Education Loan in India

An Education Loan EMI Calculator aids borrower in estimating monthly repayments, providing insights into the loan cost. The repayment often commencing 12 months after course completion, offers flexibility through various modes like internet banking, cheques, direct debit, and demand drafts.

Types of Education Loans

List of Banks Offering Education Loans in India

Here is the list of interest rates offered by different banks in India: 

Depending on the bank or financial institution, you can have a fixed interest rate package or a fluctuating interest rate package. Most floating rates are based on the Repo Rate, with a spread applied before the final effective interest rate is presented to you (EIR).

Features & Benefits of Study Loans

1. Loan financing up to Rs.1 crore is available
2. Loan repayment tenure is up to 15 years
3. Get education loans for studies in India and abroad
4. For abroad studies some lenders offer loan disbursals before applying for a Visa
5. Door-step service to collect required documents
6. Children of the bank's employees enjoy preferential rates at several banks
7. Certain banks offer concessional interest rates to female students
8. Enjoy a moratorium period of up to 1 year after course completion. During this period, you do not have to make payments on the loan
9. Enjoy tax benefits for up to eight years on the interest paid

List of Expenses Covered in Education Loans

Here's what the loan amount will cover:

1. Tuition fees
2. Hostel fees
3. Travel expenses passage money for students studying abroad
4. Insurance premium
5. Cost of books/equipment/instruments/uniform
6. Examination/laboratory/library fees
7. Cost of a computer/laptop required for course completion
8. Caution deposit, building fund/refundable deposit supported by institution bills/receipts
9. Any other expenses required to complete the course such as study tours/thesis/project work

Tax Benefits on Education Loans

Section 80E of the Income Tax Act provides various tax benefits to individuals in repaying education loans only. Given below are some of the benefits:

1. It is available to individuals who are paying loans for themselves, their spouse, or children.
2. You can deduct the full amount of interest paid from your taxable income.
3. The deduction can be claimed for up to eight years.
4. Only the interest paid can be deducted, not the principal.
5. It helps in lowering your taxable income, which makes it easy to manage the finances.

Courses Covered Under Education Loans

1. Undergraduate degrees
2. Postgraduate degrees
3. Undergraduate diplomas
4. Postgraduate diplomas
5. Vocational training courses
6. Skill development courses
7. Doctoral programmes

Eligibility Criteria for Education Loans

In order to avail the education loan, an individual must need to fulfil the below given criteria:

1. Loans are provided for sanctioned undergraduate programs, postgraduate programs, PhDs, diploma courses with a duration of six months or more, job-oriented courses, and technical/professional courses
2. Applicants must be enrolled or secure admissions in recognised institutions, government institutions, professional institutions, and international colleges and universities
3. For undergraduate courses, applicants should have completed 10+2 (12th standard), and for postgraduate courses, a degree is required

List of Documents Required for Education Loans

Here is an indicative list of documents that most lenders ask for:

1. Admission letter from the educational institution
2. Marksheets (previous education - school/college)
3. Age proof
4. ID proof
5. Address proof
6. Signature proof
7. Salary slips
8. Recent bank account statements
9. ITR with the income computation
10. Audited balance sheet
11. Recent bank statements
12. Proof of turnover (service tax return/sales receipt)
13. Completed application form with signature
14. Latest passport-size photographs
15. Appropriate Visa for studies abroad

Know more about documents required for education loan here

What Do Lenders Consider When Approving the Loan?

Lenders consider the following factors when approving a loan:

1. The course and institute you choose
2. The amount you need
3. Your academic performance
4. Repayment capacity of your family
5. Family assets
6. Annual income

How to Apply for an Education Loan Online

To apply for an education loan through the official bank website, follow these steps:

Step 1: Access the bank's official website

Step 2: Locate the education loan product page

Step 3: Complete the application-cum-consent form by entering your personal and contact information

Step 4: Provide your academic and financial details when contacted by the bank

Step 5: Choose between the doorstep service option for a study loan or visit the bank in person to finalize the loan approval process

How to Apply for an Education Loan Offline

 You can apply for an education loan offline by following the steps given below:

Step 1: Visit your chosen bank branch

Step 2: Request a student loan application form

Step 3: Fill out the form with personal, academic, and financial details

Step 4: Confirm loan terms with a bank official

Step 5: Submit the completed application form and documents

Step 6: Receive a formal student loan agreement once approved

Step 7: You need to wait for the bank to process the application and release the loan to your account.

Important Factors to Consider When Applying for an Education Loan

Before applying for an education loan, it is very important to look at different factors to avoid extra financial stress. These factors are given below:

1. Always check the additional charges such as processing fees, late payment fees etc.
2. If you are planning to pay off the loan early, then inquire about any prepayment fees
3. Before signing the loan agreement, carefully review the instructions.
4. Always check the total repayment amount, including any additional charges.

Education Loan EMI Calculator

The Education Loan EMI calculator is an online calculating tool designed to help borrowers calculate the monthly repayment amount for their educational loans. It generates an amortisation schedule illustrating the EMI breakdown, including monthly interest payments and the portion of the principal repaid.

The tool also outlines the total amount repaid to date and the outstanding balance, offering a comprehensive understanding of the overall cost of the educational loan. This facilitates the calculation of the total interest payable throughout the loan tenure.

How Does the Education Loan Calculator Help You?

For individuals considering or already applying for an educational loan, understanding the monthly EMI commitment is crucial. The Education Loan EMI calculator aids in assessing the monthly financial obligation, allowing borrowers to explore various interest rates and select preferred banks. This information enables effective budget planning

How to Use the Education Loan EMI Calculator

The tool is user-friendly and free of charge, requiring users to input the following details: 

1. Amount: The desired educational loan amount
2. Tenure: The preferred duration for repaying the loan, representing the EMI period
3. Rate of Interest: The applicable interest rate offered by the lending institution

By entering these details, users can obtain the monthly EMI amount, with the flexibility to adjust parameters for a customized monthly budget

Key Benefits of Using the Education Loan EMI Calculator

Key advantages of utilising the educational loan EMI calculator include:

1. Instantly provides the monthly EMI amount
2. Offers a clear overview of monthly EMI commitments
3. Facilitates budgeting and savings for financial goals
4. Illustrates the amortisation schedule, detailing paid-off EMIs
5. Provides insight into the outstanding principal for effective fund management
6. Accessible from any location and free of charge

Education Loan Repayment Process

The loan repayment period normally starts 12 months after completion of the course or 6 months after employment, whichever comes first. Applicants are given varied moratorium periods by different lenders when it comes to repaying their loans. You will be required to repay your loan using EMIs.

Different Modes of Repayment

1. Internet Banking - Pay online through the lender's website or mobile app
2. Cheque - Drop a cheque at any of the branches
3. Direct debit - Set up recurring payments for your EMI to be directly debited from your bank account on the payment due date
4. Demand Draft - Pay through a DD

The preferred method of repayment varies between lenders. Therefore, it is advisable to check with your lender when taking the loan.

Moratorium Period

In the case of education loans, the beneficiaries will be able to start paying off the loan after the completion of the educational course or after successful employment.

Part-Payment of Education Loans

The beneficiaries of education loans will be allowed to make part payments towards their loans. As an applicant, you can pay back a lump sum amount to make part repayment of the loan.

Pre-Payment of Education Loans

If an applicant is able to manage the funds for the pre-payment of the loan amount, he or she will be able to do the same. However, it should be kept in mind that this might incur a processing fee.

If money is the only thing standing between you and your professional goals, consider taking out an education or student loan to help you achieve them. You can receive collateral-free goals, which means you won't have to provide the lender with any security and your payments won't start right after graduation.

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