + 1 year or 6 months after getting job,
whichever is earlier.
Repayment of the principal of the availed education loan can start
from after this period or after the applicant have secured job.
MORATORIUM & REPAYMENT :
Loan Amount Years
Up to Rs. 4 lakhs 10 years
Above Rs. 4 lakhs but up
to Rs. 7.5 lakhs
Up to 10 years
Above Rs. 7.5 lakhs Up to 12 years
If the student is not able to complete the course within the
scheduled time, extension of time for completion of course may be
permitted for a maximum period of 2 years.
14. Follow Up : Banks to contact college/ university authorities to send the
progress report at regular intervals in respect of students who have
availed loans.
Processing Charges : Most of the banks do not charge any processing
fee on education loan. Though some lenders may levy a processing fee
of 1% or upfront fee depending on the loan availed .
Capability Certificate : Banks can also issue the capability certificate
for students going abroad for higher studies. For this financial and other
supporting documents may be obtained from applicant, if required.
Other Conditions : However, banks may obtain a declaration/ an
affidavit confirming that no loans are availed from other banks.
Loan applications have to be disposed of within a period of 15 days to 1
month.
OTHER FACTORS :
15. More than half of all education loans in
South India, Tamil Nadu and Kerala
take 38%
18. ADVANTAGES OF EDUCATION LOANS :
The biggest advantage of student loan is that it helps the needy
students who do not enough funds.
Lower rate of interest:They carry lower rate of interest as compared
to other loans like housing, vehicle, personal loan.
No security up to certain limit:There is no need for any security up to
certain amount in student loan and hence borrower is saved from
stress of arranging for security.
Deduction under section 80(E) : Under section 80(e) of the Indian
income tax act, a person can exempt the amount paid against the
interest of the education loan – either for self or for his/her spouse or
children – for eight years from the year(s) he starts to repay the loan or
for the duration the loan is in effect, whichever is more.
19. Repayment Default: In case, you can’t get a job after your studies are
over or unable to repay the loan, banks may not allow further loan
deferment. And, even if they do make an exception, it would be on
strict conditions and higher interest rates.
Getting into debt at early age: Another disadvantage of student loan
is that an individual is getting into debt at very early age.
DISADVANTAGES OF STUDENT LOANS:
20. FACTORS TO BE CONSIDERED WHILE
CHOOSING EDUCATION LOAN :
1.Choosing your bank :Choose a bank that will provide you with best
moratorium period interest rate and terms to pay back the loan.
2.Interest Rate: This is the most crucial factor to be considered
before taking education loan. Because a difference of even 0.5%
creates a big impact. Also make sure to check whether the interest
rate is floating or fixed although it depends on the loan amount.
3.Repayment Period: Check out this with the bank. Normally student
starts loan repayment after he/she starts earning and there are
possibilities that earning does not start immediately after the course
ends. So get this point checked as you would end up paying more.
4.Down payment: Whenever you take a loan, down payment should
be deposited in the bank which is normally 5%-10% of the loan
amount.
21. FACTORS TO BE CONSIDERED WHILE
CHOOSING EDUCATION LOAN :
5.How the interest is charged: Every bank has different way to
charge interest. Keeping loan active for a longer duration puts
borrower indebted. So after finishing the education, the first
objective should be to repay the loan amount as early as
possible.
6.Security: While taking a loan, borrower needs to deposit
security with the bank and this differs for each bank. So make
sure to evaluate this aspect before making loan application.
7.Other fees: Apart from interest rate and late payment fees,
banks also charge a processing fee, documentation fee and
others. So always be informed about these charges and keep
yourself upto date for any changes in any type of fees.
22. CONCLUSION :
The Banks offer good services to the Society by providing
Educational Loan for the students who are unable to continue
their higher education due to lack of cash.
Take an extra care before taking education loan from any bank.
Also search for better offers in different banks and analyze terms
and conditions of the loan.