How To Get Approved For A Student Loan
Quality education is paramount for all individuals and students do their utmost to achieve this. However, the cost of education has been rising recently, and choosing an education loan seems to be the best option.
An education loan is a loan that students require to meet the financial requirements to complete a course. Many Indian banks and NBFC offer competitive interest rate education loans to help educate prospective innovators and leaders.
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Features And Benefits Of Student Loans
- Education loans are available for both study in India and abroad
- The maximum amount of credit that can be used is 1 crore
- The repayment period is up to 15 years
- Interest rates start at 7.30% per annum
- The duration of the moratorium is a maximum of 1 year after completion of the course or 6 months after obtaining the position
- Special discounted rates for female students
- Unsecured loans / without third-party guarantee up to Rs 7.5 million (USD 9400) from larger banks
- Eligible collateral includes residential or commercial real estate, insurance, time deposits
- Affordable Balanced Monthly Installment (EMI) Refund Options
- 80-E of the Income Tax Act. tax benefits on interest paid under the section.
- For some lenders, the loan can be disbursed before you are granted entry or apply for a visa
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Types Of Educational Loans
Based On Location
Students who want to study in India can apply for this type of loan. The loan will only be approved if the applicant is admitted to an Indian educational institution and meets all other creditor criteria.
Such loans help students realize their dreams of fulfilling their aspirations at a foreign educational institution. Loans cover airfare, accommodation, and tuition for students wishing to study abroad only if they meet the eligibility criteria.
Based On The Course
This type of education loan is provided to students to provide financial support students to complete their undergraduate degrees. This loan also supports students to study abroad. They can easily apply for a study abroad educational loan. The undergraduate degree is usually a 3-4 year course in a variety of disciplines. Obtaining a university degree helps individuals find a decent job and start looking for it.
Many undergraduates would like to pursue their studies with a postgraduate course, usually a 2-year course in India. A higher education degree is desirable to gain deeper knowledge in the field of interest.
Many professionals who work for several years in a corporate workplace prefer to suspend their careers and attend specialized courses and training to improve their work prospects. Such individuals work hard to advance to higher levels of their careers by enrolling in reputable business and technical schools to hone their skills.
Fortunately, there are loans to help students fund their education, realize their potential, and reach their goals. The Reserve Bank of India (RBI) has adopted an education loan scheme aimed at providing financial support to all planned commercial banks in India for students worthy of pursuing higher education in India and abroad on affordable terms.
Based on Collateral
You can mortgage real estate, such as farmland, residential land, housing, houses, and more, time deposits, recurring deposits, gold deposits, bonds, notes, and stocks, to obtain the funding you need to continue your education.
A letter of guarantee from an employee of a bank or home bank can help a student obtain an educational loan.
Education Loan Eligibility
Banks typically check the following criteria for approving a student loan:
- The applicant must be an Indian citizen
- Applicants must be 18-35 years old
- Applicants must have a good academic background
- Applicants must be admitted to a recognized university/institution
- Courses eligible for educational credit are usually provided by banks.
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Documents Required For Student Loans
Lenders usually require the following documents:
- Properly completed credit application form
- Fresh photo of the applicant and co-applicant
- Age proof Photo ID (PAN / Aadhar / License / Voter ID)
- Photo ID (PAN / Aadhar / License / Voter ID)
- Address proof
- Certificate of signature
- Admission certificate (Admission letter with fee interruption)
- Scoring sheet (10/12/ graduation/GRE/TOEFL/IELTS, whichever is applicable)
- Proof of income (co-claimant)
- Bank statements for the last 6 months
- Income tax return for the last 2 years with income calculation
- Audited balance sheet for the last 2 years
- Proof of turnover (service tax return/sales note)
- Security documents
How To Get Approved For a Student Loan
Most banks provide education loan details on their websites. However, it is advisable to call the bank and discuss the details with the bank representative. We recommend that you apply for a loan as soon as possible, as the entire loan application, approval, and payment process can be time-consuming.
Compare student loans from different banks before choosing a lender. The courses covered by the loan are not the same for all banks, and the amount of the loan is different. Loans are available for both full-time and part-time training. Surveys and comparisons will help you choose the most appropriate one.
You can fill out the application form online with all the required documents attached. Then submit it online. Some banks may also offer a virtual assistant to assist you in the application process.
This can be done by going to the nearest branch office with all the required documents and a properly filled out application and applying directly.
After the loan is approved, the bank issues a credit document that contains the various elements of the loan. After signing the credit document, the bank pays the amount in installments or at the request of the institution/university.
How to Apply For a Student Loan
You can visit the bank of your choice to inquire about the credit process or apply online. After submitting a loan application, the bank begins the process by reviewing the documents, training to receive the loan, and evaluating the collateral. After that, the bank will continue to provide you with information.
Important Considerations Before Applying For a Student Loan
Loans are borrowed for the purpose of paying back with interest. Therefore, there are inherently some risks involved. Failure to make payments on time and defaulting on a loan can create an unfavorable credit score and make it difficult to use other loans in the future.
When applying for a student loan, keep the following in mind:
- Go to essential career counseling to get a better understanding of careers in different areas
- Choose a reputable university
- Research income and educational requirements in various research fields
- Choose a degree that will lead to a job that earns enough to repay the loan
- If possible, pick up less than they offer. Think of debt in terms of future income and expenses. Therefore, monthly installments will be lower in the future count.
Tax Implications For Student Loans
The amount of interest paid on an education loan can be deducted from the total taxable income without an upper limit under Section 80E of the Indian Income Tax Act. Tax incentives are billed for up to eight years from the year interest payment begins. After 8 years, tax credits will not be allowed.
Please note that tax incentives do not apply to principals. Higher education covers all areas of study pursued after passing secondary education or equivalent exams and includes both regular and vocational courses.
Therefore, education loans received for higher education on behalf of an individual, individual child or spouse, or student’s legal guardian are subject to tax incentives on interest paid.
In addition, according to the new tax law on remittances from India funded by education loans, only 0.5% of TCS (tax withholding) applies to amounts over Rs 70,000 ($ 9,400).
Benefits Of Education Loan In India By Govt
Student loans are amounts borrowed from state or private creditors to fund graduation, graduate education, or other higher education research. Government loans usually have low-interest rates and can be repaid after a period of time or after students start earning a certain amount.
Student loans are best received. It is considered a good liability as it is an investment in education that will be rewarded in the future.
Students can focus on their research without worrying about their finances with the help of a good student loan.
In addition to funding for education, taking an education loan in India by Govt. can build a good credit score if payments are made on time.
A good credit score will make it easier to get other loans such as mortgages and car loans in the future.
Frequently Asked Questions (FAQs) How To Get Approved For A Student Loan
What if I don’t repay my student loan in India?
If you do not pay your education loan in India, the lender will send notifications to you and the guarantor (if any). If you do not follow the warning, you will default on your loan and your creditworthiness will be severely affected. You will not be able to secure credit in the future.
Can I borrow a student loan if I fail?
If you make a loan and fail, the interest service is already taken care of by your parents, so banks are usually not worried. In most cases, the loan amount will be paid directly to the university / educational institution. Therefore, if admission is canceled, the loan will be terminated.
Can I take 2 education loans?
Now, the answer to the above question is yes, students can qualify for a secondary education loan. This allows them to apply for a second education loan from the bank that already borrows the first loan, or to another bank.
How to get approved for a student loan