Frequently Asked Questions About Education Loans
Several young Indians dream of pursuing their higher education. However, financing these aspirations can become a challenge. Education loans empower students to study in India and abroad without worrying about finances. While student loans have become popular today, there are still many questions aspiring students and their families have about the process. Let’s answer some frequently asked questions to help young Indians fulfil their dreams.
What is education loan?
An education loan is a sum of money that students can borrow from a financial institution to cover higher education costs. The sum can help with tuition fees, accommodation expenses, the purchase of books, and other costs. Lenders evaluate each borrower’s requirements and offer these loans at varying rates and terms.
What is eligibility for education loan?
Eligibility criteria for education loans across India usually include:
Citizenship
Applications should be Indian citizens.
Age
Those apply for education loan should be at least 18.
Academic Record
A consistently good record can ease the application and approval process.
Co-borrower
Students require a parent, legal guardian or blood relative to be their co-borrower for the loan.
Admission
Students require confirmed admission to receive the loan amount.
Who is eligible for an education loan?
Indian citizens above 18 can apply for an education loan. They must meet the qualification criteria set by their preferred lender.
What is the eligibility for education loan for abroad studies?
Students must meet the same eligibility criteria regardless of whether they hope to study in India or abroad. However, since overseas courses may incur higher costs, students may have to offer collateral for the loan.
Is it risky to take loan and study abroad?
Applying for a loan to study abroad does not pose many risks. However, students must understand the loan terms and conditions and make informed decisions to manage their finances well. Understanding the loan and pursuing the right post-study employment opportunities can ease the burden of repayment later.
Is education loan applicable for private colleges?
Yes, students can apply for education loans to fund their higher education at private colleges. However, they must ensure the college is recognised by relevant educational authorities and their preferred lender. Applicants can approach the lender directly to ask whether they recognise the chosen institute and course.
What is required for education loan?
Students must submit the following documents to apply for an educational loan:
·Proof of admission
·Proof of identity
·Residence proof
·Income proof for the co-borrower and co-applicant
·Bank statements
·Academic records
Can I get 20 lakhs education loan?
Yes, students can apply for education loans worth Rs. 20 lakhs. However, lenders may ask them to provide security or collateral for the amount.
Can I get 20 lakhs education loan without collateral?
Yes, some students can get an education loan worth Rs. 20 lakhs without offering collateral. However, the decision depends on the applicant’s financial history and the lender’s eligibility criteria.
How to get education loan for abroad studies without collateral?
Students must research lenders providing loans without collateral. Lenders may offer high loan amounts without collateral to students who have performed well academically and those pursuing courses that will lead to promising career prospects. Aspiring learners must speak to lenders directly to understand their chances of getting the loan sanctioned.
Can I get 100% loan to study abroad?
Yes, many education-focused lenders like Avanse offer up to 100% financing for students hoping to study in India and abroad.
Can we get education loan for Executive MBA?
Yes, many educational loan providers in India offer financing options for Executive MBA courses. Loans for Executive MBA courses empower professionals to enhance their prospects and boost their careers. Learners can leverage these loans to master new skills and climb the corporate ladder.
What is the interest rate of education loan?
The interest on education loans varies depending on the lender, the loan type, and the borrower’s finances. Many lenders use a floating rate of interest. The rate changes depending on market conditions so borrowers may benefit from lower interest rates at different times. Some lenders use a fixed interest rate, which remains the same throughout the loan tenure. Applicants who can offer collateral could benefit from lower rates than those who cannot. Additionally, students and co-borrowers with a strong credit history and score can enjoy favourable rates over others.
How to repay education loan?
Students typically have to repay the loan after completing the course. However, making payments towards the interest amount during the course eases future payments. Borrowers pay Equated Monthly Instalments (EMIs) for the predetermined course to repay the education loan and interest.
Can education loan be refinanced?
Yes, students can choose to refinance their loan or transfer it to another lender offering better terms. Borrowers usually refinance their loans for lowest education loan interest rate or longer repayment terms.
Student loans can alleviate the financial burden young Indians face while pursuing higher education opportunities. Aspiring learners who understand their needs and the loan terms and conditions can make informed decisions about the future while achieving their academic and career goals.