Education Loan For Students by Commerceshala

Well, there is no dearth of dreams and aspirations among students in India. We all know exactly what courses we want to pursue, from where we want to pursue them, whether we want to go abroad for higher studies or continue studies in India, all that we are fully aware of. But have you considered how are you going to back your studies up? Can your parents afford it? Will it burn a big hole in your pocket? Is it manageable? If not, then doing so and having full knowledge about it is extremely important.

Education loans have become a popular method of funding higher education in India as cost of educational degrees is getting higher day by day. Most large public as well as private sector banks offer educational loans. How to get an education loan is no rocket science. All graduation, post-graduation and professional courses are available for a loan along with courses that offer degree or diploma. These courses could be from foreign universities or institutes approved by the central or state government. The first criteria is that you must be a citizen of India. If the loan amount is high, the bank will not fund the entire amount of education but only a part of it. There will always be a maximum amount that is given as a loan. Some banks may charge a processing fee, others may not. Expenses of travelling abroad, hostel fees, cost of books, etc. should be taken into account before talking to the bank about the loan and check exactly what the loan covers. Generally, if the loan amount is up to rupees 4 lakhs, no security is required, otherwise it is.  The documents required vary according to the bank in question. Proof of identity, proof of residence, proof that you have been selected for the course and the schedule of fees, mark sheet of last qualifying examination are a few examples of documents required. Each bank offers a different interest rate.

For example:

Loan Amount	SBI rate of interest	PNB rate of interest
0-4 Lakhs	11.25%	10.50%
4 -7.5 Lakhs	12.75%	11.25%
7.5 Lakhs +	11.75%	11.25%

Among private players HDFC Credila is also an option to look for.

With an education loan, one can avail a tax benefit under Section 80E of the Income Tax Act.

A knowledgeable man once said ‘An investment in education pays the best interest’. Education loans can be availed by anyone willing to study further or pursue a specific course of his/her choice. An education loan should be taken only when it is a necessity and after careful considerations. Be careful and fully aware before taking a decision, after all it is your future at stake.  

PS: Documents like pay slips (income proof), Income Tax return, admission letter and other such documents need to be all ready.

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