The roots of education are bitter, but the fruit is sweet.
A good education leads the path to success. Quality education is what every parent looks after their children. However, nowadays, the cost of education has risen, and the fact that the price of studying at reputed institutions is already quite high. Hence, parents who want to provide their children with the best education, invest their money in FD (fixed deposit), Insurance plans, and Equity for the long term. However, sometimes in spite of planning so well, there are chances of deficit in finance. So an Education Loan could be an ideal solution for your dreams.
Features of an education loan:
- One can opt for an education loan if he wants to study in India or even abroad.
- The Rate of Interest can be as low as 6.6%, to even as high as 15.2%
- The guardian or parent of the student needs to be co-applicants for the loan application.
- The student can apply up to a certain amount (basically 7.5 lakhs)
- The maximum amount of loan varies from bank to bank
- If the applicant wants to study in India, the bank can grant 10 lakh worth of loan
- if the applicant intends to study abroad, the bank can give a loan of 20 lakh.
- Usually, the tenure for repayment of the loan is 5 to 7 years, but flexible repayment options are available. An applicant can also opt for more extended repayment periods that can go up to 10 to 15 years.
- The EMI of an education loan does not begin immediately or during the period. They provide one year time until the applicant gains the regular income.
- The interest on the education loan amount is eligible for tax rebate under section 80E of the Income Tax Act.
Importance of Education Loan in India:
The overall cost of education has been increasing in India as well as abroad. And financing child education becomes a bit difficult, and that is the reason there is a demand for education loan in India. There are several banks providing education loans in the market. In India, there is a wide range of people who apply for Graduate Postgraduate courses, as well as Doctoral and Professional degree courses. The expenses which are covered are tuition fees, registration fees, examination fees, as well as all aligned costs like uniforms, traveling expenses, laptops (if required), lab equipment charges, etc.
Education loan eligibility:
Education loan is offered to students who are unable to make expenses for their higher education. The eligibility of the applicant is based on their academic performance. At times even scorecards are taken into consideration for the approval of the loan.
What is the eligibility criteria?
- The individual applying for a loan should be a resident of India.
- He/she must have confirmed admission in a recognized institution in India or abroad.
- The age bracket should be 18 to 35 years during loan application.
- The students pursuing full-time courses need to have a co-applicant who can be a parent/guardian/ or spouse/parent in law(in case of married candidates).
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Mandatory documents that a student needs to provide to the bank while applying for the loan:
- Duly filled and signed the application with affixed photographs
- Two photographs of passport size
- Copy of exam mark sheets of 10th/12th or latest education certificate.
- Statement of course expense
Aadhaar card and pan card of the student and parent and guardian.
- Rental Agreement/Bank statement of 6 months of the student or Guardian/Copy of ration card/Gas book/Electricity bill/Tel bill
- Copy of Aadhaar Card/Voter ID/Passport/Driving license for age proof
- Income proof – 6 months bank statement of the borrower or the updated passbook of the bank. Most recent salary slips of the parent or guardian.
- Copy of Voter ID/Aadhaar card/Driving License/Passport as identity proof
Now the final decision is yours. An education loan can be a good option if you consider these points:
- Make sure about the timely payments.
- Keep your borrowings in small amounts.
- Try and work while you study
- Secure a job so that within six months, you are capable enough to pay the loan dues.
So if you consider these four points while opting for an education loan, it would be easy for you to make due payments at regular intervals.