With the rise in the number of educational and professional opportunities across the globe, more and more aspirants desire to study abroad. Studying abroad comes with promises such as a high-flying career, more income, etc. Universities in abroad offer an array of courses and have specific programs related to the kind of education you wish to pursue. Also, many universities offer scholarships and financial aid, keeping in mind the profile of the students.
Funding a child’s education is a daunting task. It is dependent on the course that he/she wants to take up and the institution they wish to study in. The form of tool available to make all this a reality is to avail an educational loan. Indian banks provide various schemes with flexible repayment options, moratorium period, etc.
Following are the essential features of an educational loan in India:
1) You should be anywhere between 18 to 35 years to request for an education loan
2) You can obtain the credit for courses such as management, engineering, medicine, graduate, post-graduate, architecture, arts, hotel management, etc.
3) An educational loan covers additional expenses such as tuition and exam fees, lab and library fees, caution deposit, travel, books and equipment, projects and study tours
4) The educational loan can be paid in monthly instalments via ECS or post-dated cheques
5) Educational loans are granted for 7 years inclusive of the moratorium period
6) Borrowers have to pay interest during the moratorium period
7) If you are applying for an educational loan for a full-time course, you have to select a co-applicant. They could be your siblings, parents, spouse or any other family member
8) You can apply for a loan amount up to INR 20 lakh with the moratorium period and maximum INR 10 lakh without the moratorium period
9) No collateral is required for loans taken up to INR 4 lakh. However, you have to give third-party security if the amount is above INR 4 lakh. You might have to produce tangible collateral if the loan is above INR 7.5 lakh
Following are the tips you need to keep in mind before obtaining an educational loan in India:
1) Choose the right bank. Go for a bank that offers the right moratorium period, interest rate and the correct terms to pay back the amount. Also, check if you can pay through EMIs in advance or part payments
2) Know about your course and loan thoroughly. You should be aware of the VISA costs, ticket charges, airport interviews, cost of the loan, interest rates, repayment schedule, your program, etc. Also, be aware of the family and personal details
3) Go for a balanced educational loan policy. If you choose for lengthy tenure, your EMI will inevitably reduce , but the cost of the loan and interest rates will get higher
4) Moratorium periods are good as they ease off the pressure from your shoulder. They generally last for a year or 6 months. Interest will, however, accumulate. So, pay off the interest during this holiday period as it will lessen your burden
5) Strategise on how to repay the loan. Once you complete your studies and start earning, you can decide on what needs your attention and let go of the unimportant things
6) You can avail of the tax benefits under section 80E of the Income Tax Act on your educational loan. In order to use this benefit, you should have bought the loan from an Indian scheduled bank or a gazetted financial institution
7) Banks understand if you are unable to repay the loan on time. This could be due to unemployment or any other genuine reason. It might be tough to persuade the banks initially, but you can explain to them the situation if it true. Banks in such cases might extend your moratorium period or repayment schedule
Before taking an educational loan in India, understand its implications as well. Be ready for the best and worst.
Funding a child’s education is a daunting task. It is dependent on the course that he/she wants to take up and the institution they wish to study in. The form of tool available to make all this a reality is to avail an educational loan. Indian banks provide various schemes with flexible repayment options, moratorium period, etc.
Following are the essential features of an educational loan in India:
1) You should be anywhere between 18 to 35 years to request for an education loan
2) You can obtain the credit for courses such as management, engineering, medicine, graduate, post-graduate, architecture, arts, hotel management, etc.
3) An educational loan covers additional expenses such as tuition and exam fees, lab and library fees, caution deposit, travel, books and equipment, projects and study tours
4) The educational loan can be paid in monthly instalments via ECS or post-dated cheques
5) Educational loans are granted for 7 years inclusive of the moratorium period
6) Borrowers have to pay interest during the moratorium period
7) If you are applying for an educational loan for a full-time course, you have to select a co-applicant. They could be your siblings, parents, spouse or any other family member
8) You can apply for a loan amount up to INR 20 lakh with the moratorium period and maximum INR 10 lakh without the moratorium period
9) No collateral is required for loans taken up to INR 4 lakh. However, you have to give third-party security if the amount is above INR 4 lakh. You might have to produce tangible collateral if the loan is above INR 7.5 lakh
Following are the tips you need to keep in mind before obtaining an educational loan in India:
1) Choose the right bank. Go for a bank that offers the right moratorium period, interest rate and the correct terms to pay back the amount. Also, check if you can pay through EMIs in advance or part payments
2) Know about your course and loan thoroughly. You should be aware of the VISA costs, ticket charges, airport interviews, cost of the loan, interest rates, repayment schedule, your program, etc. Also, be aware of the family and personal details
3) Go for a balanced educational loan policy. If you choose for lengthy tenure, your EMI will inevitably reduce , but the cost of the loan and interest rates will get higher
4) Moratorium periods are good as they ease off the pressure from your shoulder. They generally last for a year or 6 months. Interest will, however, accumulate. So, pay off the interest during this holiday period as it will lessen your burden
5) Strategise on how to repay the loan. Once you complete your studies and start earning, you can decide on what needs your attention and let go of the unimportant things
6) You can avail of the tax benefits under section 80E of the Income Tax Act on your educational loan. In order to use this benefit, you should have bought the loan from an Indian scheduled bank or a gazetted financial institution
7) Banks understand if you are unable to repay the loan on time. This could be due to unemployment or any other genuine reason. It might be tough to persuade the banks initially, but you can explain to them the situation if it true. Banks in such cases might extend your moratorium period or repayment schedule
Before taking an educational loan in India, understand its implications as well. Be ready for the best and worst.
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