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How to Take An Education Loan in India: Education is a valuable asset, and it often comes with a significant price tag. If you’re planning to pursue higher education in India or abroad and need financial support, an education loan can be your solution. This guide provides a straightforward, step-by-step process to help you obtain an education loan in India.
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Determine Your Eligibility
Before applying for an education loan, ensure you meet the eligibility criteria. Typically, you should:
- Be an Indian citizen.
- Be aged between 18 and 35.
- Have secured admission to a recognized institution for your chosen course.
Must Read: Types of Education Loan for Indian Students | Leverage Edu
Choose the Right Lender
Research and compare loan offerings from various banks and financial institutions. Look for competitive interest rates, favourable terms, and customer reviews. Government banks often offer lower interest rates, making them a popular choice.
Identify the Loan Amount
Calculate the total expenses for your education, including tuition fees, accommodation, books, and other essentials. Most lenders provide loans that cover up to 100% of these costs. Ensure you borrow only what you need to avoid unnecessary debt.
Gather Required Documents
Prepare the necessary documents, including:
- KYC documents (identity and address proof).
- Admission letter from the educational institution.
- Income proof of your co-borrower or guarantor.
- Fee structure of the course.
Choose Collateral Wisely
Depending on the loan amount, you may need to provide collateral or a third-party guarantor. Loans below ₹4 lakh generally don’t require collateral, while higher amounts may need security.
Loan Application
Submit your loan application through your chosen lender’s website or at their branch. Online applications are convenient and often come with quicker processing times.
Loan Approval
Once you’ve submitted your application, the lender will review it. If approved, you’ll receive a loan approval letter detailing the terms and conditions.
Loan Disbursement
After accepting the loan offer, the funds will be disbursed directly to your educational institution. Ensure your institution cooperates with this process.
Repayment Planning
Most education loans offer a moratorium period during your course and a grace period after completion. Repayment typically starts after this grace period. Plan your finances accordingly.
Tax Benefits
Remember that you can claim tax benefits on the interest paid under Section 80E of the Income Tax Act.
Also Read: Education Loans to Study Abroad for Indian Students | Leverage Edu
FAQs
Any Resident Indian can apply for the loan. The loan applicant’s minimum age should be 18 years and the maximum should be 35 years. Students should have secured admission to a higher education course in recognized institutions, Indian or abroad, through entrance tests.
Individuals earning at least INR 30,000 per month are considered eligible to be named as education loan co-applicants. Lenders do consider individuals who earn lesser monthly salaries as co-applicants. However, INR 30,000 is the recommended minimum monthly salary.
Checklist of Documents to be submitted along with a duly filled Loan Application Form:
Mark sheet of 10th, 12th, Graduation (if applicable), Entrance Exam Result.
Proof of admission to the course [Offer Letter/Admission Letter/ID card if available].
Schedule of expenses for the course.
Securing an education loan in India doesn’t have to be daunting. By following these steps and conducting thorough research, you can make informed decisions and achieve your educational aspirations. Remember to choose your lender wisely and borrow responsibly, ensuring a bright future without financial stress. For more such information, stay tuned to Leverage Edu!
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