Educational loan is offered for students to pursue their higher education in India and also it helps to pursue in abroad. The main motive behind the education loan is to help the students to achieve their desired academic dreams. In this article, we are going to explore the interest rate for the education loan and education loan eligibility for students in India.
Education Loan in India
Generally, the bank used to offer an educational loan in India to meet the tuition fees, hostel fees, library fees, books fees, and other related expenses. This will help to pursue the specified courses in the educational institution. Moreover, banks also offer education loans for students in certain institutes abroad. In India, banks are maintaining the lists where the bank will offer the educational loan to permitted institutions and courses. So if you want to join your specific course in the desired institution, you can check within the bank list and pursue the educational loan. Usually, loan repayment tenure will be given up to 15 years and the interest rate will start from 7.30% p.a. Education loans are available for full-time courses, part-time courses, and also for working professionals.
Nowadays, the necessary documentation for education loans has been kept very simple for students. This will help to get the loan easily in a short period to avoid complexity. The main eligibility to apply for the education loan in India is that candidate should be an Indian national. Furthermore, the student should have secured admission in India or in abroad by the entrance test or eligibility test, or merit-based test. Usually, the interest rate for education loans will get differ from every individual bank.
Also, all banks used to offer different schemes for education loans. So depending upon the scheme, the loan amount also will be varied. The applicant of the age will up to 35 years for non-employed personnel whereas for working employs the age limit is up to 45 years. Moreover, our government has provided many schemes for education loans, loans for business short-term, etc. According to our needs, we can choose and utilize it. Furthermore, for this COVID crisis, RBI has announced many relief packages for education loans.
HDFC Bank – Education loan
Eligibility
The maximum loan tenure is up to 15 years and the maximum amount for education loans in India is up to 20 lakhs whereas for the abroad Rs.35 lakhs. Moreover, you can avail of an education loan up to Rs.7.5 lakhs without collateral. Eligibility to avail of HDFC education loan is that Indian resident and age should between 16 and 35 years of age. In addition, students should secure their higher course admission in a recognized institute in India/ abroad through the merit or entrance-based test. So, this will help the students to get the education loan in India/ abroad.
Different schemes and Interest rate
Education loan for Indian education interest rate for Indian courses is 9.25 % – 13.42% and the maximum loan amount is up to Rs.20 lakhs. Moreover, the processing fees are a minimum of Rs.1000 and a maximum of up to 1 % of the loan amount, which is higher. Under the central government interest subsidy scheme, interest is waived off during the moratorium period. Also, it can be availed if your annual gross income from all sources below Rs.4.5 lakhs.
The education loan interest rate for abroad are 9.25%- 13.52% and there is no upper limit for the loan amount. Also, the education loan for abroad, HDFC bank offers 950 courses across 36 countries. You can get an unsecured loan up to Rs.35 lakhs. Moreover, the loan tenure is up to 15 years.
Axis Bank – Education loan
Eligibility
An education loan can avail a minimum of Rs.50,000 at attractive interest rates and this loan will cover hostel charges, tuition fees, cost of books, etc. Also, the Axis bank provides education loans in India, as well as abroad. Moreover, Axis bank also gives the pre-admission sanction, that is sanction letter will be given before admission itself, and it will be given based on your profile.
Axis bank education loan eligibility is that students should have Indian citizenship and also secured at least 50% marks in their HSC and graduation. The education loan can avail for the students who obtained admission to career-oriented courses like for example medicine, management, engineering for graduate or postgraduate. Also, students should secured admission in India/ abroad through a merit-based selection test process. Moreover, the documents should contain the regular income of the co-applicant. So the axis bank will determine and validate the student’s profile and help the students to get the education loan in India/ abroad.
Different schemes and Interest rate
For abroad, the education loan tenure will be up to 15 years and you can unsecured loan up to Rs.40 lakhs and also multi-currency forex card for abroad. For domestic, that is education loan in India can get an unsecured loan up to Rs.40 lakhs and loan tenure are up to 15 years. Also, the axis bank offers GRE-based funding where the education loan will give based on your GRE score, and the loan tenure for this GRE is up to 10 years. Moreover, the moratorium is during the course period. Income-based funding also availing by axis bank and the loan tenure will up to 10 years. Moreover, there will be no collateral security up to Rs.7.5 lakhs.
The unsecured loan is up to Rs.40 lakhs which will be based on the income of the co-applicant. Working professionals can unsecured loans up to Rs.20 lakhs and loan tenure are up to 10 years. The interest rate for the amount up to Rs.4 lakhs is 15.20%. The interest rate of the education loan amount for Rs.4 lakh to 7.5 lakhs is 14.70%. Also, the interest rate of more than Rs.7.5 lakhs is 13.70%.
SBI- Education loan
Eligibility
State bank of India offers students loans that are available in both India and abroad. Also, you can avail of an education loan for both professional and vocational courses. Furthermore, there will be no penalty charges for the pre-payment of the loan. This can be done at any time during the loan tenure. SBI education loan eligibility should be an Indian national. The interest rate for SBI education loan is 7.95% p.a – 10.05% p.a. Moreover, that candidate should be selected via the merit test or any selection process.
Different schemes and their Interest rate
1.SBI Student Loan Scheme
Repayment will commence 1 year after completion of the course. Loan tenure will be up to 15 years after the course ends also plus a repayment holiday of 12 months. Moreover, the effective interest rate will be 9.30%, and the maximum loan amount
Processing fees
This scheme avails loan up to rupees 20 lakhs and processing fees is nil. Moreover, the processing fee for loans will above Rs.20 lakhs: Rs.10,000 (plus taxes).
Security
Loans will up to Rs.7.5 lakhs and only parents/guardians as the co-borrower. Moreover, there will no collateral security or third-party guarantee. Above Rs.7.5 lakhs, parent and guardian as co-borrower and it is tangible collateral security.
2. SBI Scholar Loan Scheme
The processing fees will be nil. Collateral will be required only for list A and list C colleges. The loan tenure will be up to 15 years after the course ends and a repayment holiday of 12 months. The interest rate of the education loan will be 7.95% to 9.25%.
3. SBI Global Ed- Vantage Scheme
This scheme is for overseas education loans for people to pursue full-time regular courses in foreign universities. Moreover, the processing fees up to Rs.10,000 per application. The loan tenure up to 15 years and it will be tangible collateral security. Furthermore, the interest rate of this education loan is 10.05%.
4. SBI Skill Loan Scheme
The repayment tenure loans up to Rs.50,000 is up to 3 years. Loans between Rs.50,000 to Rs.1 Lakhs is up to 5 years. The loan is above Rs.1 Lakh will be up to 7 years. Moreover, there will be no collateral or third party guarantee will be taken. The interest rate of this education loan is 9.55 %.
5. SBI Takeover of Education Loan Scheme
The repayment loan tenure is up to 15 years. In addition, there will be no processing fees and also hidden charges. The Quantum of finance minimum is Rs.10 Lakhs and the quantum of finance maximum is Rs.1.5 crore. The interest rate of this education loan is 10.05 %. Moreover, collateral security will be acceptable to the bank to be a minimum of 100 % of the value of the proposed loan.
Union Bank of India- Education loan
Eligibility
UBI is one of the prominent government-owned banks and offers education loans. This helps to pursue their desired studies for students in recognized institutes in India and abroad. The main eligibility to get an education loan is that candidate should be an Indian national. Furthermore, the candidate should secured admission in India or abroad by the selection qualification process. Moreover, the NRI students should have an Indian passport and also the candidate should secure admission to the course in India only.
There is no restriction about the minimum and maximum age. Moreover, the parents of the student have to compulsory join as co-applicant. In the case, the candidate is married, then the co-applicant be spouse, parents, and parents-in-law.
Benefits and Interest rate
In India, the maximum quantum of loan covered is Rs.10 Lakhs. Abroad, the quantum of loan covered is Rs.20 lakhs. The repayment tenure up to Rs.7.50 lakhs is 10 years maximum. The repayment tenure above Rs.7.50 lakhs is 15 years maximum. In addition, the moratorium period is allowed with this loan can either for the duration of the course period + 1 year or 6 months after getting the job. The effective interest rate in Union Bank of India starts from 6.90& onwards.
The security for the quantum of loan up to Rs.4 lakhs and above Rs.4 lakhs & up to Rs.7.50 lakhs – no security required, if the loan is covered under CGFSEL.
Moreover, for a loan above Rs.7.50 lakhs, the tangible collateral security of minimum value is equivalent to the loan amount. Also the interest accumulation during the course and moratorium period, acceptable to the bank. Moreover, the margin is nil for loans up to Rs.4 lakhs. Also for loans above Rs.4 lakhs, studies in India, a 5 % margin is required, whereas, for studies abroad, the margin is 15 % is applicable.
Subsidy Schemes
1. Credit Guarantee Fund Scheme for Educational Loans (CGFSEL)
The ministry of HRD has launched many central government schemes of the interest subsidies on the education loan for economically weaker sections in our society. Moreover, the eligibility to get this education loan is that the student in India should secure admission in any one of the approved courses after the XII, the professional, technical streams from recognized institutes only in India. Another important eligibility for this education loan is that students should belong to EWS (economically weaker section) along with annual gross family income not exceeding Rs.4.50 lakhs. Subsidy for loan amount up to Rs.7.50 lakhs.
Eligible for the students is for interest subsidy only once, either for the 1st undergraduate degree course or the postgraduate degree/ diploma courses in India. Students should submit proof of income from the authority that is appointed by the state government. This scheme is applicable for the disbursements from the academic year 2009. Moreover, subsidy for the course and moratorium period only.
2. Padho Pardesh Scheme
This scheme is to provide the interest subsidy on education loans for overseas studies belonging to minority communities. Furthermore, the eligibility to get this education loan in India, students must secured admission to higher studies abroad at the Masters, M.Phil, and Ph.D. levels. Moreover, the students should belong to the Economically Weaker Sections (EWS) of the minority communities with an annual gross family income not exceeding Rs. 6 lakhs. Students should submit proof of income from the authority that is appointed by the state government which helps to avail the student loan in India.
3. ACSISOBCEBC
Dr. Ambedkar Central Sector Scheme of Interest Subsidy On Education Loan for Overseas studies which are for Other Backward Classes (OBC) and Economically Backward Classes (EBC). The eligibility to get this education loan in India, students must secured admission to higher studies abroad at the Masters, M.Phils, and Ph.D. levels. Additionally, the students belong to OBC and EBC with an annual gross family income, not exceeding Rs.3 Lakhs & also Rs.1 Lakhs respectively. Students should submit the proof of income either of ITR/ form 16/ certificates which are issued from the authority that is appointed by the state government. Moreover, subsidy for the course & moratorium period only.
4. Central Government Interest Subsidy Scheme (CSIS)
The government of India introduces the CSIS scheme which is for availing education loan to students belonging to economically weaker sections in the society. Moreover, this scheme is applicable to inland studies only. Under this scheme, education loans are eligible which are sanctioned without any of the collateral security or any third party guarantee. Moreover, the subsidy is available up to a maximum amount of Rs.7.50 lakhs which is irrespective of the sanctioned amount. The annual gross family income from all of the sources should not be exceed Rs.4.50 lakhs. Additionally, students should submit proof of income from the authority that is appointed by the state government.
ICICI Bank- Education loan
Eligibility
The main eligibility to avail of education loan in ICIC bank is the student should an Indian national. Students should have completed the 10th, 12th standards and secured admission from the courses from the approved universities from India or abroad. Moreover, other expenses like student exchange travel expenses, laptop, is also covered.
Benefits and Interest rate for UG- domestic and international
ICICI bank offers an interest rate starting at 11.75 %* per annum for UG. The loan tenure without collateral is up to 5 years post-course period + 6 months. The loan tenure with collateral is up to 7 years post-course period + 6 months. Furthermore, the maximum loan amount is up to Rs.50 lakhs for domestic courses, whereas up to Rs.1crore for international courses. There is no margin up to Rs.20 lakhs. Ranging from 5 % to 15 % margins for the loan for above Rs.20 lakhs. Moreover, margins can be scholarship/ FD/ initial fee paid to the institute. Collateral- free loans for select institutes will be up to Rs.20 lakhs for UG and up to Rs.40 lakhs for PG courses.
Benefits and Interest rate for PG- domestic and international
ICICI bank offers an interest rate starting at 11.25 %* per annum for PG. The loan tenure without collateral is up to 8 years post-course period + 6 months. The loan tenure with collateral is up to 10 years post-course period+ 6 months. Furthermore, the maximum loan amount is up to Rs.50 lakhs for domestic courses, whereas up to Rs.1crore for international courses. There is no margin up to Rs.20 lakhs. Ranging from 5 % to 15 % margins for the loan for above Rs.20 lakhs. Moreover, margins can be scholarship/ FD/ initial fee paid to the institute. Collateral- free loans for select institutes will be up to Rs.20 lakhs for UG and up to Rs.40 lakhs for PG courses.
Insta Education Loan
It is a pre-approved education loan that will offer to the customers against the fixed deposit (FD), without the difficulties of any paperwork. Furthermore, these facilities and improves the convenience of the customers. So there are no longer required to visit their branch to get their respective sanction letter. So, the customers can generate their final sanction letter themselves with the help of digital channels of the bank.
Key benefits of the Insta Education Loan
Students can avail themselves, their education loan sanction letter online itself. Furthermore, the education loan comes with the tax benefits for interest paid is without any upper cap for 100% of the amount. So this will bring down the effective rate & with FD it is further reduced. Moreover, the minimum loan amount is Rs.10 lakhs for both domestic and international. The maximum loan amount is Rs.1 crore for international and Rs.50 lakhs for domestic.
Canara Bank- Education loan
Eligibility
Canara bank availing education loans for the students to pursue the desired education in India and foreign countries. Furthermore, the main eligibility to get an education loan is that candidate should be an Indian national. Another eligibility to get this education loan is that students should have completed the 10th, 12th standard. Also should secured admission from the courses from the approved universities from India or abroad. Moreover, the interest rate for Canara bank is 7.85% to 9.85% p.a.
Different Schemes and their Interest rates
1. IBA Model Education Loan Scheme
The eligibility should be an Indian national. An education loan can avail for the recognized institutes both inland and also abroad. Moreover, the margin up to Rs.4lakhs is nil, whereas above Rs.4 lakhs in India is 5 % and in abroad 15 %. Furthermore, Loan up to Rs.7.50 lakhs, there will be no collateral security. Also, the loan amount will be covered under the (CGSFSEL) Credit Guarantee Fund Scheme for Educational Loans, which is subject to the conditions.
For a loan above Rs.7. 50 lakhs there will be tangible collateral security to cover at least a hundred percent of the education loan amount. Repayment of the loan amount can pay a maximum of 15 years excluding the moratorium period. In addition, the rate of Interest up to Rs.7.5 lakhs – ongoing 1 year MCLR + 2.00 %. For above Rs.7.5 lakhs – ongoing 1-year MCLR+ 1.50%. Furthermore, 0.50%, concession in ROI for girl students. Also, there will be a 50%, concession for prompt repayment of the interest amount during the moratorium.
2. IBM Skill Loan Scheme- Education Loan
The main purpose of this scheme is to support national initiatives for skill development. The main eligibility for this scheme is to be Indian national. This scheme loan amount can be avail for the courses running by the training institutes which is aligned to the (NSQF) National Skill Qualification Framework. Moreover, there is no minimum course duration. Need-based finance is in the range between Rs. 5000 to Rs.1,50,000. In addition, the rate of interest will be on-going 1-year MCLR + 1. 50%. Margin is nil. For security, the loan amount is guaranteed jointly with the guardian/ parents of the student.
Moreover, the loan amount will be covered under the (CGFSSD) Credit Guarantee Fund Scheme for Skill Development. Also, there is no collateral or third party is required. If the course duration is up to 1 year, the moratorium is 6 months from the date of completion of the course. Also, if the course duration is above 1 year, the moratorium is from 12 months from the date of completion of the course. The repayment of the loan amount is up to Rs.50,000 is up to 3 years. Moreover, the repayment of the loan amount above Rs.50,000 and up to Rs.100000 is up to 5 years. The repayment of the loan amount above Rs.100000 is up to 7 years.
3. Vidya Turant- Education Loan Scheme
The purpose of this education loan scheme is to provide hassle-free education loans to meritorious students. This will help to pursue their desired higher education in the selected institutes like IIMs, IITs, IISc, NITs, ISBs, and other reputed institutes. The main eligibility for this scheme is that candidate should be Indian national. The rate of interest- ongoing one-year MCLR. For category institute, students of IIMs, limit up to Rs.25.00 lakhs. Also, category B institute, students of ISB, Hyderabad & Mohali limit up to Rs.40.00 lakhs.
For category C institute, all other institutions other than A & B limit up to Rs.20 lakhs. Furthermore, up to Rs.4.00 lakhs, the margin is nil. For a loan above Rs.4.00 lakhs, the margin is 5 %. Moreover, the assistantship/ scholarship will be included in the margin. Also, there is no collateral security up to limits for the institution’s designed category-wise. Moreover, education loans granted jointly with guardians/ parents and the student. The processing fees are nil. Repayment of the loan amount can pay a maximum of 15 years excluding the moratorium period.
4. Vidya Shakthi- Education Loan Scheme
The purpose of this scheme is to assist the PWD category students in pursuing the special devices courses in India. Moreover, the education loan for abroad studies will be followed as per the guidelines of the IBA Model Education Loan/ Skill loan Scheme. The main eligibility is that the student should be an Indian national with a physical disability to extent of the 40 % or more. The rate of interest- ongoing one-year MCLR (ROI is subject to change). Furthermore, up to Rs.4 lakhs, the margin is nil. Also, the margin for loans above Rs.4.00 lakhs is 5 %. Assistantship/ scholarship will be included in the margin. In addition, there is no collateral security up to a limit of Rs.7.5 lakhs.
The education loan is granted to guardians/ parents and students. Moreover, the education loan is up to a limit of Rs.7. 50 lakhs sanctioned are to be invariably will be covered under the CGFSEL. There is no processing fee. The repayment of the loan will be equated to monthly installments is up to a maximum of 15 years, excluding the moratorium period. Moreover, for the skill development loan, 3- 7 years depending upon the loan quantum.
5. Vidya Sahay- Education loan Scheme
The purpose of this scheme is to assist the meritorious students, who need the down payment to be made to CET/counseling authorities at the time of selection. Moreover, the eligibility is that students who appeared in the common entrance test which is conducted by the respective state governments, IIT, CBSE, and other all Indian examinations and also selected for counseling.
Moreover, the students should be cleared all the previous qualification exams. Also, the maximum eligible amount is Rs.1 lakhs or the initial payment as proposed by CET authorities, whichever is less. The rate of interest- ongoing one-year MCLR + 2.00% (ROI is subject to change). Additionally, the margin is nil. In addition, the processing fees are nil. Also, the education loan is granted to guardians/ parents and students. The repayment of the education loan is to be cleared after the sanction of the regular education loan.
FAQs regarding Education loan
It is a pre-approved education loan that will offer to the customers against the fixed deposit (FD), without the difficulties of any paperwork. Furthermore, these facilities and improves the convenience of the customers, so there is no longer required to visit their branch to get their respective sanction letter. So, the customers can generate their final sanction letter themselves with the help of digital channels of the bank.
The government of India introduces the Central Government Interest Subsidy Scheme (CSIS scheme) which is for availing education loan to students belonging to economically weaker sections in the society. Moreover, this scheme is applicable to inland studies only.
Editor’s Note | Education Loan
In this pandemic situation, the government and the banks have taken huge precautionary steps for the student’s and the parent’s safety. Nowadays, some of the banks have implicated to get the education loan online itself. Moreover, in this COVID crisis, the government has announced some relaxed packages regarding education loans.
RBI has announced some relief measured for the customers for repaying terms loans during this period. Also, RBI has permitted the banks and financial institutions to extend further the moratorium for all the payments. So for further information, you can enquire the bank. The above-given information has been gathered from various sources. So, if you want to get in detailed information, kindly refer to the nearest banks. Kindly make sure, that the loan which you are acquiring is within your reach. Our government has provided many education loan schemes for students in India. So we have to choose it wisely and utilize according to our need.
