Education Loans

The Education Loans hold the great credit for nurturing highly professional and prolific courses of brilliant and ambitious students, who belong to financially stringent backgrounds. To ensure that no meritorious and intelligent students are made bereft of career-oriented higher education due to shortage of funds, the government of every progressing country promotes these education loans in a big way, including the Indian government. In this highly enlightening and beneficial web-article, we are providing detailed information about acquiring the education loans in india, for pursuing highly professional and fruitful higher education courses in institutes and universities of national and international importance in India.

Here, it must be noted that educational loans are easily available only for those courses which are highly career-oriented, and relate with especially the fields of engineering, medical, business management, information technology, agriculture, veterinary, accounts and commerce, law, and other highly prolific fields. Again, any of these professional courses is to be pursued in any educational institution which is of regional, national, or international repute, and makes admissions to its courses in any of these fields on basis of highly competitive examinations every year. In India, such higher education loans are provided by both the nationalized banks and the private banks. Today, the most famous and popular banks for such purposes in India are the State Bank of India (SBI), Punjab National Bank (PNB), Axis Bank, HDFC Bank, Bank of Baroda, etc. For the objective of undergoing any of such programs of higher studies in countries abroad, these private education loans are also available to Indian students or professionals. These creative courses can be provided at the academic or professional levels of graduate or postgraduate.

In general, the educational loans extended by banks in India vary from INR-50,000/- to INR-10.00 Lakhs, for undergoing any richly career-oriented course in any reputed Indian institution. And, for higher studies abroad in any international or globally acclaimed university, the magnitude of loan goes up to the level of INR-20.00 Lakhs. Generally, banks provide about 75 to 80% of the total educational expenditure (made till the completion of the desired course in India or abroad). This grant total expenditure covers institutional or tuition fees, hostel expenses, costs of books and stationery, and other necessary expenses during the entire course. Such education loans are obtainable at quite reasonable and generous rates of interest, with some promotional concessions (of 0.50%) to the woman students. The rates of interest vary from bank to bank, and generally start from 10 to 14% per annum. Again, the repayment of such a loan is thought to be due after completion of the targeted course and joining a job soon thereafter. In India, the repayment period of the education loans commonly ranges from 5 to 7 years.

Steps to Apply for an Education Loan in India

This section gives detailed information concisely regarding how to apply for education loan in India, for any of the purposes mentioned above. The process of acquiring an education loan differs from bank to bank; however, some steps are fundamental and common with all banks. The following are the most general steps to be followed for getting an education loan in India:
  • Step-1: Making Application for the Education Loan
    The applicant has to file an application for getting the specified category of an education loan. All required information must be given accurately and honestly. The applicant must be a citizen of India, and has must secured admission to any professional course of any nationwide recognized and reputed educational institute or university, at the graduate or postgraduate level. Today, online filing of an application for education loan is also available. However, for other steps mentioned below, visiting the concerned bank in person is essential.
  • Step-2: Personal Meeting and Discussions
    Then, the student or applicant has to meet with the bank officials, and furnish all necessary pieces of information about his/her academic backgrounds and records, personal and residential details, the course to be pursued, the concerned institution of India or abroad, expected income after completion of the course, repayment of loan, etc.
  • Step-3: Submission of Required Documents
    In the case of an education loan, documents and details related with the admission to any professional courses of any prestigious university or institute are mandatory. Collateral securities (like property mortgage) are also required if the amount of the desired education loan exceeds INR-4.0 Lakh. The parents or guardian of the student may act as co-applicant or guarantor. Documents and certificates related with academic records are to be submitted in duplicate copies. Plans in connection with the repayment of loan in certain agreed installments are also necessary to be submitted to the bank. Other documents to be extended to bank are address proof, identity proof, PAN Card, income proof of guardian or sponsor, income tax returns of the guardian, etc.
  • Step-4: Process of Examination, Security Considerations, and Approval
    After getting the necessary and recommended documents, the bank will examine the given details and verify accuracy of those. The income and credit history, and tax related matters of the guarantor are verified.
  • Step-5: Borrower's Signature on a Promissory Note
    The student is the actual borrower; while his/her any of the parents, is the guarantor. For the loan to be sanctioned, the applicant has to sign a promissory note. Duly signed post-dated cheques may be demanded by the bank.
  • Step-6: Disbursal of the Desired Education Loan
    Once all above formalities are completed, the concerned bank will disburse the desired education loan. The bank may remit the institutional tuition fees directly to the specified institute.

Generally, these all processes can easily take at least two months, in case of the nationalized banks; while the private banks can finalize the entire procedure within a week or two.