{"id":1122,"date":"2023-01-06T07:54:08","date_gmt":"2023-01-06T07:54:08","guid":{"rendered":"https:\/\/leverageedu.com\/learn\/?p=1122"},"modified":"2023-01-06T07:54:08","modified_gmt":"2023-01-06T07:54:08","slug":"understanding-margin-money-in-education-loan","status":"publish","type":"post","link":"https:\/\/leverageedu.com\/learn\/understanding-margin-money-in-education-loan\/","title":{"rendered":"Understanding Margin Money in Education Loan "},"content":{"rendered":"\n

If you want an education loan and go to any government bank, you will hear about loan margin or education loan margin money. But only a handful of students know about this loan margin or margin money in education loans. Not to mention, many students misunderstand the concept of margin money in education loans<\/strong>. In this blog, we will discuss the margin money in education loans in detail. Without any further ado, let\u2019s get started.\u00a0<\/p>\n\n\n\n\n\n\n

What is Margin Money in Education Loan?<\/h2>\n\n\n\n

The education loan margin is known as the specific contribution brought by the students in terms of their overall expenditure. The minimum loan margin is 10% and public-sector banks need to follow it.\u00a0<\/p>\n\n\n\n

For instance, you choose a bank for your education loan<\/strong> and they set the loan margin at 10%. This means that the bank will provide an education loan covering 90% of your expenditures. You will pay the rest 10% of your education expenses. Keep in mind that you need to share your amount of money with the banks. Then they will provide you with the loan.\u00a0<\/p>\n\n\n\n

How Can You Calculate Margin Money?<\/h2>\n\n\n\n

Now that you know the basic concept of education loan margin money, let\u2019s move on to know how you can calculate the margin money properly from your education loan.\u00a0<\/p>\n\n\n\n

As mentioned earlier, most government banks such as PNB, SBI, etc. have a 10% margin money meaning that they will cover the other 90% of the education loan.\u00a0<\/p>\n\n\n\n

However, there are other different cases where the margin money in education loans<\/strong> would be calculated differently. For instance, suppose you\u2019re applying for an education loan of 50 Lakh. As an applicant, you want to pay an account of 20 Lakh. In such cases, the bank would increase the overall education loan margin money to 40%.\u00a0<\/p>\n\n\n\n

What Do You Need to Know about Margin Money?<\/h2>\n\n\n\n

Understanding the margin of money is undoubtedly one of the most important things you need to consider. However, there are some specific crucial things you should know about margin money:<\/p>\n\n\n\n

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  • Education loan margin money is the amount that the applicant needs to pay towards their expenses of studying abroad.\u00a0<\/li>\n\n\n\n
  • The loan amount will be divided into phases. Additionally, the margin money would also be paid periodically as per the loan amount.\u00a0<\/li>\n\n\n\n
  • The percentage associated with margin money is not constant. The percentage can decrease or increase depending on the loan amount<\/strong> as well as your capability of paying the margin money.\u00a0<\/li>\n\n\n\n
  • There are some banks that provide students with 0% margin money.\u00a0<\/li>\n<\/ul>\n\n\n\n
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    How Margin Money is Calculated?<\/h2>\n\n\n\n

    The banks will cater to 90% of your education loan<\/strong> and the rest will be paid by you. Therefore, if the total expenses of your education loan are Rs. 50 lakhs and you apply for the same loan amount, the bank will cater Rs. 45 Lakhs of your education loan<\/strong>, which is 90%. The bank will expect the applicant pays the rest of Rs. 5 lakhs as it\u2019s 10% of the total amount.\u00a0<\/p>\n\n\n\n

    This is the process most government banks follow while calculating the education loan margin money. The scenario explained above is the perfect case, where you\u2019re applying for a <\/strong>loan<\/strong> amount similar to the education loan<\/strong>. But keep in mind that many students misunderstand the terms and conditions associated with the margin money.\u00a0<\/p>\n\n\n\n

    If you\u2019re looking for an education loan, here\u2019s a YouTube video you should watch:<\/p>\n\n\n\n

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