Education Loan

Education loan is the financial aid offered by the bank or the loan providers to the candidates who are willing to pursue technical, educational, or other courses abroad. The loan provider allows students to repay the loan after completion of the course and a period of six months is also provided as a grace period until the candidate gets a job.

Types of Education Loan

• Undergraduate education loan for higher education after secondary education
• Post graduate education loan for pursuing courses after completion of undergraduate courses
• Career growth education loans for courses, trainings or certification
• Parents availing education loan for their children

Education loans act as a financial lifeline, covering a wide range of expenses including tuition fees, hostel charges, travel costs, insurance premiums, and more. With loan amounts extending up to Rs.1 crore and a flexible repayment tenure of 15 years, students receive substantial support throughout their academic journeys. Additionally, tax benefits under Section 80E of the Income Tax Act provide relief through deductions on the interest paid. These loans extend beyond traditional academic paths, including undergraduate, postgraduate, vocational training, and skill development courses. Eligibility criteria encompass enrollment in recognized institutions, completion of 10+2 or a degree, among other factors. The application process, available through online and offline channels, requires essential documentation such as admission letters and academic records. An Education Loan EMI Calculator aids borrowers in estimating monthly repayments, providing insights into the holistic loan cost. The repayment journey, often commencing 12 months after course completion, offers flexibility through various modes like internet banking, cheques, direct debit, and demand drafts. Lenders, acknowledging the significance of education, adopt a holistic approach in approving loans, considering factors such as the chosen course, institute, loan amount, academic performance, family's repayment capacity, assets, and annual income.

List of Expenses Covered in Education Loan

Here's what the loan amount will cover:

• Tuition fees
• Hostel fees
• Travel expenses passage money for students studying abroad
• Insurance premium
• Cost of books/equipment/instruments/uniform
• Examination/laboratory/library fees
• Cost of a computer/laptop required for course completion
• Caution deposit, building fund/refundable deposit supported by institution bills/receipts
• Any other expenses required to complete the course such as study tours/thesis/project work

Tax Benefits on Education Loan

The interest you pay on your student loan can be deducted under Section 80E of the Income Tax Act of 1961. This advantage is only available to individual borrowers and is only offered for the purpose of higher education. The deduction is available to all fields of study, both domestically and internationally. It includes both vocational and academic courses.

Courses Covered Under an Educational Loan

• Undergraduate degrees
• Postgraduate degrees
• Undergraduate diplomas
• Postgraduate diplomas
• Vocational training courses
• Skill development courses
• Doctoral programmes

Eligibility Criteria for Education Loans

• Loans are provided for sanctioned undergraduate programs, postgraduate programs, PhDs, diploma courses with a duration of six months or more, job-oriented courses, and technical/professional courses.
• Applicants must be enrolled or secure admissions in recognised institutions, government institutions, professional institutions, and international colleges and universities.
• For undergraduate courses, applicants should have completed 10+2 (12th standard), and for postgraduate courses, a degree is required.

List of Documents Required for Education Loan

Here is an indicative list of documents that most lenders ask for:

• Admission letter from the educational institution
• Mark Sheets (previous education - School/College)
• Age proof
• ID proof
• Address proof
• Signature proof
• Salary slips
• Recent bank account statements
• ITR with the income computation
• Audited balance sheet
• Recent bank statements
• Proof of turnover (service tax return/sales receipt)
• Completed application form with signature
• Latest passport-size photographs
• Appropriate Visa for studies abroad