A Guide on an education loan

Quality education is necessary to lead a successful life. To attain it, students often go in search of top institutions. As the cost of education is higher in most of them, you can meet the expenses without exhausting your savings. There are many ways to finance your academic courses after the introduction of loans.

All banks and financial institutions offer their customers an education loan to pursue the desired academic course in a reputed university without worrying about the cost of education. It fulfils the dream of every student in attaining the best education. There are many benefits of applying for a loan.

Available up to Rs. 1 crore

You can avail of a student loan from banks and financial institutions of an amount up to Rs. 1 crore. This loan amount will help you or your child fulfil their dreams of pursuing the desired course without any financial worries.

The tenure

The tenure for repaying an education loan in India is up to 15 years. You can repay it once you start earning or find a stable job without putting the financial burden on your parents. It will make you financially independent. You can calculate the instalments using the education loan EMI calculator.

The interest rate

The interest rate for the loan starts at 7.30% per annum. You need to pay the interest amount along with the EMIs every month. The student is the principal applicant for the loan. The co-applicant can be a parent, spouse, or sibling.

The documents

You need to submit some documents when you apply for student loan. It includes a college admission letter, fee structure, SSC/HSC/Undergraduate mark sheet, Income Tax returns or salary slips of the co-applicant, age proof, ID proof, the address proof, signature proof, duly filled application form, and passport size photographs.

Tax deduction

You can receive a tax deduction on your education loan interest rate for eight years under Section 80 E of the Income Tax Act, provided you apply for it from a reputed bank or financial institution.

Other expenses

A student loan in India covers the basic course fee and the entire education expenses such as tuition and hostel fee, exam fee, library fee, lab fee, cost of books, uniform and other essentials, travelling expenses, and any refundable fees to the institution.

The coverage

When you apply for education loan, the loan amount covers all your expenses. It includes basic course fees, travel expenses, college accommodation fees, insurance premium, library fees, caution deposit, cost of electronic equipment, books, uniform, and other miscellaneous charges.

Special privileges

As a female loan borrower, you get special privileges from the bank or lender. When you plan to pursue higher education, you get an additional 0.5% discount on the interest rate on the study loan for abroad.