How to Get Education Loan Easily from Bank in India

Every student wants to do higher education. Many of the students also dream to study abroad.

They have knowledge, talent and each and everything that they require to get admission for higher studies, but the problem is they do not have the financial resources.

Students generally depend on parents, but sometimes a parent's income is not enough to get their child admitted to a good college or institutions.

So, they need to get an education loan from the bank, but the problem is they do not know how to get an education loan easily from the bank.

In the following, we explain to you how to get an education loan easily.

First of all, you need to get complete knowledge about the education loan eligibility and procedure for getting an education loan and its repayment.

Which expenses are included in education loans?

An education loan is a financial assistance given by banks for students who want to pursue higher study whether in India or abroad.

An education loan covers the tuition fees, books expenses, clothes expenses and all other expenses related to studies.

What is the procedure of getting an education loan?

For getting education loan easily you should take the following step in mind:-

Step 1:

Student must be eligible for applying loan, generally eligibility criteria is:

Students must be citizens of India.
If a student wants to take a loan for higher studies then he must provide academic results i.e. of 10th and 12th and any other study which results are completed.
Before applying for loan, student must have taken secured admission i.e. That College or institution must give the consent regarding the student for taking admission in their college for the institute.

Step 2:

If you are fulfilling the conditions of eligibility criteria then you need to go to a branch of the bank for taking out a loan. The branch will pursue the procedural part.

Education loan procedure and term and condition may vary from bank to bank. You can take out an education loan from a public or private bank.

Step 3

After checking your documents and loan repayment capability, they may grant you the Loan on such terms and conditions which may vary from bank to bank.

What are the documents required for getting an education loan?

The following are some common documents which are required by the bank before lending you an education loan.

Proof of Identity of student: Pan / Voter ID / Driving license
Proof of Identity of Joint Borrower/ Co-borrower / Guarantor
Proof for residence
10th and 12th results of student and result of further study if any completed.
Offer letter or admission letter from the institution in which you are taking loan for studies
Passport size photograph of student
Passport size photograph of Joint Borrower/ Co-borrower / Guarantor.
CIBIL report is also checking for loans to students by the bank.
CIBIL report of Joint Borrower/ Co-borrower / Guarantor.
ITR of the last three financial years of Joint Borrower/ Co-borrower / Guarantor.
If any property is mortgage then approve the map of that property.
Bank account statement of last 6 months.
Results of the course for which you are getting an education loan should be provided to bank when results come for year wise / semester wise ( as applicable)
Entrance exam results
Prospectus of the college for institutions.
Detailed expenditure schedule of students in such colleges or institutions.

How does the bank make education loan disbursement?

Bank take the confirmation from the said institution in which student want to study and Bank discuss the required loan amount directly to Institution like first on request of borrower Bank disburse the fees of first year or first semester, and for the next semester you have to provide the result of first semester for taking disbursement of fees of 2nd semester.

So in this way the bank directly disburses the amount to said college or Institution.

What is the procedure of repayment of education loan?

Repayment of education loan starts:

After one year of completion of course or
Six months after securing a job of student, whichever is earlier.

So it means during the course of study you need not to make any payment, but certain banks are there which demand only interest payment during the course of study.

Generally private banks do this, so you need to consult with your bank.

What are the advantages of getting an education loan?

Good opportunity for students

Education loans provide a good opportunity for students to pursue higher studies, even if they are not financially capable.

Low interest rate and other benefits

Education loans have lower interest rates than other loans. The government also gives many benefits to taking loans.

Note: Don’t take personal loans for education. You should get an education loan.

Tax benefit

Under section 80c of Income Tax Act, 1961 you can get deduction of interest paid on education loan.

This deduction is available for a maximum of eight year or till the interest is repaid, whichever is earlier.

Moratorium period

This is the most important benefit that you need not to pay your EMI during your course of study.

You have to start payment of loan after one year of completion of course for six month after securing a job whichever is earlier.

What are the disadvantages of taking an education loan?

Academic records

Banks demand good academic records before granting you a loan. If banks feel that academic results are not good then the Bank may refuse to give loan.

Credit evaluation

Banks before granting loan check the creditworthiness of parents. CIBIL score is checked and if the Bank is not satisfied or they feel that the borrowers will not be able to pay the loan then your loan application may be rejected.

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