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What Is Education Loan Procedure And Its Benefits For Students?

  • Highlights

  • An easy education loan can help you meet all your costs

  • It covers expenses like course fees, travel, stay, and others

  • Education loan has a moratorium period & repayment holiday

  • Education loan offers tax benefits under Section 80C

In 2016, the average education inflation in India was at 10% to 12%, and these expenses are increasing at a fast pace even today. However, skyrocketing education costs need not become a roadblock in seeking quality education yourself or providing it to your children. Whether you are eyeing a reputed university in the country or a college overseas, you can get an education loan and realise your dreams without any compromises.

Many lenders offer education loan in India for study abroad too. The student loans for studying abroad fund a wide variety of graduation or post-graduation courses whether full-time, part-time or vocational, in almost all the fields that you could choose. Here’s more about an education loan and its benefits.

Benefits Of An Education Loan

  • An education loan keeps you from dipping into your savings and disturbing other financial goals such as home purchase, children's wedding, or retirement.

  • The loan amount covers more than just the course fee; it also covers other expenses related to examination, books, laboratory, hostel, travel and more.

  • An education loan offers tax benefits towards interest paid on it under Section 80E of the Income Tax Act. You can claim this deduction for up to 8 years.

  • An education loan has a moratorium period that refers to a holiday before which you start repaying the loan. As a borrower, you will get a moratorium period between 6 months to 1 year starting from the date of completion of a particular course. In this period, you can secure a well-paying job and save enough to start repaying the loan.

  • Timely repayments of the loan enhance your credit score, which, in turn, helps you get other loans easily.

Now read more about how to get an education loan in India so as to realise your dreams conveniently.

Also Read: How to Apply Online For A Student Loan in India

How To Get A Study Loan?

The procedure to apply for an education loan varies across lenders, however, these are the common steps.

  • Check the lender’s eligibility criteria that may be relating to your residential status, age, academic level, and others. Work on shortcomings, if any, and only then apply for a loan by submitting a duly filled application form.

  • Next, you will need to attend a personal discussion with the lender where you may have to answer questions relating to your academic performance, the course that you want to study, the institute where you want to study, and others. The lender may also question you about the course’s potential of generating income as it directly impacts your loan repayment ability.

  • In case of education loans, lenders demand an offer letter from a university as a primary document. In addition to this, depending on the lender, you may also have to pledge collateral if your loan amount exceeds a certain limit.

  • If you are a student, lenders will require you to add a guarantor, which may be your parents or guardians. The lender will then check their credit score and history and only then decide whether to approve the loan or reject it.

  • If you are a student and the primary applicant for the loan, the lender will ask you to sign a promissory note of repayment to them.

  • Finally, if the lender is satisfied, they will ask you to submit additional documents and post-dated cheques before disbursing the loan.

Now that you know how to take education loan, you may realise that certain restriction do apply to this loan category. Whether you are looking for an education loan for MBA abroad or want to study fashion design in India, you can also fund your education by availing a loan against your property. This way, you can get access to a high sanction depending on your property value. Also, since it is a secured loan, lenders charge comparatively lower interest rates than secured loans.

Consider applying for a Loan Against Property with reputed lenders like Bajaj Finserv to access up to Rs.3.5 crore via quick approval thanks to the simple eligibility criteria and minimal documentation. The money is disbursed directly to your bank account in just 4 days by Bajaj Finserv so you can meet urgent education costs with ease. You can also avail this loan on easy terms to make multiple withdrawals in order to meet recurring education expenses each term and pay interest only on the withdrawn amount. To enjoy customised deals on loans and other financial services, check you offers from Bajaj Finserv and finance your dream education with ease.

 
 
 

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