Over the years, the value of education has become more prominent. The generation of today understands the importance of education for their better future and career. Schools, colleges and institutes are asking for a big price for education and it is getting tougher day by day for the parents. It is every parent’s dream to see their ward studying in the best colleges or institutes of the country but the cost of education shatters their dream. The provision of education loans is like a helping hand to parents who are meeting their ends with difficulty. Not only them, but there are also many parents who cannot beat the cost of education; therefore, for them, there is a provision of education loans. Let’s take an insight into the details of the education loan for your shining star.
Criteria: The loan becomes available to the citizen of India. Banks or financial companies usually give first priority to their customers but otherwise, any citizen can avail it. Thought the specification for loan approval will vary from one bank to another.
Expenses cover: Usually the loan amount will cover all the required expenses. It will include tuition fees, admission fees, annual fees, library expenses, travel fees, lab expenses, hostel fees, book expenses, etc. when you apply for a loan; you should confirm with the bank regarding the inclusion of expenses.
Loan amount: For having an education loan to study in India, a maximum amount of INR 4, 00,000 is available. You can get more than this if the paperwork and demand are justified.
Processing fees: Now this is also something that totally depends on the bank or the financial company. Some may take processing fees while some may don’t. Some would charge a fixed amount while some would charge the percentage amount of the loan that you take. Hence you should check it up with the bank before moving ahead. Do note that processing fee is a one-time fee only.
Interest rate: This is one of the important criteria to ponder upon. Although, different banks will charge different rates of interest hence you should study these criteria carefully. Usually, the rate of interest ranges from around 9% to 14% per annum. Some banks or financial companies also provide a concession on the rate of interest when a loan is taken up for girl education.
Security: If the loan amount is up to INR 4, 00,000 then the banks do not ask for any collateral pledge. But due to some reason if the loan amount exceeds then some kind of security is demanded. In such cases, you need to give a collateral pledge or third party guarantee.
Repayment: The repayment tenure depends upon the loan amount and the purpose. Loan having a smaller amount will have a repayment that starts after 12 months. This is entirely based on the amount of loan and bank type. It is best to discuss this with the bank officer.
Tax benefit: The interest that you pay on the education loan is claimable. Once you start paying your loan and start earning; you can present an interest certificate as proof to claim your interest amount back. Do note that the principal amount is not claimable.
Education is children’s right and higher fee structure will not be a hurdle anymore to deserving candidates. For more such information on education loan, get in touch with our team at CollegeBol.