The Buyt Desk
To get an exciting head-start for a well-paying job, quality education is a must. And in developing countries like ours, higher education in premier institutions comes at a cost. The government-run institutions have a cut-throat competition, and private premier institutions are no doubt pricey.
And if any student is contemplating for education abroad, the expenses become even higher. Thankfully, education loans are there to give wings to dreams. The government of India has a comprehensive Education Loan scheme for students vying to study in premier institutions of India or abroad.
Who is Eligible For Education Loan in India and How to Apply?
The education loan is available to any Indian citizen who has secured admission in a recognized institution for higher education through any medium, entrance exam or merit basis, and age not exceeding 35 years.
When applying for an education loan, you must explore all the options available, compare different products, and run a thorough check.
The government of India has started a portal for education loans, Vidya Laxmi, sharing a common platform with the Department of financial services, Department of higher education and Indian banks association (IBA). You can apply for an education loan on this portal by filling a form known as CELAF. A student can apply to a maximum of three banks through Vidya Laxmi. Vidhya Laxmi covers all types of courses offered in schools, colleges and universities.
The Benefits Of Education Loan?
The rising cost of education is making more and more parents/students go for the education loan. And there are many advantages that education loans offer to students.
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The processing time of the education loan is faster than other loans.
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There is a competitive rate of interest. Some premier institutions have a tie-up with banks, which helps getting the loan at a cheaper interest rate.
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Some banks offer this loan to female students at a low rate of interest.
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A few banks offer interest concessions to students who are willing to pay the interest amount during their study period, called the moratorium period.
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Parents get exemption in income tax under section 80E for the period of eight years.
Documents Required for Education Loan
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The mark sheet of the last qualifying exam, if applying after 10+2, then mark sheet of 10+2, if applying after graduation, then the graduation mark sheet.
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Proof of admission in the course.
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If getting any scholarship, then letters confirming the same.
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A detailed statement that covers the cost of education.
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ID proof of parents and students.
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The age proof, income proof, residence proof of the parent or guardian.
For receiving the first disbursement of the loan, you need to present the following documents:
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A demand letter issued by the institute.
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Documents for collateral security.
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Disbursement request, loan agreement and sanction letter with the sign of applicant and co-applicant.
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For overseas students, Form A2.
For a loan value less than 4 Lakhs, you don’t need a guarantor or security. For a loan above 7.5 Lakhs, you need collateral.
