Education is the passport to the future, for tomorrow belongs to those who prepare for it today.
Education is the passport to the future, for tomorrow belongs to those who prepare for it today.
One of the dreams of every parent is to provide the best education to their children so that they can have a bright and successful life ahead. Indian parents are very keen about higher education of their children. Education is a costly affair so parents start to save money as soon as they are blessed with the child.
Due to inflation, there is a rise in the cost of education every year. Because of this, there may be a chance of difference between the saved amount and the actual cost of education. This gap can be filled with the help of “education loan”.
Education loan is kind of debt or money borrowed to pay for higher education with a promise to repay the borrowed money in future.
Many financial institutions are providing educational loan to help students looking to attain higher education from India or abroad.
Below is the current cost of different courses in India and abroad: –
| Course Name(Private Institution) | Cost in India (Average) | Cost Abroad(Average) |
|---|---|---|
| MBA | 10 Lakhs | 50 Lakhs |
| MCA | 10 Lakhs | 70 Lakhs |
| MBBS | 25 Lakhs | 60 Lakhs |
| B.E | 10 Lakhs | 45 Lakhs |
P.G | 8 Lakhs | 30 Lakhs |
Financial institutions like banks and NBFC’s lend money to students to pursue their higher education from India. These are unsecured loans. The loan amount can be used to pay for various expenses such as tuition fees, books, living expenses etc. Repayment of the loan can be done after completing the education.
This type of loan can be availed by students who wish to complete their higher education from abroad. Loan amount required for completing higher education from abroad is higher as the cost of education is more. Repayment of the loan can be done after completing the education.
Courses which are covered under educational loan: –
Many financial institutions are providing educational loan to help students looking to attain higher education from India or abroad.
Education loan interest rate is very competitive which varies from 9% to 15%.
Education loan amount varies as per the type of loan. Students who want to study in India can obtain an education loan up to 15 lakhs. Students who wish to pursue their higher education from abroad can avail up to 50 lakhs.
Education loans are unsecured and secured in nature depending upon the loan amount. If the loan amount is higher than lenders will ask for collateral, if the loan amount is less than Co-borrower with good income is will be sufficing.
The education loan comes with a loan tenure of 5 to 7 years which means that loan amount can be repaid during this term. It is always advisable to opt for the lower term so that you can repay the loan quickly and less interest will be paid over the term of the loan.
Repayment terms and conditions for education loan is very flexible. Lenders provide enough time to repay the loan. Borrowers can repay the education loan after completing their courses.
As the cost of education is increasing day by day due to high inflation, it becomes difficult for the parents to afford the cost of higher education. The education loan can help the parents to provide the best education to their children so that they can have a bright and successful life ahead.
Below are some benefits of education loan: –
Eligibility for education loan differs from provider to provider however below is the generic information.
Eligibility Criteria
| Age | 18 years to 35 years |
| Nationality | Indian |
| Academic Record | Good |
| Admission Status | Confirmed |
| Co-Applicant | Required with stable income |
| Security | Collateral required depending on the loan amount |
Documentation for education loan is simple however the proper understanding of what documents are needed will help you to get the loan with ease.
Below is the guide for the documentation for the education loan:-
