Education Loan

Ever fancy your son attending the Harvard business school? Or, you, young lady, want to fly an aircraft? Perhaps, you have the admission letter from your dream university across seven seas; you now only need the dough...

If the obstacle is cash, an education loan is the answer. The icing on this cake is that such education loans not only cover the cost of the tuition fee but also almost all the expenses involved in the pursuit of academics. You just need a set of eminently gettable documents and a guarantor to set yourself on the road to academia.


EDUCATION LOAN COMPARE

Finally you have got admission in your dream university, now you require the funds to pursue the course. Education loan is the solution. But before deciding on the one, compare various rates offered by different banks, on Apnapaisa compare quotes which present the rates and product details in most comprehensive and user-friendly manner.

To ensure that best deal, please fill in the form alongside stating all your details to get the list of lenders which can cater to your requirement.

The joy lies in Comparing!


EDUCATION LOAN INTEREST RATES

For several education loan applicants, the bank offers a holiday period on repayment while the student is doing the course either on the principal or on the interest or both. But the interest rate at which you borrow is certainly going to become very important as soon as your studies are over. The interest rate on an education loan depends on whether you are studying in India or abroad, the course that you are applying for, your loan amount and the tenure. Special concessions on interest rates are available if the student is a female.

We welcome you to use our Education Loan Comparison tool to find out the current education loan interest rates as also to find out which bank would offer the most competitive rates for your needs.


EDUCATION LOAN ELIGIBILITY CRITERIA

Banks have set eligibility criteria for education loans. Some of the important pre-requisites are mentioned in brief. A loan applicant has to be:

• An Indian national
• Aged 16-26 years of age or any other range specified by the bank.
• Have a good academic track record.
• Have parents or guardians with stable source of income.
• Should have applied to a recognized university in India or abroad.
• Should not be a minor.


EDUCATION LOAN APPLY

In its purest form education loans means a loan where you do not have to repay the principal portion of the loan during the time when you are doing the course. In fact some lenders will even allow you a complete holiday period (no interest payment as well) during the course period. In such cases the interest is calculated and added to the principal portion of the loan and the repayment begins in EMI after you complete the course. Here are some things to keep in mind when applying for an Education Loan.

No security is required if the loan amount is less than Rs. 4 lacs though parents will be asked to stand guarantee. For loans above Rs. 4 lakhs a personal guarantee is required from a person (can be your parents or siblings or somebody else) whose income and repayment capacity is acceptable to the lender. Also for loans above Rs. 7.50 lakhs the lenders will require an acceptable collateral security such as a residential house, jewellery, securites etc.

Education loans are a risky business for the lenders hence they are extra careful while providingeducation loans. Many times they come up with ingenious reasons for not accepting your education loan application. Go to a nationalised bank branch in the area where you are staying and they will have to consider your application. They will need to provide reasons for rejection of your loan application in writing. If they refuse complain to the higher authorities in the bank via their websites and if no satisfactory response is received in 4 weeks time you can also complain to the banking ombudsman.

Typical courses such as MBA, engineering and medicine are funded more easily than say a course in non traditional area such as product design which the bank may not be familiar with. So if you are looking for a loan for a non traditional course allow enough time for the sanction and disbursement process.

Collect all the accredition papers for the course you are doing. For example it will be difficult ot get an MBA course funded unless it is approved by the AICTE (off course well known courses such as the Indian Business School in Hyderabad will be an exception) .

Your past academic performance is important too. So prepare a summary of your academic track record with all the back up documents. A good acadamic record will help in getting you a loan.

If the total parental income is less than Rs. 4.50 lacs you are eligible for complete interest subsidy during the course period. Though the scheme has not yet taken off you should make an attempt to request your bank to get you this subsidy. If they get it they will need to pass it on to you. So even if it takes a little time please persist in your request.

Of course, if you can provide collateral security such as a residential house it is relatively easier to get an education loan. TIP : The bank can takeover an existing home loan from another lender as well as provide you an education loan on the security of the same house provided the value of the house justifies both the loans.

Get your credit report Apply online at http://www.cibil.com/accesscredit.htm and follow the instruction given there to get a copy of your own and your guarantor's credit report. Check your credit report thoroughly to spot errors. If need be, use our advisory services on CIBIL Report to get any errors corrected. Remember any errors in your credit report can reduce your chances of getting a good education loan offer.

Do not forget to take overseas student mediclaim policy if you are going abroad for studies.

Do not sign blank application forms or documents and keep a copy of all documents submitted to the lender for your future reference. Any promise made by the DSA or even an official of the lender has no value unless it is in writing or at least on email.

So if you are basing your decision on any such promise make sure you get it in record in some form


EDUCATION LOAN PROCESS

The education loan process is relatively simple. One can also apply for a loan online and get a loan sanctioned in principle. One can visit a bank branch for further formalities to be completed. The loan process is as follows:

• Filling in the loan application form.
• Personal Discussion.
• Provide validated supporting documents.
• Stage of loan approval or denial.
• Borrower's signature on a Promissory Note.
• Loan disbursal.

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