If you’re hoping to pursue higher education with the support of an education loan, you should have a solid plan in place. Comparing different bank offers based on eligibility requirements, interest rates, processing time, loan fees, etc. is also a good idea.
It’s also worth checking with non-bank financial institutions (NBFCs), which may have easier qualifying conditions for school loans, albeit at a somewhat higher cost.
If you plan to study in India, you can apply for a domestic education loan from a bank. A number of qualifying criteria would be checked by the bank before accepting the loan, such as the applicant’s or co-class applicant’s 12 or graduation marks, income verification of the applicant/co-applicant, etc.
Rates of interest and loan amounts for education loans for domestic education might vary depending on the type of program, whether the institution is premier or non-premier institution, etc.
On education loans for IIMs and IITs, most banks provide bigger loan amounts and lower interest rates. There’s also the potential of not paying any margin money for a loan of up to Rs 4 lakh. Your margin maybe around 5 percent if your loan amount exceeds Rs 4 lakh.
A six-month moratorium period or a year following the completion of the course, whichever comes first, is also allowed by lenders before starting repayments, which may also vary from lender to lender.
Education loans are also available from banks for students who wish to study abroad for their graduation or post-graduate courses. It is possible that the loan amount will vary depending on the type of course taken, the college attended, and so on Note that the loan eligibility norms for the same college and course may vary from one lender to the next, so do your homework before applying.
It’s important to keep in mind that education loans are only available for Indian citizens, regardless of whether they intend to study at a domestic or overseas university.
A scholarship or an assistantship might be used to offset your education loan while you’re planning on studying abroad. If you borrow money to study abroad, the repayment obligations may be different than if you borrow money to study in the homeland.
As a general rule, banks allow 15 years as the maximum repayment period for either a domestic or overseas student loan. A student’s education loan may also differ based on the type, of course, he or she intends to take. Individualized loans are offered for medical, law, engineering, and other graduate and undergraduate professional courses.
As a result, banks tend to offer bigger loan privileges for courses that demand more cash than others. For example, MBBS and MBA programs can have quite high funding requirements compared to other courses.
It is common for banks to ask for collateral for loans that exceed Rs 7.5 lakh. A collateral-free loan, on the other hand, is usually available for admittance to prestigious colleges and universities, such as the IIMs and ISBs, and IITs.