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Any student who has completed 10+2 or HSC equivalent and has secured admission for graduation, post-graduation, technical or professional degree or diploma courses conducted colleges or universities approved by UGC, AICTE, government, etc are eligible for education loan.
Loans are also available for courses in reputed foreign universities or for courses conducted by overseas professional bodies.
What are the conditions to get a loan
The conditions for getting an education loan should be that the student has obtained admission through merit-based selection process and the admission is based on marks scored in qualifying examinations. Some banks may insist on cut off percentage of marks like 50% for SC/ST and 60% for General category be considered.
Some banks may also look at the job prospects after completing the course, especially in case of foreign universities since the loan amount is higher.
Who gives education loans
All commercial banks - public and private sector - give education loans. There are a couple of non-banking financial companies that also give education loans.
What is the interest rate
The rates of interest on education loans is currently between 11.5% and 14%, depending on the loan amount and tenure. For premier institutes lenders offer 25 basis points lower rates. Some public sector banks offer 25 basis points lower rates for female students.
What is covered in the loan
The loan will cover the fees payable to college/school/hostel, examination/library/laboratory fees, purchase of books/equipment/instruments/uniforms, computers- essential for completion of the course, caution deposit/building fund/refundable deposit, travel expenses/passage money for studies abroad, and other expenses required to complete the course like study tours, project work etc.
In some cases banks specify the amount that can be paid for certain items as a percentage of the tuition fees, such as amount for books or uniform,etc.
Documents Required
Other than identity and residence proof of student and parent or guardian, other documents required while applying for an education loan include letter of admission, statement of cost of study, student/co-borrower/guarantor's bank account statement for last six months, IT return/ IT assessment order, of previous two years of parent/guardian/ other co-borrower (if IT Payee), brief statement of assets and liabilities of parent/guardian/other co-borrower, proof of income of parent/guardian/other co-borrower.
