Education Loans: Things you should know
Education holds immense importance in the life of every individual. It serves as a catalyst for expanding one’s understanding of the world and shaping their personality. As parents, the aspiration is often to provide the best education for your child. However, in the contemporary era, education comes at a significant cost. Recognising this financial challenge, many parents and young individuals opt for a Student Loan, commonly called an Education Loan.
These Loans are specifically crafted to ensure that pursuing higher studies remains within reach for everyone. Here is a comprehensive guide to everything you should know about these Loans.
Features
Every Loan has distinctive features. In the case of Education Loans, here are some of them:
- Loan amount
The amount in Education Loans is flexible. It could go up to Rs. 1 crore for international students. On the other hand, a maximum of Rs. 50 lakh may be obtained for domestic students.
- Financing
In some cases, an Education Loan may cover other expenses linked to education. These include student exchange travel expenses, accommodation, etc.
- Interest rates
Interest rates on an Education Loan depend on certain factors. Some of them are Loan amount, tenure, financial condition of the co-applicant, etc. To get a fair idea of the interest rates, you can use an Education Loan EMI calculator. It is a tool that gives accurate values based on the information you enter.
- Repayments
An Education Loan’s repayment tenure is also flexible. It could be extended up to 12 years. However, this may be done only after six months from completing the course.
What are the eligibility criteria?
The eligibility criteria for such Loans are slightly different from those of other Personal Loans:
Applicant should be an Indian national.
Applicant should have secured admission or a formal invite from the University.
Courses the applicant applies for should be approved and conducted by a recognised college/ university.
Applicant should have completed the 12th standard in the case of an undergraduate or postgraduate degree.
While these are some common requirements, your Loan provider may have more.
What are the documents required?
Documentation is an integral part of every Loan. In the case of a Student Loan, certain documents should be presented compulsorily. These include:
KYC documents (Aadhaar, PAN Card, etc)
Mark sheets of the 10th & 12th standard, along with graduation and other entrance exams.
Admission letter from the University.
An official letter mentioning the fee structure of the course.
KYC of the co-applicant and, in some cases, income proof to justify their annual salary.
Note that your Student Loan provider could ask you to present more documents.
Conclusion
A Student Loan helps when you want to pursue higher education or wish to help your child pursue the same. However, knowing the Loan’s key aspects is important to make an informed decision.