What is the procedure for an Education Loan?
By admin | Last Updated Aug, 2023
How to get Education Loan?
In today’s society, education is more important than ever, offering doors to endless opportunities. Higher education is a necessary stepping stone to a successful and satisfying profession. However, rising educational prices can be a financial burden for many students & their families. This is where school loans come in handy, offering access to funds that can turn academic goals into reality. In this detailed guide, we will walk you through the step-by-step process of acquiring an education loan to alleviate your financial burden and make your educational goals a reality.
Education Loan Process: A Step-by-Step Guide:
Step 1: Investigation and Selection:
Begin by investigating different education loan lenders, banks, and financial institutions. Compare each lender’s interest rates, loan periods, repayment alternatives, and any additional benefits or concessions. Government-sponsored loan programs may also be worth investigating, as they may provide better conditions and cheaper interest rates.
Step 2: Review the Eligibility Criteria:
Examine the lender’s eligibility requirements. Common considerations evaluated include your selected educational course, the institution you intend to attend, your academic record, & the income of your co-borrower (if applicable). Before submitting your application, make sure you meet these requirements.
Step 3: Collect the Required Documents:
Prepare all of the documentation required for the loan application. Typically, you will require identification and address proofs, your educational institution’s admittance letter, a detailed price structure, academic records, plus income proof of the co-borrower (if necessary). Organizing these documents ahead of time can help to speed up the application process.
Step 4: Submit Your Application:
Go to your preferred lenders nearest branch or apply online through their website. Fill out the application form completely and submit all essential documents in accordance with their rules. Check the application twice to ensure that there are no mistakes or inaccuracies that will cause the procedure to be delayed.
Step 5: Loan Processing and Verification:
Once your application has been submitted, the lender will begin the loan processing & verification process. This phase entails reviewing the information provided, checking the legitimacy of the documents, & performing credit checks. Your educational institution may also be contacted by the lender to confirm admission details.
Step 6: Loan Approval & Sanction:
The lender will approve your loan application after successful verification and evaluation. A loan offer letter will be sent to you, outlining the sanctioned loan amount, relevant interest rate, payback schedule, and other terms and circumstances. Take the time to carefully read this message and seek clarification if you have any questions.
Step 7: Acceptance & Loan Agreement Signing:
If you agree with the terms described in the loan offer letter, sign and return the loan agreement to the lender. To avoid future misunderstandings, make sure you completely grasp all of the provisions and obligations listed in the agreement.
Step 8: Loan Disbursement:
Once the loan agreement is finalized, the lender will direct the sanctioned loan amount to your educational institution. This sum will cover your tuition, housing bills, and other educational costs as outlined in the loan agreement.
Step 9: Repayment:
Education loans often include a moratorium period during which you are not required to begin repaying the loan. The moratorium period normally lasts till you finish your course, plus a few months grace period. After this period, you will begin repaying the loan in EMIs in accordance with the agreed-upon repayment schedule. To guarantee a seamless payback procedure, manage your finances carefully throughout this time.
Eligibility for Education Loans:
- Loans are available for approved undergraduate programs, postgraduate programs, PhDs, six-month diploma courses, job-oriented courses, and technical/professional courses.
- Applicants must be enrolled or have received admission to approved recognized institutions, government institutions, professional institutions, and overseas colleges and universities.
- For an undergraduate course, applicants must have completed 10+2 (12th standard) and a degree for a postgraduate course.
Documents Required:
- KYC documents
- Mark sheets for 10th, 12th, graduation, and entrance tests
- Admission letter
- Fee structure
- In some circumstances, co-applicant KYC & income verification are required.
- In some circumstances, further documentation may be required.
Advantages and disadvantages:
- International students can borrow up to Rs.1 crore, while domestic students can borrow up to Rs.50 lakh.
- Under certain situations, 100% financing is available.
- Other expenditures, such as student exchange travel and a laptop, are covered by the funding.
- For overseas transfers, preferential currency rates may be provided.
- The college loan should be co-signed by both parents.
- Loan payback terms of up to 15 years are possible.
- Loan moratorium period of up to six months to one year after completion of the course.
- Tax breaks on loan interest payments are available for up to eight years.
Expenses Covered by an Education Loan:
- Fees to educational institutions.
- Fee for examination/library/laboratory.
- Travel and transit expenses for studies abroad.
- If appropriate, insurance premium for student borrowers.
- Caution deposit, building fund/refundable deposit, and institution bills/receipts (total expense should not exceed 10% of total loan).
- Purchase of books, equipment, instruments, and uniforms (total expenditure should not exceed 20% of total loan).
- If a computer is required to finish the course, it should be purchased at a fair cost (the total cost should not exceed 20% of the total loan).
- Any other costs associated with completing the course, such as study tours, project work, thesis, and so on (total costs should not exceed 20% of the total loan).
- While calculating the loan amount, consider scholarships, fee exemptions, and other options accessible to the student borrower.
Top Education Loan Interest Rates 2023:
| S.No. | Bank Name | Interest Rate ( % pa) |
| 1. | Bank of Baroda | 9.15% onwards |
| 2. | Punjab National Bank | 9.25% onwards |
| 3. | Canara Bank | 9.25% onwards |
| 4. | Union Bank of India | 11.30% onwards |
| 5. | State Bank of India | 8.55% onwards |
| 6. | Central Bank of India | 8.55% onwards |
| 7. | IDBI Bank | 9.01% onwards |
| 8. | Indian Overseas Bank | 11. 05% onwards |
| 9. | HDFC Bank | Preferential rates as per the college or the university |
| 10. | Axis Bank | 13.70% onwards |
| 11. | Federal Bank | 12.55% onwards |
| 12. | ICICI Bank | 9.95% onwards |
| 13. | Kotak Mahindra Bank | Up to 16% |
| 14. | Karnataka Bank | 10.44% onwards |
Education Loan facilitated by Admission Jockey:
Admission Jockey simplifies the process of securing the finest opportunities for you. Say goodbye to the hassle of applying for an education loan on your own – Admission Jockey takes care of it all. No need to be burdened with the complexities; we handle the entire process for you. By choosing Admission Jockey, you can rest assured that your preferred options are well taken care of, unlike going directly to the college for an education loan. Regardless of your bank affiliation, we are committed to offering you the best available options.
Conclusion:
To summarize, education loans are powerful tools that open doors to a brighter future by making high-quality education available to a wider range of people. Students can set the road for a successful academic journey and a rewarding future ahead by following the procedures provided in this article and getting the necessary assistance when needed. Services such as Admission Jockey make the procedure easier. Students can get a good education and have a better future with education loans.
Related FAQs:
1. Can education loans cover expenses other than tuition fees?
Yes, education loans can cover various expenses, including examination/library/lab fees, travel expenses for studying abroad, purchase of books and equipment, and other course-related costs.
2. How is the loan amount determined?
The loan amount is usually based on the total cost of education, including tuition fees, accommodation, and other expenses. Scholarships, fee waivers, or other financial aids may also be considered while determining the loan amount.
3. How can I apply for an education loan?
To apply, research different lenders and their loan options, prepare the necessary documents, and submit your application either online or at the nearest branch of your preferred lender.
