Taking an educational loan is absolutely a way worthy students can pay their college tuition and later on pay all that amount back. Even though the process is not that easy it definitely has some more perks over personal loan.
Fulfilling the eligibility criteria is the first step to be taken for applying for an educational loan.
Eligibility Criterias to be fulfilled
You must be an Indian National, first and foremost to apply for an educational loan
Educational loan cannot be availed by an individual aged above 35 years of age. If you are 18 years old you can apply for an educational loan. Or your parents apply for your educational loan.
Applicants must have confirmed admission under UGC, AICTE, Government of India, Appropriate Authority.
Applicants must have scored at least 60% in their previous qualifying exam to avail a educational loan in India
While every bank has their own Process that they carry out, there are some that are the same for most.
The Loan Application
You are required to fill in the form with documents such as your passport sized photo, graduation, secondary or high school marksheet, KYC documents, signature proof, parents income proof, and documents for collateral.
If you’re an applicant applying to study ABROAD
You will be asked for two passport sized photos, KYC documents, marksheets and certificates of last qualifying exam, residence, and age proof. You’ll also be needing various more documents such as
- Bank statements for last 6 months
- If you have any scholarship letters a copy of that
- Last 2 years of income tax assessments of guardians, parents or borrowers
- Applicants migration proof along with collateral
After the application form is done with, you will be required to have a personal discussion with a bank employee,
where they will ask you various questions regarding your academic performance, about the subject you have opted for, and probably the institute also.
Applicant’s Supporting Documents
Following the previous process, an applicant is required to deposit some supporting documents for his/her loan to be granted. Along with documents verifying your admission in the concerned educational institute. Accordingly, you may be required to give your documents relating to collateral security.
Approval of Loan
Since a guarantor is mandatory for approval of a loan, it can be your parents or your guardian. The bank runs through the credit details of the guarantor before approval of loan. After this entire process, the bank can either approve or deny loan.
Payment of Loan
Once everything is in order, the bank will make the payment of the loan to the concerned educational institution.
SBI student loans
SBI is one of the best banks in India providing loans to students. It has been able to recognise varied types of student needs, catering to which it has formed 4 types of student loan plans.
SBI Education Loan
a loan catering to students seeking admission in leading institutes of India such as IITs, NITs, IIMs, AIIMs, and many more prestigious institutes in the country. Sanctioned loan amount goes upto 30 lakhs.
Global Ed Vantage
Sanctioned loan amount ranges from 10 lakhs to 20 lakhs. This plan caters to students joining regular programmes in foreign universities and colleges.
An education loan by SBI catering to students pursuing higher studies in India or Abroad. Loan allowance to study in India is upto 10 lakhs, whereas for abroad it can go upto 20 Lakhs.
There are many students opting for vocational training and SBI cares for them too.
This plan is also for students with secured admissions into training programmes in Indian Institutes.
These are the various kinds of loans available under SBI, every loan plan has a separate eligibility criteria to meet. Which an applicant will be required to full-fill step by step.
ICICI Education Loan
One of the significant factors of ICICI Education Loan is that it has the same starting interest rate for both individuals applying for domestic and international institutions.
Students applying for UG/PG courses in Indian Institutions have the following in their plan
- Loan Tenure without Collateral – for PG courses – upto 8 years post course period additional 6 months
For UG courses – upto 5 years post course period additional 6 months
- Loan Tenure with Collateral – for PG courses – upto 10 years post course period additional 6 months
For UG courses – upto 7 years post course period additional 6 months
- Maximum Loan amount for both – 50 Lakhs INR
- Starting interest rate – 11.5%
There are few more specifications to keep in mind. But these for the basics.
Students applying to international institutes must be aware of these specs
- It is pretty much similar to domestic institutions other than the Loan amount being upto INR 1 crore.
Non -Tuition Expenses
ICICI understands that merely paying college fees isn’t enough therefore there are several non – tuition expenses that ICICI caters to while loaning out. Such as Exam fees, library and lab fees. Along with hostel fees, travel expenses, and passage money for overseas studies. Books, equipment and uniform expenses are also covered by funds provided by ICICI.
If a student is required for a computer to complete the course, ICICI will see to it too. Along with institutional bills and project work expenses. In all, if there are any such expenses that are needed by the student ICICI will try to fund it.
Is there an Educational Loan in India with 0% interest?
Simply no! But there still are alternatives for low interest rate or nearly 0 interest, loans or to say scholarships available to help students out.
Since Educational Loan is a non-secured loan, the interest rates on it are usually higher compared to home loans, etc. There are many such foundations that provide students with scholarship opportunities such as TATA Trust, KC Mahindra Trust, etc.
This article has attempted at answering most asked questions. Applying for a loan isn’t very easy. And needs patient speculation of a lot of factors. Make sure to have enquired enough before taking a decision. Lastly, all the best for your future.