Education loan for students
Planning to study abroad and worried, how will you sponsor that huge cost of tuition fees and the cost of living in a different country?
Worry no more, before we tell you how you will get an education loan with a minimum interest rate that you can literally call FREE, you must know few things about the educational loan for students
A loan taken to meet your requirement for tuition fees, hostel fees, and other related expenses that you need for pursuing a specified educational course in an institution is called an Education Loan.
Educational loan for students is offered by many leading banks in across the globe to help students plan for their higher education in both India and abroad to achieve their academic dreams.
Education loan interest starts from 8.40% p.a. and the tenure of repayment goes up to 15 years.
Many banks release a list of permitted courses and institutions for which they offer an educational loan for students.
If you wish to apply for a certain course, find a bank that offers you the same
If you are planning to study in the UK, read our blog on student education loan in the UK
Expenses Covered in Education Loan
- Student’s tuition fees
- Student’s hostel fees
- Insurance premium
- Student’s cost of stationary related to studies like (books/equipment/instruments/uniform)
- Any examination/laboratory/library fees
- Student’s cost of a computer/laptop
- Any caution deposit, building fund/refundable deposit supported by institution bills/receipts
- Other expense related to study tours/thesis/project work
Factors that determine the interest rate of the educational loan for students
A. Educational institutes
Education Loan depends mostly upon the institution that you are applying. If it is a reputed institution, the cost goes low, whether it is an Indian University like IIT and IIM or any other top-ranking university abroad
Also, no collateral is not required for such universities. This is very beneficial for academically excellent students.
Most banks offer a lower interest rate to a girl child comparative to a male child.
This is to promote the girl child to study and help her achieve academic excellence with the same opportunities provided to the male students in the society.
A shorter tenure than a longer tenure can make sure that the outflow of money towards the repayment of the interest is lower. The longer the tenure, the more the money spent on interest.
D. Credit score
If the student himself/herself has a good credit score, it can be very useful to lower the interest rate on an educational loan. A better credit score means a lower interest rate.
Banks in India that offer Education loan to study abroad
Benefits of an Educational loan for students
A. Good loan amount
Maximum loan amount of Rs. 50 Lakhs can be obtained as an Education loan for domestic institutes and up to Rs.1 crore for international institutes.
B. Flexible tenures
Education loans have tenures that can extend up to 10 to 15 years.
C. Good education
It helps one achieve academic excellence that adds to a resume to enable one to get into a reputed company thereby giving one job security and job satisfaction for life.
D. Tax benefits
The interest paid on the education loan can be claimed as a tax deduction as per section 80E of the Income Tax Act that was passed in the year 1961
D. Collateral free loans for premier institutions
The biggest advantage of an education loan is that if the student gets the admission into a premier institute such as IIT or IIM, then the entire loan amount can be taken collateral-free. If you are looking for a chance to repay your educational loan soon, read our guide to post study work visa in the UK
Education Loan for students at a glance
|Interest Rate||8.40% onwards|
|Minimum Tenure||5 years|
|Moratorium Period||1 years|
|Minimum Education Loan amount||Rs. 50,000|
|Maximum Loan without collateral||Rs. 4,00,000|
|Maximum Tenure of loan repayment||15 years|