Depending on the bank or financial institution, you can have a fixed interest rate package or a fluctuating interest rate package. Most floating rates are based on the Repo Rate, with a spread applied before the final effective interest rate is presented to you (EIR).

Education Loan

1.Punjab National Bank Education Loan

• Maximum Loan Amount: Need Based

• Maximum Loan Tenure: 15 Years

• Collateral: Nill Up to Rs.7.5 lakh

• Margin: Nill Up to Rs.4 lakh

• Offers loans to Indian residents and OCIs/PIOs/students born abroad to Indian parents and want to pursue studies in India.

• No security is required up to Rs.7.50 lakh

• Moratorium period is course period and 1 year

• 2.SBI Education Loan

No collateral or third-party guarantee required upto Rs. 7.5 lakh

Repayment to be done one year after course completion

Repayment up to 15 years post the course completion + 12 months

Zero processing fees for loans up to Rs.20 lakh

Second loan can be availed for completing higher studies

3.Axis Bank Education Loan

• Minimum loan amount is Rs.50,000

• Maximum Loan Tenure: 15 years

• Margin: Nill Up to Rs.4 lakh

• Can secure loan before admission based on profile.

• Loan disbursal within 15 business days from the date the bank receives your complete application.

• Unsecured loans up to Rs.20 lakh for working professionals.

• 4.Bank of Baroda Education Loan

• Maximum Loan Amount: Rs.125 lakh

• No security up to Rs.7.5 lakh

• No margin on loans up to Rs.4 lakh

• No processing fees

• No documentation charges

• 5.HDFC Bank Education Loan

• Maximum loan amount is Rs.30 lakh

• Loan repayment tenure is up to 15 years

• Easy documentation process

• No collateral required up to Rs.7.5 lakh

• Tax benefit can be availed on education loan

• Loan amount will be directly disbursed to the institution based on its fee structure

• 6.Tata Capital Education Loan

• Maximum loan amount of Rs.25 lakh

• Minimum loan amount is Rs.75,000

• Collateral: Nill Up to Rs.4 lakh

• Choose from 3 EMI plans as per your convenience.

• Minimal documentation and quick approval of loans.

Education Loan Eligibility

Nationality:

1. Indian citizens

2. Non-Indian Residents (NRIs)

3. Overseas Citizens of India (OCI)

4. Persons of Indian Origin (PIOs)

5. Students born to Indian parents abroad and wish to study in India

Courses:

1. Undergraduate programs

2. Postgraduate programs

3. Doctoral courses and PhDs

4. Certificate courses with 6 months or longer duration

5. Job-oriented courses

6. Technical/diploma/professional courses

Institutes:

1. Recognized institutions and government colleges

2. Private institutes aided by government

3. Professional institutions

4. International colleges and universities

Collateral:

1. Collateral-free loans up to Rs.7.5 lakh from leading lenders

2. Collateral-free loans up to Rs.40 lakh for select courses/institutions from select lenders

Acceptable collateral: Residential or commercial property or plot, fixed deposits, insurance

Loan amount: Up to Rs.1 crore

Education Loan EMI Calculator

If you apply for an education loan, you may use the Education Loan EMI Calculator to figure out how much your monthly payments will be and how much the total cost of the loan will be. Enter a few loan-related factors such as the loan amount, tenure, interest rate, and processing costs to get an estimate of your equivalent monthly instalment (EMI). The total interest payable and a thorough amortisation table that breaks down your EMIs into principal and interest amounts on a monthly and annual basis are also significant pieces of information.

Once a year, most lenders allow you to make partial prepayments on your loan. If you want to make such payments, use the calculator to see how much money you’ll save on interest and how long it will take to pay off your debt.

List of Courses that are Covered under an Education loan

1. Nursery to class 12.

2. Graduation and Post-Graduation courses (technical/professional/diploma) conducted by approved universities or colleges under UGC/IMC/AICTE/government.

3. Regular degree/diploma courses administered by autonomous institutions such as IIM/IIT, etc.

4. Regular degree or diploma courses such as pilot training, aeronautical, shipping, and more approved by the Director General of Civil Aviation/Shipping/other regulatory authority.

5. Job oriented courses (professional/technical) for Graduation/Post Graduation/Diploma such as MBA/MCA/MS offered by reputed educational institutions, courses conducted by the Chartered Institute of Management Accountants (CIMA) – London or Certified Public Accountant (CPA) – USA.

6. Loans for skill development.

Abroad

1. Job oriented courses (professional/technical) for Graduation/Post Graduation/Diploma such as MBA/MCA/MS, etc. offered by reputable institutions.

2. Courses conducted by CIMA and CPA.

List of Expenses Covered in Education Loan

Here’s what the loan amount will cover:

1. Tuition fees

2. Hostel fees

3. Travel expenses passage money for students studying abroad

4. Insurance premium

5. Cost of books/equipment/instruments/uniform

6. Examination/laboratory/library fees

7. Cost of a computer/laptop required for course completion

8. Caution deposit, building fund/refundable deposit supported by institution bills/receipts

9. Any other expenses required to complete the course such as study tours/thesis/project work

Features & Benefits of Study Loan

1. Loan financing up to Rs.1 crore available.

2. Loan repayment tenure up to 15 years.

3. Get Education loans for studies in India and abroad.

4. Some lenders offer loan disbursal before applying for a Visa.

5. Door-step service to collect required documents.

6. Children of the bank’s employees enjoy preferential rates at several banks.

7. Certain banks offer concessional interest rates to female students.

8. Enjoy a moratorium period of up to 1 year after course completion. During this period, you do not have to make payments on the loan.

9. Enjoy tax benefits up to 8 years on the interest paid.

Tax Benefits on Education Loan

The interest you pay on your student loan can be deducted under Section 80E of the Income Tax Act of 1961. This advantage is only available to individual borrowers and is only offered for the purpose of higher education. The deduction is available to all fields of study, both domestically and internationally. It includes both vocational and academic courses.

It’s important to remember that the tax deduction only applies to the interest portion of the EMI, not the principle. There is, however, no limit to how many times you can claim this benefit. You’ll need a certificate from your bank or financial institution that separates the principal and interest components of your EMIs to qualify for this benefit.

This benefit is accessible for 8 years from the day you started repaying your loan or until the interest component is paid off, whichever comes first.

List of Documents Required for Education Loan

Here is an indicative list of documents that most lenders ask:

1. Admission letter from the educational institution

2. Marksheets (previous education – school/college)

3. Age proof

4. ID proof

5. Address proof

6. Signature proof

7. Salary slips

8. Recent bank account statements

9. ITR with income computation

10. Audited balance sheet

11. Recent bank statements

12. Proof of turnover (service tax return/sales receipt)

13. Completed application form with signature

14. Latest passport size photographs

15. Appropriate Visa for studies abroad

How to Apply Education Loan

There are several ways of applying for a student loan:

Apply Online:

Step 1: This is the easiest and the most convenient way of applying. There are two ways of applying online. The first is a straightforward application form that you will fill online, attach the necessary documents, and submit the form.

Step 2: The second is where you apply through providing all the requested details and the lender will then get in touch with you to discuss the terms of the loan before proceeding with the application.

Offline

Step 1:Visit a Branch: You can apply for a loan by visiting your nearest branch with the necessary documents, discuss the terms of the loan with a representative, fill the form, and apply in person.

Step 2:Call the Lender: You can either call the lender or request a call back by expressing your interest. You can then discuss the loan terms and proceed to apply.

Virtual Assistant

To better serve their consumers, banks and other financial organisations are turning to digital ways. Using a Virtual Assistant to clear your doubts and request assistance with the application process is one such way.

Education Loan Repayment Process

The loan repayment period normally begins 6-12 months after you complete your study or, whichever comes first, when you obtain a job. Applicants are given varied moratorium periods by different lenders when it comes to repaying their loans. You will be required to repay your loan in EMIs.

Here are the different modes of repayments usually available:

• Internet Banking – Pay online through the lender’s website or mobile app.

• Cheque – Drop a cheque at any of the branches.

• Direct debit – Set up recurring payments for your EMI to be directly debited from your bank account on the payment due date.

• Demand Draft – Pay through a DD.

The preferred method of repayment varies between lenders. Therefore, it is advisable to check with your lender when taking the loan.

Discussed below are a few important details in regard to education loan repayment process:

Moratorium period: In the case of education loans, the beneficiaries will be able to start paying off the loan after the completion of the educational course or after successful employment.

Part-payment of education loans: The beneficiaries of education loans will be allowed to make part payments towards their loans. As an applicant, you can pay back a lump sum amount to make part repayment of the loan.

Pre-payment of education loan: If an applicant is able to manage the funds for the pre-payment of the loan amount, he or she will be able to do the same. However, it should be kept in mind that this might invite a processing fee.

If money is the only thing standing between you and your professional goals, consider taking out an education or student loan to help you achieve them. You can receive collateral-free goals, which means you won’t have to provide the lender any security and your payments won’t start right after graduation.

What do the Lenders Consider to Approve the Loan?

Lenders consider the following factors when approving a loan:

1. The course and institute you choose

2. The amount you need

3. Your academic performance

4. Repayment capacity of your family

5. Family assets

6. Annual income

Expenses Covered by Education Loans

Some of the additional expenses covered by education loans are:

1. Hostel fees

2. Exam fees, laboratory and library fees

3. Cost of books, uniforms, projects, etc.

4. Travel expenses for overseas education

5. Deposits required by the educational institute