Dreaming about graduating from a college of your choice but worried that it might burn a hole in your pocket? Sit back and let Educational Loans take the wheel!
Educational Loans from various banks are a saviour when it comes to funding an individual’s higher education. As these loans are not one of the ‘mainstream’ loans such as Home Loans, Personal Loans or Car Loans, people are hesitant or mostly unaware of such options. Let’s dive right into answers to some generic queries that rise in regards to Educational Loans.
- Why do you need an Educational Loan?
While we consider the reasons for taking an Educational Loan, many will wonder as to why to choose a student loan over a Personal Loan. The answer lies in the many benefits of Educational Loans.
With the rising inflation, parents, students, and professionals alike are finding that funding higher education in India or overseas is not as easy as it used to be. However, the features and well-designed benefits of Educational Loans are the real deal makers. Let’s take a look at some of them:
- Universally available and accessible to anyone with a will to study.
- Applicable for a host of courses, both in India as well as overseas. Remember to check if the loan you opt for covers the course of your choice.
- For courses in India, the loan amount ranges from Rs. 10 lakhs to Rs. 15 lakhs. For courses in institutions abroad, the amount can be as high as Rs. 20 lakhs.
- A female student is eligible for a discount or low interest rates.
- Students from economically backward sections of the society can avail benefits of a loan for education under government-sponsored subsidy schemes such as the Central Scheme for Interest Subsidy (CSIS).
As education can be expensive, an Educational Loan offers timely and specialised help. It allows you to pay for the tuition, library, and other assorted fees without the fear of running out of money.
Additional Reading: Central Scheme to Provide Interest Subsidy (CSIS) On Educational Loans
- What is the eligibility?
Following are some of the basic criteria that make you eligible for an Educational Loan:
- An applicant must be a resident of India.
- He or she should have already cleared relevant entrance examinations, secured admission to an educational institution, and registered under a recognised course of study.
- A Non-Resident Indian (NRI) applicant must hold a valid Indian passport.
- Applicants are expected to provide a collateral/security that is enforceable in India.
- Graduation, post-graduation, diploma programs, technical courses, management courses and other professional courses offered by recognised universities are the courses applicable in India.
Courses applicable abroad include graduation, post-graduation, and certificate-degree courses from CIMA- London, CPA-USA and other such well-known educational entities.
In addition to these requirements, banks may request for more documentation and proof.
Additional Reading: 5 Things To Keep In Mind While Taking An Education Loan
What are the documents required while applying for an Educational Loan?
The documents necessary while applying for an Educational Loan are listed below:
- Duly filled loan application form
- Self-attested documents for proof of age
- ID and address proof
- Passport-sized photographs of the applicant and guarantor
- Copies of highest educational qualification such as certificates of degree/post-graduation
- Proof of income such as IT returns of parents/guarantor
- Six months bank statement for account held by applicant/parent/guarantor
- Details of collateral security marked by a government-approved valuer (if applicable)
- For studies abroad, Passport/Visa copy or airfare cost as established in documents
- Additional documents requested by the bank offering the loan
Pro tip: Below is a compilation of five things to keep in mind with regards to Educational Loans.
- When you take a student loan, remember that you are involved in a give-and-take relationship with the bank. The bank funds your education, and in turn, you are responsible for returning the sum on time.
- Taking an educational loan also means that you are determined to prioritise your education and career. Splurging on food, entertainment, shopping, and travel during college can leave you without any savings.
- Unless you land a high-paying job right after your course ends, it will be difficult to repay the loan. Maintaining a log or calendar to monitor your payments will keep you focused and on track.
- In keeping with the priority task of repaying your loan, try to set aside any surplus money for loan repayment. The sooner you clear off the loan, the better.
- High interest rates can come in the way of your paying off the loan. To avoid being in such a soup, try to pay off as much as you can before the interest shoots up.
Higher education decides the course of your life and therefore, is of prime importance. Don’t let the ever-increasing prices of educational courses, both in India and abroad, deter you from pursuing the course of your choice.
Before you zero in on a particular student loan scheme, it’s wise to carefully take stock of a few factors. For instance, even if you are eligible for a higher amount, opt for a loan amount that serves your purpose. At the end of the day, you need to pay off the amount in full. Not to forget, with added interest!
Additional Reading: Managing your educational loan!
Managing loan repayments doesn’t have to be a daunting task. All you need is a bit of planning to sail through your educational course and steer clear of debt. Learn more about Educational Loans here.
If you’re in the market for other loans and Credit Cards, go right ahead and explore your options!