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What are educational loans?
Educational loans are loans provided by lending institutions for students to pursue their education in India or abroad. Certain banks provide these loans under personal loans but a higher rate of interest is charged.
What are the different kinds of educational loans provided? |
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Educational
loans are available for undergraduate and for postgraduate courses. Educational
loans are usually provided for professional, technical and vocational fields. An
illustration of the courses for which loan will be provided is given below:
- Under-graduate courses like
schooling
- Certificate, Graduate courses
and Design courses
- Postgraduate courses in engineering,
medical, management and others
- Diploma courses in engineering.
Every bank has its own approved list of courses and institutions for which it provides
loans
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What are the eligibility criteria for these loans?
Each lender has
a certain eligibility norms:
- Age: You are
eligible for a loan if your age is between 16-30 years. In the case of a minor,
the loan will be available in the name of your parents or guardian(s).
- Academic Record:
Your academic record should be good. These loans are generally granted to students
who score above 60% in their final examination. This is however at the sole direction
of the lender.
- Parents and guardians:
Income is taken into consideration. Generally it is one-third to half of their
income or the loan amount required by you which
ever is lower.
- Colleteral security:
LIC policy or shares etc are to be provided for the loan amount.
- If you are already employed
and required a loan to fund higher studies to improve your skills then the same
can availed of. Your loan amount will be calculated on your income.
Guarantors:
Some banks also ask for one or two guarantors to guarantee the amount taken as a
loan.
What expenses are covered under educational loan?
The loan
generally amount covers :
- Course fees
- Cost of books and instruments
- Hostel accomodation
- Equipment charges
- In case of studies abroad then,
one way travelling fare is covered.
- Examination fees
Any other charges payable to the institution.
What are the other charges applicable?
- Processing Fee: A charge ranging between
0.25% and 2% is levied
- .Prepayment penalty: This charge
is applicable when the loan amount is returned before the agreed period. This charge varies from one
lending institution to another.
For how loan can an educational
loan be availed?
Educational loans are generally available for 1-8 years. Loans of this nature
but termed underd personal loans are available up-to 5 years.
What is the maximum loan amount available for educational loans for studies
in India?
Loans are availble upto Rs 7.5 lakh for studies in India. Financing limit margins
vary between 5-30%. For smaller loans amounts lenders provide 100% financing. >
What is the maximum loan amount
available for educational loans for abroad?
Lending institutions provide as much as 15 lacs for education abroad. Financing
limit margins vary between 5-30%. For smaller loans amounts lenders provide 100%
financing.
What are the documents
required?
- Application Form
- Admission note
- Copy of passport/Visa of the
student
- Residential Proof
- Income Proof of parents or
guardians like IT Returns, Salary Slip, Bank Statements for last 6 months
- Proof of age
- Proof of business
- Length of business/employment
- Academic record of the student
- Details about the student's
course schedule
- Collateral Security documents
like share, insurance, property papers
Signature verification
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