Planning to go for higher studies? Securing the right Education Loan could be a daunting task. Here are 5 popular Education Loan schemes in India to help you pick one that fits your needs.
The rising cost of education coupled with the competitive job market has made quality education increasingly difficult to afford. Today, a plain vanilla education isn’t enough to bag a well-paying job. It requires one to pursue higher studies to master specific skills, which could cost a fortune.
This is when an Education Loan can certainly come to the rescue. According to a recent study, the average ticket size of Education Loans increased from Rs. 2.5 lakhs in 2010-11 to Rs. 6.77 lakhs in 2016-17.
Additional Reading: Education Loan – A Quick Review
The bank takes into account various factors such as academic record, ranking and quality of the college or institute being applied to, course, entrance exam scores, etc. before providing an Education Loan. These factors determine the future employability of a student. But, before you take your pick, keep in mind the following factors to avoid any pitfalls later:
- To maximise your chances of getting a loan, it is advisable to apply with parents as co-applicants. Also, make sure to ask your parents to check their Credit Scores before applying for a loan as poor credit history could shrink your chances of getting an approval.
- While many institutes promise high placement and good salary packages, they take into account only the best packages and not a representative average. Therefore, it’s best to do thorough research on available job prospects and part-time opportunities you can apply for after completing your course. Also, speak to your seniors to get a more realistic picture.
- An Education Loan is usually the first credit that a student applies for and thus builds the basis of your credit history. Make sure to pay all your EMIs on time. Any default in payments can affect your chances of getting other loans like a Car Loan, Home Loan, or Credit Cards in the future.
- If you are a working professional, you can take advantage of a company-sponsored education.
Additional Reading: How To Pay Off Your Education Loan Before Your 30s
Here is a list of four popular Education Loan schemes in India:
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State Bank of India’s Student Loan
Loans under the SBI Student Loan Scheme are available for all job-oriented professional, technical graduation degree courses, including diplomas, graduation and post-graduation courses.
Under this scheme, you can get a loan up to Rs. 10 lakhs for higher studies in India, and 20 lakhs to study overseas. The SBI student loan comes with no processing fee and offers an interest rate of between 8.45% – 10.70%. The repayment of the loan commences one year after completion of the course or 6 months after securing a job.
The scheme covers expenses such as the cost of a two-wheeler up to Rs. 50,000, travel expenses, fees payable to the school/college/hostel, purchase of books, etc.
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United Education Loan Scheme
The scheme offered by the United Bank of India is for meritorious students seeking higher studies in India and abroad. The loan is applicable for all post-graduation and professional courses like engineering, medical, law, etc. Courses offered in India by reputed foreign universities and evening courses of approved institutes are also covered under the scheme.
Under this scheme, you can get a maximum loan of Rs. 10 lakhs for studies in India and Rs. 20 lakhs for studying overseas.
Repayment of Loan:
For loans up to Rs. 7.5 lakhs – not exceeding 10 years.
For loans above Rs. 7.5 lakhs – not exceeding 15 years.
Rate of Interest:
Up to Rs. 7.50 lakhs: 11.05%
Above Rs. 7.50 lakhs: 11.00%
The scheme offers 0.50% concession from the card rate to all female students.
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Axis Bank Education Loan
The scheme aims to provide financial assistance to students who want to pursue professional or technical education in India or abroad. You can avail a minimum loan of Rs. 50,000 and maximum of up to Rs. 75 lakhs for studies in India and abroad.
The scheme also offers zero processing, pre-payment and pre-closure charges, which makes it an attractive option.
Eligibility:
You are eligible to apply for Axis Bank Education Loan if you meet the following criteria:
- Secured at least 50% marks during HSC & graduation
- Secured admission in India or abroad through an entrance test / merit-based selection process post completion of HSC (10+2)
Rate of Interest:
Up to Rs 4 lakhs: 15.20%
Above Rs. 4 lakhs and up to Rs. 7.5 lakhs: 14.70%
Above Rs. 7.5 lakhs: 13.70%
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HDFC Bank Education Loan
HDFC Bank offers an Education Loan of up to Rs. 10 lakhs for studies in India and Rs. 20 lakhs for studying overseas. The loan is offered to all Indian citizens aged between 16-35 years.
As a loan applicant, you don’t need to provide any collateral for loans up to Rs. 7.5 lakhs and for loans greater than Rs. 7.5 lakhs, the bank requires tangible collateral like a house, car, land, etc. Besides offering quick disbursal and easy repayment, it also gives you the option to secure your loan by opting for insurance protection through the Credit Protect scheme from HDFC Life.
Other loan options
Pradhan Mantri Vidya Lakshmi Karyakram
If you are tired of visiting every bank’s website to find and apply for the best Education Loan, then Pradhan Mantri Vidya Lakshmi Karyakram is just what you need!
It is an Education Loan portal launched by the Government of India where students can apply for a loan to multiple banks on a single platform. All you require is to register on the website, fill out a simple form and apply. That’s not all! The website helps you track the status of your loan application, provide feedback directly to banks in case of any complaints, etc.
HDFC Credila Education Loan
HDFC Credila offers customised solutions and offers different interest rates depending on the institute, co-borrower details, collateral security offered and the academic background of the student.
It offers loan both for studies in India and abroad. There is no upper limit on the loan amount being offered by Credila and it covers the entire tuition fee as determined by the college/university. The scheme also covers up to 100 percent of other expenses including living and hostel expenses, travelling expenses, examination fees, travel fare, etc.
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Avanse Education Loan
Avanse is a Non-Banking Finance Company (NBFC), regulated by the Reserve Bank of India that provides Education Loans to students applying for varied streams ranging from Engineering, Management, and Medicine to Science, Humanities, Law and also niche courses like music, dance, animation, etc.
The ticket size of their Education Loans ranges between Rs. 50 lakhs to Rs. 5 crores depending on the course, institute, academic record of the student, etc. They also provide an option to repay the loan through flexible repayment plans, with a repayment tenure of up to 10 years. The interest rate ranges from 10% to 16.50%.
Additional Reading: Planning to Take an Education Loan? Here Are a Few Tips
There you have it! In case you are looking for a loan or a Credit Card, look no further! We have a plethora of options available for you.