How To Apply For Education Loan – Procedure, Formalities Required

How To Apply For Education Loan

An education loan is the most important step for a huge majority of students residing in India. Financing education is a stepping-stone for many deserving candidates who aspire to fulfill their dreams by pursuing their future studies in abroad. Those aspirants who want to accomplish their dreams, they must be having common doubts about How To Apply For Education Loan ?

Procedure, Formalities Required, courses, etc. here in this article we have asserted few tips one must follow in order to apply for an educational loan. Go though it well and grab a technique to get you education loan easily.

How To Apply For Education Loan

The loans which are provided to students just to pursue their studies beyond class XII are generally termed as education loan. If any amongst students who has the required academic qualification but not able to pursue further studies because he/she financially weak, can acquires this loan.

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It is mainly available for all higher studies and most education loans are given for management degrees or advanced technological degrees. Banks normally do not give loans to study arts. It depends on the cautions, terms & conditions of the particular bank who often considers the income of the parents to give loans for studying in abroad.

Procedure, Formalities Required For Applying Education Loan:

All appliers are required to prepare number of documents beforehand and the process goes as follows in the below part:

1)    Once you have decided to go abroad and study, it is important for you to know a complete process of admission, here are the documents which should be kept ready:

  • a proof of admission to the selected recognized institute.
  • Proof of your normal high academic performance along with the last mark sheet requires to be produced and also a schedule of fees.
  • Depending on the amount that you are applying for, it is essential to produce income statement, statement of assets and liabilities, etc.
  • If you are going to study abroad, it is important for you to have your passport with a valid visa too.

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2)    The education loan you’ll get, covers a number of things in addition to your tuition fees. Such as, hostel, exam, library fees, purchasing books, travel and other expenses.

3)    After submission of all the documents and get verified, applier has to appear for an interview. Therefore it is necessary for you to know as much as possible about the course and also university that you have chosen for you further studies.

4)    It takes approx. 15 days to be sanctioned and once it has been sanctioned, an individual will get a promissory note to be signed.

5)    In most of the cases, banks pay the institution directly and or to applier.

6)    You should check the repayment clause as in mostly in cases of repayment it starts six months after the end of the course or as soon as you get a job.

7)    Interest rates on educational loans depends on a number of factors and they differ between 10% and 15% rates of interest.

8)    You have to claim tax deduction on the interest of loan and there is no such deduction that can be claimed on the principal.

The following table gives an idea how much the cost of higher education has increased in India:

** The below uttered sample clearly shows that most of the Indian requires education loan to complete any of the professional higher degree courses.

Institute Fees per year
National Institute of Technology 53000
Indian Institute of Technology 90000
Self financing colleges 70000
Anna university (affiliated courses) 40000

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Common criteria for eligibility are:

  • Applier must be a citizen of India and have obtained a specified amount of marks/ consistently high academic records.
  • As some banks impose a limit of 28 years, therefore one should not be older than 30 years though You must be doing your course from a recognized institute.
  • To attain loan your parent should have enough income or must be having sufficient family assets.

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Things To Know Before You Apply

You can apply for education loan in following cases:

  • If you want to apply for full time course. In this case of part time or distance education courses or correspondence courses, most of the banks do not provide loans. For these, one has to consult their local banks.
  • One can pursue these course in India or also in abroad:

Graduate or P.G courses in medicine, technology, engineering, management, architecture, pure and applied sciences, mathematics, statistics etc.

It is important for all to know that educational loans are tax provable. When it comes to repayment, make sure of the tax rate.

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