Education loan

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Education loan

• Everything you need to know about the educational
  loan in India

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It was just a month back when Reserve Bank
Governor Raghuram Rajan while answering queries
about educational loans explained the role of
central bank in improving the quality of student
loans. Despite high level of defaults in
repayment of loans taken by students to pursue
higher education the governor empathises with the
students while informing the media about the
various issues and loops in the system of student
loans disbursed. Cases of students defaulting on
loan payments prompted Indian Bankers Association
to review the education loan scheme. We explore
what this means for students.
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Education loan Eligibility Loans to Indian
nationals for pursuing approved courses leading
to graduate/postgraduate degree and PG diplomas
conducted by colleges/ universities recognized by
UGC/Govt./AICTE/AIBMS/ICMR etc. Reputed
professional and technical courses are also
considered. Eligible Expenses for education loan
Fees payable, accommodation charges, exam and
library fees, reasonable expenses for books and
equipment including computer, travelling expenses
abroad and other reasonable expenses required to
complete course.
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Quantum of finance Rs. 10 lakh for study in
India and Rs. 20 lakh for study abroad. Banks may
consider lending higher amount in special cases
at their discretion. Security Upto Rs. 4
lakh No security, but in this case parents
needs to be a joint borrower Between 4-7.5
lakhs- along with parents collateral security in
form of third party guarantee Above 7.5 lakhs-
Parents to be joint borrowers tangible
collateral security of suitable value required.
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• Moratorium period for repayment
• Course period 1 year or 6 months after
  getting job, whichever is earlier
• Margin money
• Nil for loan up to Rs. 4 lakh. 5 percent and 15
  percent respectively for study in India and
  abroad on loan above Rs. 4 lakhs. Also in cases
  where your loan amount is higher than 20 Lakhs to
  study abroad the percentage is calculated in a
  margin of the required amount where the bank sets
  a ratio.

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Tenure of loan 10 and 15 years for loan
up to Rs 7.5 lakhs and above respectively.
Under section 80 (e) of the Indian income tax
act, a person can exempt the amount paid against
the interest of the education loan either for
self or for his/her spouse or children for
eight years from the year(s) he starts to repay
the loan or for the duration the loan is in
effect, whichever is more. Source
http//www.wemakescholars.com/blog/educational-loa
n-india-concerns/
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Read more on Education Loan http//www.avanse.co
m/avanse-education-loans/
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