How Education Loan could Extend a Helping Hand

Education loan has come up as a blessing at times when fee structure has shot up for higher education. Started in 1995 by SBI Bank, the student loan later was available in different banks too.  And eventually more number of students benefitted from the same. If you too want to benefit from educational loan scheme, here are a few points you should know:

"Education" Button on Modern Computer Keyboard.

“Education” Button on Modern Computer Keyboard.

Education loan Eligibility:
Educational loans are made available to Indian nationals for pursuing approved courses leading to graduate/postgraduate degree and PG diplomas conducted by colleges/ universities recognized by  UGC/Govt./AICTE/AIBMS/ICMR etc. Reputed professional and technical courses are also considered for granting such loans. Loans are also granted for courses in reputed foreign universities. You can pursue a detailed research on www.webometrics.info.

Eligible expenses for education loan:
The different expenses that are covered under education loan include fees payable, accommodation charges, exam and library fees, reasonable expenses for books and equipment including computer, travelling expenses abroad and other reasonable expenses required to complete course.

Quantum of finance:
The quantum of finance is Rs. 10 lakh for study in India and Rs. 20 lakh for study abroad. Banks can also consider lending higher amount in special cases at their discretion.

Security:
Up to Rs. 4 lakh – There is no security up to Rs 4 lakh however, in this case, parents need to be a joint borrower

Between 4-7.5 lakhs: In this range, there has to be parents collateral security in the form of third party guarantee

Above 7.5 lakhs- Parents should be joint borrowers and there should be tangible collateral security of suitable value required.

Moratorium period for repayment: It includes the course period and a year or 6 months after getting job, whichever is earlier

Margin money: It is nil for loan up to Rs. 4 lakh. However, it is 5 per cent and 15 per cent respectively for study in India and abroad on loan above Rs. 4 lakhs. When your loan amount is higher than 20 lakhs to study abroad, the percentage is calculated in a margin of the required amount where the bank sets a ratio.

Tenure of loan: 10 and 15 years for loan up to Rs 7.5 lakhs and above respectively.

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