Information about student loan in India

Do you think banks necessarily provide appropriate information about student loan in India? A profile of good and quality education would be and is essential for every student to lead a successful life. There has been a sturdy rise in the cost of education in India, with over 250 million school-going students. 

You can never tell beforehand as to when you’d face a shortage of money. Education provided at some institutions can be very costly, which leads people to resort to education loans. 

This article would cover a general guide to these topics which would give you an idea regarding information about student loan in India - 

• Expenses covered under education loan
• Who can avail of the student loan
• Who is approved for a student loan
• Courses offered by student loan
• Documents required for student loan

Expenses Coverage 

The expenses covered under education loan for studying in India are - 

1. Accommodation fees
2. Tuition fees
3. Library fees
4. Exam fees
5. Expenses for books, instruments, uniforms, etc.
6. Refundable/caution/security deposit

For students wishing to study in foreign universities/schools, the expenses covered are - 

1. Tuition fees
2. Accommodation fees + Living fees
3. Health Insurance
4. Travel expenses
5. Other expenses like PCs, instruments, books, etc.

Who can avail the student loan?

A student is always the borrower/application while a parent, sibling, or guardian is a co-applicant.

Who is the loan approved for?

The loan is approved for those students who wish to study in India or even overseas.

What are the courses offered?

There is an approval of courses offered by student loan, that is regular/ full-time, correspondence/part-time, vocational, UG or PG. 

What are the documents required?

The documents for the student who is approved for a student loan differ for those who wish to continue studying in India itself, and those who wish to study overseas. 

For admission in India, the documents required for student loan are - 

1. Application form
2. 2 passport size photographs
3. Passing certificates
4. ID proofs for age and address verification (ADHAAR, PAN card, Passport, Voter’s ID or Driving License)
5. Signature proof
6. Income proof

For admission overseas, the documents required are - 

1. Application form
2. 2 passport size photographs
3. ID proofs for age and address verification (ADHAAR, PAN card, Passport, Voter’s ID or Driving License)
4. Proof of admission to the university/school
5. Expense schedule (tuition fee, accommodation, etc.)
6. Scholarship letter, if received
7. Bank account statement of last 6 months
8. Proof of source of margin

Collateral, Interest Rate, and Repayment

Some banks do not claim any collateral for a loan up to 4 lakh, while some offer loans without collateral for up to 7.5 lakh. The interest rate for these loans vary. The average rate in 2021 is 8.40% onwards, with the minimum loan period to be 5 years and the maximum to be 15 years. There is a repayment holiday (moratorium period) of 6 months to 1 year to help students get a job/internship to pay back the loan.

When you set foot into any secondary education arena, you always have a dream school or college. But, it’s not necessary that you’d have financial help with you, which is when you take aid from banks. Information about student loan in India is given to customers in a long written form, which makes it confusing. This article would help you resolve this issue.