Education Loan
What is an Education Loan?
An education Loan/ Student Loan is a type of financial assistance provided to students to help them cover the costs associated with their education. These loans are specifically designed to support the expenses related to tuition, fees, books, supplies and living expenses while pursuing higher education.
Education loans are offered by the government agencies, private financial institutions and many other leading organisations. The terms and conditions of these loans, including interest rates, repayment plans, and eligibility criteria, vary depending on the lender and the type of loan. In many cases, students may not be required to make repayments while they are still in school, and repayment typically begins after they graduate or leave school.
What are the types of Education Loan?
There are several types of education related loans available in India.
Collateral / Secured Education Loans:
- These loans require collaterals such as property (House/ Apartment/ Land), fixed deposits, Insurance policies, Government bonds etc to secure the loan.
- The advantage for secured loans is a lower interest rate compared to unsecured loan.
Non Collateral / Unsecured Education Loans:
- These loans do not require any collateral.
- Interest rates for unsecured loans are usually higher than secured loans.
Private Banks and NBFCs provide both the types of loans depending on the credit profile of the applicant/ co- applicant.
Which collaterals are accepted by Banks and Financial Institutions?
The accepted collateral for education loans can vary between banks and financial institutions. However, here is a general list of common types of collateral that are typically accepted.
- Immovable Property:
- Residential property
- Commercial property
- Agricultural land
- Fixed Deposits:
- Banks may accept fixed deposits as collateral for education loans.
- Life Insurance Policies:
- Surrender value of life insurance policies may be accepted as collateral.
- Government Securities:
- Some institutions may accept government securities.
- National Savings Certificates (NSC):
- NSCs may be accepted as collateral by some banks.
- Bank Deposits:
- Banks may accept their own deposits or other bank deposits as collateral.
- Shares and Mutual Funds:
- Some banks may accept shares or mutual funds as collateral.
Which expenses are covered under the education loan?
Education loans typically cover a range of expenses associated with pursuing higher education. The specific expenses that are covered may vary depending on the lender and the terms of the loan.
- Tuition Fees:
- The primary expense covered by education loans is the tuition or course fees charged by the educational institution.
- Examination and Library Fees:
- Fees related to examinations, library usage, and other academic charges may be covered.
- Laboratory and Equipment Fees:
- Expenses for laboratory usage and specialized equipment required for certain courses may be included.
- Hostel or Accommodation Fees:
- Loans often cover the cost of accommodation, including hostel fees or rent for off-campus housing.
- Books and Study Materials:
- Expenses for textbooks, reference materials, and other study-related resources are usually covered.
- Travel Expenses:
- Education loans may include provisions for travel expenses, especially for students studying abroad.
- Insurance Premium:
- Some loans cover the cost of insurance, including health insurance for the duration of the course.
- Admission Fees:
- Fees related to the admission process, such as application fees and admission confirmation fees, may be covered.
- Extracurricular Activity Fees:
- Expenses related to participation in extracurricular activities or events may be covered by some loans.
- Caution Deposit:
- Certain educational institutions may require a caution deposit, and education loans may cover this expense.
- Laptop or Computer Purchase:
- Some education loans may include provisions for purchasing a laptop or computer essential for the course.
- Miscellaneous Expenses:
- Other miscellaneous expenses, such as study tours, project work, and any other academic-related costs, may be covered.
Key2Kred: Your Trusted Partner for Education Loans
Are you ready to unlock the doors to your dream education? At Key2Kred, we are dedicated to providing seamless and comprehensive education loan solutions to help you pursue your academic aspirations. With our expertise and extensive network of lenders, we strive to simplify the loan application process, ensuring you receive the financial support you need to study at your preferred institution.
Our Services:
Personalised Guidance: Our team of experienced professionals understands that every student’s journey is unique. We offer personalized guidance, assessing your individual circumstances and academic goals to provide tailored solutions that match your requirements.
Loan Eligibility Assessment: We evaluate your eligibility for education loans, considering various factors such as academic background, course selection, and institution. Our experts will help you understand your loan eligibility and recommend suitable loan options accordingly.
Lender Connections: Through our extensive network of banks and financial institutions, we connect you with lenders who specialize in education loans. We have established relationships with reputable lenders, enabling us to offer a wide range of loan options tailored to your needs.
Application Support: Our team assists you throughout the loan application process. We provide guidance on document preparation, ensuring that your application is complete and accurate. We understand the importance of meeting deadlines and work diligently to streamline the application process.
Loan Processing Assistance: We collaborate with lenders to facilitate the loan processing and approval procedures. Our experts liaise with the financial institutions on your behalf, ensuring a smooth and efficient loan processing experience. We keep you informed throughout the process, providing updates on the progress of your application.
Financial Planning: We offer insights into loan terms, interest rates, and repayment options, empowering you to make informed decisions. Our team provides comprehensive financial planning support, helping you understand the financial implications of your education loan and guiding you towards a repayment strategy that suits your budget.
Post-Loan Support: Our commitment to you doesn’t end with loan approval. We provide ongoing assistance throughout your loan tenure, addressing any concerns or queries you may have. Our team is here to ensure a seamless experience from start to finish.
Why Choose Key2Kred?
Our mission is to make higher education more accessible and affordable for everyone.
Expertise and Experience: Our team consists of seasoned professionals with extensive knowledge of the education loan landscape. With years of experience, we offer valuable insights and guidance to help you navigate the loan process successfully.
Tailored Solutions: We understand that each student’s financial situation is unique. Our personalised approach ensures that we consider your specific requirements and goals, offering customised solutions that align with your needs.
Efficiency and Transparency: We prioritise efficiency and transparency throughout the loan application process. Our streamlined processes and clear communication keep you informed at every step, reducing stress and ensuring a hassle-free experience.
Extensive Lender Network: We have established strong relationships with leading banks and financial institutions, expanding your access to a wide range of loan options. Our network enables us to match you with lenders that offer competitive interest rates and favorable loan terms.
Let’s Get Started:
Ready to embark on your educational journey? Contact our team today to schedule a consultation and take the first step towards securing the financial support you need for your dream education. At Key2Kred, we are committed to helping you unlock your full potential
Documents Required for Education Loan to Study Abroad
For KYC
1) PAN Card
2) Aadhar Card
For Address Proof
1) Valid Electricity/ Water/ Gas bill/ Postpaid bill
2) Voter’s ID card
3) Passport
4) House Rent/ Lease agreement
For Academic record:
1) 10th Marksheet
2) 12th Marksheet
3) Admit card proof
4) Entrance Exam result ( GRE/ TOEFL/ IELTS/ GMAT – if applicable)
5) Under Graduate result ( if applicable provide semester wise)
For Co-applicant – Salaried:
1) Salary Slips (Last 3 months)
2) Bank Account Statement (Last 6 months)
3) IT Returns/ Form 16 for last 2- 3 years
For Co-applicant – Self Employed/ Business owner/ Farmer
1) GST or ITR (Last 2 -3 years)
2) Bank account statement (Last 6 months)
3) Business Address Proof (if required
Which are the education loan subsidy schemes in India?
There are various education loan subsidy schemes in India, primarily provided by the government to support students in pursuing higher education. Please note that government policies and schemes can change.
- Central Scheme for Interest Subsidy (CSIS):
- Under this scheme, students from economically weaker sections can avail of interest subsidy during the moratorium period (course duration plus one year).
- The subsidy is available for full-time technical and professional courses in India.
- Padho Pardesh Scheme:
- Launched by the Indian Government, this scheme provides interest subsidy to students from minority communities who pursue higher studies abroad.
- The subsidy is available for education loans taken from scheduled banks under the Indian Bank Association (IBA) model.
- Dr. Ambedkar Central Sector Scheme of Interest Subsidy on Educational Loan for Overseas Studies for Other Backward Classes (OBCs):
- This scheme provides interest subsidy during the moratorium period for OBC students pursuing higher studies abroad.
- State-specific Subsidy Schemes:
- Some states in India may also have their own education loan subsidy schemes to support students. These schemes may vary by state.
- North Eastern Region Interest Subsidy Scheme (NERISS):
- Designed to encourage students from the North Eastern Region to pursue technical and professional courses, this scheme provides interest subsidy.
- Vidyalaxmi Education Loan Scheme:
- Launched by the National Securities Depository Limited (NSDL), Vidyalaxmi is a web-based portal that connects students seeking education loans with banks.
- It allows students to apply for education loans and also provides information about various scholarships and education loan schemes.
FAQs related to Education Loan:
What is an education loan?
An education loan is a financial product designed to help students and their families cover the costs associated with higher education. It typically covers expenses such as tuition fees, books, accommodation, and other related costs.
Who is eligible for an education loan?
Eligibility criteria may vary among lenders, but generally, individuals who have secured admission to a recognized educational institution for a specific course are eligible. The borrower and/or co-borrower should meet certain income and creditworthiness criteria.
What expenses does an education loan cover?
Education loans typically cover tuition fees, examination fees, hostel fees, cost of books and study materials, and other related expenses. Some loans may also cover expenses like laptop purchase and travel for studies abroad.
What is the maximum loan amount that can be availed?
The maximum loan amount depends on factors such as the course, the institution, and the lender’s policies. Generally, lenders may offer higher amounts for courses with higher fees.
What is the interest rate on education loans?
Interest rates can vary among lenders and may be fixed or floating. Government-sponsored schemes may offer lower interest rates. Additionally, the interest rates may be subsidized for certain categories of students.
When does the repayment of the education loan start?
Repayment typically starts after the completion of the course or a specific moratorium period. However, some lenders may offer a longer moratorium period for certain courses.
Is collateral required for an education loan?
Collateral requirements depend on whether the loan is secured or unsecured. Secured loans may require collateral, while unsecured loans do not. Collateral can include property, fixed deposits, or other assets.
Are there any tax benefits on education loans?
Yes, under Section 80E of the Income Tax Act, the interest paid on education loans is eligible for tax deduction. This deduction is available for a maximum of eight years or until the interest is fully repaid, whichever is earlier.
Can I get an education loan for studying abroad?
Yes, many banks and financial institutions offer education loans for students planning to study abroad. The loan amount may cover tuition, living expenses, and travel costs.
What happens if I am unable to repay the education loan on time?
If you are unable to repay the education loan on time, it may lead to penalties, late payment charges, and a negative impact on your credit score. It’s important to communicate with the lender and explore options for loan restructuring or deferment if facing financial difficulties.
Can I prepay my education loan?
Yes, most lenders allow borrowers to prepay their education loans without any prepayment charges. However, it’s advisable to check the terms and conditions with the specific lender.
How do I apply for an education loan?
To apply for an education loan you can contact us and our team will reach out to you via call/ whatsapp/ text message to explain the process/ understand your profile/ collect the documents and start the loan application process with the provider to get best interest rates for you.