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Higher Education Loans |
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An education loan is a form of financial support from any bank or financial institution that enables a student for taking higher education.
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Several colleges/ institutes have tied up with various banks, for the benefit of prospective students. For studies in India one can get loans up to Rs.7.5 lakh and up to Rs. 15 lakh for studies abroad.
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Availability of the education loan at the appropriate time will help millions of deserving bright young Indians and brilliant students to achieve their dreams come true. All graduation, post-graduation and professional courses from institutes and colleges approved by the state and central government and also from foreign universities are eligible for a loan.
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Higher Education loan in India
Students and Candidates who are interested in further studies and running short of financial resources, need not worry any more that a wide range of Education loans are available in almost all the nationalized and private Banks of India. There are loans offered in different categories in terms of duration, terms and merits and are offered to deserving students pursuing education either in India or abroad.
The types of the student loan schemes available in several banks in India differ from Bank to Bank. The names of the schemes also vary from Bank to Bank. Graduation/Post graduation/Professional course and programme in any discipline or any other course approved by Government. Generally, all employment generating courses and programmes are eligible for education loans. According to the RBI guidelines, for studies within the country the ceiling of the loans provided is approximately Rs.7.5 lac, while it is Rs.15 lac for higher studies abroad.
Before giving the higher education loan in India, banks study the viability of the borrower based on personal discussions with the student, family's assets and annual income, the nature of the course and reputation of the institute. In most banks for loans up to Rs. 4 lakh no collateral or margin is needed and the interest rate will not exceed the Prime Lending Rates (PLR). For loans above Rs. 4 lakh the interest rate will be PLR plus 1 percent. PLR is a term used to refer the interest rate of the bank and it may vary with each bank. Some banks offer lower rates to women students or those from specified institutions. Security to the loan depends on the amount. Security is some form of investment that is surrendered to the bank while taking the loan. Security is not needed for loan amounts up to Rs. 4 lakhs. Instead of security, some bank may ask for a third party guarantee for higher loan amounts. There is no need to repay the loan while studying. The repayment starts after you have finished the course and programme or started working. The repayment cannot be delayed for years after the completion of course. The loans are to be repaid over a period of 5 to 7 years with provision of grace period of one year after completion of studies.
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