With each and every passing year, the cost of quality education is reaching the sky. Isn’t it? It might not be affordable for everyone. But that doesn’t mean you will stop yourself right? Well, education loans are the only way out for the people who want to study in the reputed institutions but are not that strong financially. Education loans always help to bridge the gap in between the amount needed and the amount one is short of. So what are you waiting for? Here are the few basic things that everyone needs to know regarding an education loan in India.
Things to know about education loans
- What it covers – education loans cover the entire course fee of the student and alongside it also includes other related expenses for example exam fees, hostel fees, misc, etc.
- Who is eligible – the main borrower of the education loan is the student. The parents and others can always act as co applicants.
- Who gets the loans – the loan is given to all those students who want to study abroad or in India itself. According to the banks, the maximum amount of these loans keeps on differing.
- Courses eligible – students who want to pursue graduation courses, vocational courses, post graduation courses are all eligible irrespective of it being full or part time. The common fields are engineering, hotel management, medical, architecture, management and so on.
- Needful documents – to be eligible for the educational loans the student must be a citizen of India. This is the very basic requirement, apart from that they must’ve secured the admission in the desired university or college. So the applicant should be 12 pass. There is however, no age restriction for the student. The documents needed are the admission letter, graduation mark sheets of 10 and 12, fee structure of the institute, income related documents and so on.
- Loan financing – According to the amount needed the banks can even finance 100% of the loan amount. For loans below 4 lakh there is no need for any kind of margin money.
- Interest rate – Normally MCLR is used by the banks in addition to another rate of interest. This additional rate varies from bank to bank and can be anywhere in between 1.35 to 3%.
- Repayment – After the completion of the course the loan is repaid by the student. There can be a relaxation period of 6 months given by the bank and the duration of repayment is 5-7 years during which the entire amount needs to be repaid.
- Precautions – bank charges should be noted while you are applying for the loan a processing charge of 0.15% of the entire loan amount is usually charged by the banks.
Borrowing money for the first time from financial institutions? with this in depth guide about education loans, there’s nothing more you need. Everyone deserves a bright future so people financially weak should make the future of their children bright by taking these bank loans. Worried? Not anymore! Just keep in mind all the minor details while you are going to a bank to take the loan.