Pursuing higher education has become easier with an education loan. Ambitious students can hone their potential by getting financial help through this loan. It covers all kinds of educational expenses, like paying for fees, books, tuition, hostel, etc. It enables you to pursue higher studies despite financial constraints.
Concerning the terms and structure, these are different from other loans. Hence, understanding the various aspects related to a student loan is crucial. If you get stuck on where to start, we can help you with some common questions asked. Here are a few of them for your reference:
How do I qualify for the loan?
It gets offered to students with no income source. Hence, the education loan eligibility criteria are vastly different compared to other loans. Lenders consider your age, academic records, achievements, course, and university reputation. You require collateral if your loan amount exceeds Rs. 7 lakh. If you have a co-applicant, they too should have a good credit score and financial stability. It acts as a security for lenders to reduce risk.
What are the benefits of taking the loan?
Banks and Non-Banking Financial companies offer maximum assistance with such loans. All your educational expenses like hostel fees, library charges, stationery expenses etc., get covered under the costs. You also get a flexible repayment facility with a moratorium. It allows you to repay after course completion. This provides you with enough time to get employed. You also get tax redemption on the interest of the entire loan amount under section 80E.
Are all courses covered under the loan?
Only the government-approved study programmes get covered under the loan. Courses like undergraduate and postgraduate degrees, PhD, doctorate programmes, Diploma courses, specialised training, vocational courses, etc., are some of them. These differ from lender to lender. It is best to check them on their portal to get an accurate idea. It also varies for overseas education.
How much loan amount can I get?
You get a loan amount of up to Rs. 10 to 25 lakh for an education loan in India. The amount ranges from Rs. 30 to 35 lakh for overseas education. This gets decided based on the lender’s policy. Your down-payment contribution and collateral submission also determine the loan amount you get. Hence, try availing of with enough surplus to reduce the repayment burden.
What are the documents required?
Documentation differs from one lender to another. It also varies for studies in India and abroad. However, the standard documents are similar when you apply for student loan. They are your identity proof, address proof, academic certificates, admission letter, etc. Now, for the surety part, lenders ask for income and credit report of co-applicants and collateral papers. You can submit them online by attaching them with the loan form.