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With every passing year, college fees are increasing. Whether you want to study in India under any private college or want to pursue a course abroad, college fees are on the rise. But this should not demotivate you. Education loans are a very common feature for pursuing quality education both in India and abroad. An undergraduate engineering course fee in India could be anything between Rs 5-10 lakhs while a medical degree in a private college can be Rs 30lakhs to Rs 50 lakhs. The management fees for a good MBA degree can be anything Rs 10 lakhs to Rs 15lakhs. To cover your education costs, the best thing to do is to opt for the right education loan.
What will an Education Loan Cover
An education loan will cover the following things:
Hostel and boarding Fees
Books and Supplies
Examination and Library Fees
Travel Expenses (if studying abroad)
Health Insurance (if travelling abroad)
Eligibility for Education Loan
Indians of the age between 16 to 35 years pursuing Bachelors/Masters/Doctorate degrees
Confirmed admission letter from UGC recognized university
Co-applicant is mandatory for all full time programs. Co-applicant can be parents, siblings or spouse
For loans more than 7.5 lakhs third party guarantor is required.
The size of education loan depends upon the course and the college. If you have opted for post graduate courses in premier management institutes like the IIMs, banks offer loans up to 20 lakhs. However, the average loan is anything between Rs 2 lakh to Rs 20 lakhs.
Documents for Education Loans
Break-up of the costs of the course
Completed loan application form and photographs
KYC (Know Your Customer) document
All academic mark sheets and certificates
PAN Card of the student and Parent/ Guardian
AADHAR Card of the student and Parent/ Guardian
Proof of identity (Driving Licence/Passport/Aadhar/ any photo identity)
Proof of residence (Driving Licence/Passport/Electricity bill/Telephone bill)
Student/Co-borrower/ guarantor's bank account statement for last 6 months
IT return/ IT assessment order, of previous 2 years of Parent/ Guardian/ other co-borrower (if IT Payee)
Brief statement of assets & liabilities of Parent/ Guardian/ other co-borrower
Proof of income (i.e. salary slips/ Form 16) Parent/ Guardian/ other co-borrower
Repayment of Education Loans
After you have completed the course, you get a moratorium of 6 months to 1 year before you start repaying. No matter what, even if you have not secured a job, you need to start the repayment after a year and you can avail of the benefits under Section 80-E of the Income-Tax Act.
Important Points to Remember
Providing margin money for education loans exceeding Rs 4 lakhs which is usually 15% of the loan amount is
You have to provide some immovable property in your name for a loan amount of more than Rs 7.5 lakhs
Your education loan amount for studying abroad will depend on the exchange rate at the time of disbursement.
Your repayment will start after a moratorium period
Completing your KYC or (Know Your Customer) is an essential part of the loan process
Banks Offering Education Loans
Some of the popular banks offering education loans are: