According to the Ministry of External Affairs, 261,406 Indian students studied abroad in 2020 and number of students are expected to grow more in the coming year to attain high-quality education. Education loan are considered as the best ways to cover the cost of studying abroad. There are numerous banks in India providing loans different types of loans. Let’s explore types of education loan for Indian students.
This Blog Includes:
- What is an Education Loan?
- How Does an Education Loan Work?
- Types of Education Loan for Indian Students
- Education Loan Benefits
- Top Education Loan Rates
- Repayment of Education Loans
- Leverage Finance
What is an Education Loan?
An education loan is an amount of money borrowed to pay for post-secondary education or costs associated with higher education. There are a number of lenders in the market offering various types of education loan for students. Education loans are meant to help students cover the costs of tuition, books, and supplies, as well as living expenses while pursuing a degree. Payments are typically deferred while students are in college, and they may be extended for another six months after graduation, depending on the lender.
How Does an Education Loan Work?
Education loans are available to help students pursue a degree at a recognized college or university. Government and private-sector credit sources are also available for education loans. The interest rates for federal loans are often cheaper, and some even contain interest that is subsidized. The application process for private-sector loans is more conventional, and the interest rates are often higher than those for federal government loans.
Types of Education Loan for Indian Students
There are several different sorts of education loans available for various types of educational programs. There are student loans for diploma and certificate courses, student loans for skill-based courses, student loans for studying abroad, and so on, depending on the sort of education one wishes to pursue. Regardless of the course, there are two broad categories for education loans:
- Domestic Education Loan: For educational courses inside the country’s geographical boundaries.
- Study Abroad Education Loan: A study abroad education loan, as the name implies, is a loan that may be used to pay for a course of study abroad. There are a variety of possibilities accessible under the study abroad education loans depending on the sort of course. Aside from this, student loans may be further classified into a few more different categories. The following are some of them:
Undergraduate Education Loans
These types of education loans are intended to assist students in pursuing and completing an undergraduate degree program. The undergraduate curriculum might be three or four years long, and it will provide the student with several work prospects. The applicant must have completed or been pursuing secondary education to be eligible for this loan.
Education Loans for Professionals and Graduates
Students who intend to pursue advanced degrees or higher education at universities around the country can apply for these types of professional/graduate student loans. To apply for a graduate student loan, a student must first complete an undergraduate course.
Career Education Loan
Many banks and other financial organizations provide career education loans to assist people to pay for training and courses that will help them advance their careers or qualify for employment. This loan is available to applicants who want to enrol in career-oriented programs at Indian as well as abroad universities and technical and trade institutions.
Education Loan Benefits
No matter which type of education loan you choose, there are several benefits for doing so.
- Local students can borrow up to INR 50 lakhs, while international students can borrow up to INR 1 crore. For some circumstances, 100% financing is possible
- Other costs, such as student exchange travel fees and computers, are covered by the funding
- For overseas disbursements, preferential exchange rates may be offered
- The loan repayment duration might be extended to twelve years after six months of completing the course
You must satisfy the criteria for the loan before you can apply for it. The criteria may vary, depending on the type of education loan you choose.
- Obtaining admission/invitation from a university to a degree/diploma program at a recognized university/college
- For an undergraduate program, you must have finished 10+2 (12th grade) and an undergraduate degree for a postgraduate course
- You must pursue from colleges/universities recognized by the UGC/Govt./AICTE/AIBMS/CMR which provide approved courses leading to graduate/post-graduate degrees and PG certificates
- KYC documents
- 10th, 12th, graduate, and entrance test mark sheets
- Admission letter
- Fee structure
- In some circumstances, co-applicant KYC and income evidence are required.
Top Education Loan Rates
The following is a list of education loan providers for Indian banks along with their respective interest rates:
|Bank Name||Interest Rate (% p.a.)|
|Bank of Baroda||6.75|
|Union Bank of India||6.80|
|Central Bank of India||6.85|
|Bank of India||6.85|
|State Bank of India||6.85|
|Punjab National Bank||6.90|
|Bank of Maharashtra||7.05|
|Indian Overseas Bank||7.25|
|Karur Vysya Bank||10.75|
Repayment of Education Loans
Both academic and non-academic expenses are covered by education loans. These loans, like all other loans, have payment terms that require interest on the principal amount to be paid. The start of repayment is determined by the type of loan taken out, but once it begins, it will be paid in EMIs throughout the agreed-upon time. You can speak with bank personnel, who will recommend an EMI based on your monthly income. You can begin making monthly payments if you agree with our proposal. Otherwise, you have the option to haggle over the price. In any event, the maximum payback period is often eight years.
To save you from high rates and menial bank visits, Leverage Finance offers the best exchange rates in the market, complete transparency and instant payments without the tedious paperwork. All you have to do is log in on Leverage Finance, create an account, add your recipient and transfer money anywhere in the world using popular payment gateways like UPI, Netbanking and Debit Cards.
We hope this article has provided you with all of the necessary information on the types of education loans for Indian Students. Get in touch with the experts at Leverage Edu to make the entire application process a breeze!