The greatest method to pursue higher education without disrupting your finances is an education loan. For courses in India or abroad, you can obtain a student loan. Parents or guardians must serve as guarantors for students who are unemployed.
You may determine the monthly payment required for your education loan by using an EMI calculator. You can run this as many times as you like to enter the interest rates provided by several banks and see which one best fits your spending plan. Therefore, using an EMI calculator can be quite useful in selecting the best lender.
The ideal student loan for your needs may be found by researching the most recent interest rates on school loans offered by the largest banks in India. Several factors have an impact on the interest rate on these loans. Knowing what they are and how to calculate your student loan EMI will help you better manage your finances.
Education loan: A list of the courses covered
- Lower grade to grade 12.
- Courses leading to graduation and post-graduation (technical, professional, and diploma programmes) offered by universities and institutions recognised by the government, IMC, AICTE, and UGC.
- Regular degree/diploma programmes run by independent universities like IIM/IIT, etc.
- Regular degree or certificate programmes certified by the Director General of Civil Aviation, the Director of Shipping, or another regulatory body, including pilot training, aeronautical, shipping, and more.
- Courses offered by reputable educational institutions for graduation, post-graduation, and diploma that are career-focused (professional or technical), such as MBA, MCA, and MS programmes, as well as courses offered by the Chartered Institute of Management Accountants (CIMA) of London or the Certified Public Accountant (CPA) of the USA.
Education loan: Determiners of EMI
- The loan’s interest rate
- Loan amount
- Term of Repayment
Education loan: Factors to take into account
- Courses that qualify for the loan
- Whether any collateral is required
- A guarantor is needed
- Interest rate on the margin
- Sum borrowed
- Period of repayment
Education loan: Eligibility requirements
- Indian citizen
- Age: Up to 35 years old for those who are unemployed and up to 45 years old for those who are employed.
- Evidence of enrollment in the college or university
- Valid academic transcripts demonstrating a strong academic record (of more than 50 percent marks)
- Income or credit history evidence for the guarantor
- Passport, I-20 form, and visa if studying abroad
Education loan: Documents needed
- Complete application form with appropriate passport-size photos attached
- Admission letter printed on the institution’s letterhead
- the applicant’s academic transcripts
- Mark papers from any admission exams Scholarship documentation, if any
- Assurance that you have not gotten a loan from another lender
- Identity documents like an Aadhaar card, a passport, a licence, a Permanent Account Number (PAN) card, etc.
- Proof of address or residency documents include utility bills, ration cards, passports, and Aadhaar cards.
- Using a birth certificate or 10th grade certificate as proof of age
Education loan: Benefits and features
- Available loan funding up to Rs 1 crore
- Duration of loan payback is up to 15 years.
- Get loans for education to study in India and abroad.
- Some lenders permit loan disbursement prior to visa application.
- service to gather necessary paperwork at your door.
- Several banks provide favourable rates to workers’ children.
- Some banks provide female students with discounted interest rates.
- Enjoy a moratorium period of up to a year following the conclusion of the course.
- You are not required to make loan instalments during this time.
- Enjoy tax advantages on the interest paid for up to 8 years.
Education loan: Interest rates
The bank determines the interest rate for student loans. Throughout the loan payback period, some banks provide a set interest rate. Others have interest rates that are linked to the Lending Rate based on the one-year Marginal Cost of Funds (MCLR). The interest rate of the student loan may change if this were reset at regular intervals.
Education loan: Interest rates offered by different banks
| Bank | Loan amount | Education loan interest rates |
| Axis Bank | For amounts up to Rs 4 lakh
Loans beyond Rs 4 lakh and up to Rs 7.5 lakh More than Rs 7.5 lakh |
15.20%
14.70% 13.70% |
| Canara Bank | Vidya Turant Loan Scheme
to Rs 4 lakh from Rs. 4 lakh to Rs. 7.50 lakh Beyond Rs. 7.50 lakh |
6.60%
10.40% 10.40% 10.20% |
| HDFC Bank | Minimum APR
APR maximum Average APR |
9.00%
13.86% 11.57% |
| Kotak Mahindra Bank | For all loan kinds and sums | 11.5% to 24% |
See also: Maharashtra Mahadbt scholarship programme
Education loan: Applying for student loan online
- The simplest and most practical method of applying is this one. There are two ways to submit an online application. The first is a simple online application form that you fill out, attach the required paperwork, and submit.
- The second scenario is where you apply by submitting all the necessary information, and the lender contacts you to go through the loan’s conditions before moving forward with the application.
Education loan: Applying for student loan offline
- Visit a Branch: You may apply for a loan in person by going to your local branch with the required paperwork, talking to a representative about the conditions of the loan, filling out the application, and submitting it.
- Contact the Lender: If you’re interested, you may either call the lender or ask for a callback. After that, you can negotiate the loan’s conditions and submit an application.
Education loan: Costs paid for by student loans
- Hostel costs Tuition for classes, lab, and library fees
- Book, uniform, and project costs, etc.
- Travel costs for studying abroad; deposits needed by the institution of higher learning
Education loan: Process for repaying student loans
Normally, the loan payback term starts 6–12 months after you graduate from your programme or, whichever occurs first, when you get a job. Varying lenders grant different moratorium periods to borrowers when it comes to loan repayment. Your loan will need to be repaid in EMIs.
- Online payments made using a mobile app or website for the lender.
- Drop a check off at any branch.
- Set up regular payments using direct debit to have your EMI taken directly out of your bank account on the due date.
- Use a DD to make a payment.
Education loan: Tax benefits
Section 80E of the Income Tax Act of 1961 allows you to deduct interest paid on student loans. Solely individual borrowers are eligible for this benefit, which is only provided for higher education. Every topic of study, both locally and abroad, is eligible for the deduction. It offers both academic and practical courses. It’s critical to keep in mind that only the interest component of the EMI qualifies for the tax deduction; the principal portion does not. However, there is no cap on the number of times you can use this advantage. To be eligible for this benefit, you must present a document from your bank or other financial institution that shows how the principle and interest components of your EMIs are separated.
Education loan: Calculator for educational loan EMIs
Use the Education Loan EMI Calculator to determine your monthly payments and the total cost of the loan before you apply for one to determine how much you can borrow. To determine an estimate of your comparable monthly payment, enter certain loan-related information, including the loan amount, length, interest rate, and processing fees (EMI). Important details include the total interest payable and an exhaustive amortisation chart that divides your EMIs into principal and interest payments on a monthly and annual basis. Most lenders let you partially prepay your debt once every year. Use the calculator to estimate how much money you’ll save on interest and how long it will take to pay off your debt if you decide to make such payments.
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