Education Loans Education is the right of every of individual but with the passage of time education is becoming costlier.

This has shattered the dreams of many young bright who wish to undertake higher studies as they lack funds to sponsor their education. But with the advent of education loans, higher education is not a distant dream. A student who lacks fund to sponsor his /her education can go for education loans provided he/she fulfils certain eligibility criteria. In India education loan is being provided by several reputed financial institutions. For a student to be eligible for an education loan, the course (graduate or postgraduate course) that the student is undertaking must be approved by the central or state government or by a foreign university. Eligibility criteria : Basics Some of the basic criteria that one must fulfill to be eligible for a education loan: Must be an Indian citizen Must be selected to the course through an entrance exam of India or abroad or any other selection process. Some banks also have an age criteria of 16 to 35 years or specifying the marks secured in the last examination.

Security and Margin Loan Amount

Up to 4 lacs Above 4 lacs and up to 7.5 lakhs

Security

Loan above 7.5 lacs

Not required Collateral in satisfactory guarantee. Co obligation of parents Same as above together with tangible collateral security .Collateral security in the form of NSC /KVP/ LIC Policy/ Gold/ Shares/Debentures or immovable properties, Bank Deposits in the name of student/ Parent/Guardian or any other third party with suitable margin. Wherever the land/ building are already mortgaged the unencumbered portion can be taken as security on second charge basis provided it covers the required loan amount.

Margin Nil the form of Studies in India 5% third party Studies in abroad 15%

Quantum of loan amount There is a maximum limit of education loan of Rs 10 lacs in India and Rs 20 lacs for students studying abroad(may vary for different banks). The loan would cover tuition fees, hostel fees , security fees, books ,uniforms etc .But this may vary from bank to bank and a student who wishes to take an education loan must confirm it before taking a loan. Tax benefit Education loan holders also avails a tax benefit under Section 80E of the Income Tax Act. The interest paid towards the education loan of self or any relative ( for whom the individual is a legal guardian ) is liable for tax benefit. However the term of the loan should not exceed 8 years as after that the tax benefit would not be applied on the interest payment. Some of the banks offering education loans in India State Bank Of India

Amount of Loan

For studies in India, maximum Rs. 10 lacs Studies abroad, maximum Rs. 30 lacs

Interest rates Loans upto 4 lacs -3.50% above base rate, currently 13.20% p.a. Above 4 lacs and upto 7.5 lacs - 3.75% above base rate, currently 13.45% p.a. Above 7.5 lacs-1.75% above base rate, currently 11.45% p.a.

*(0.50% concession in interest for girl student) * (1% concession for full tenure of the loan, if interest is serviced promptly as and when applied during the moratorium period, including course duration). Processing Fees

No processing fee/ upfront charges Deposit of Rs. 5000/- for education loan for studies abroad which will be adjusted in the margin money.

Repayment period Place of study India Abroad Loan amount Rs 10.00 lacs Rs 30.00 lacs Repayment period 5-7 years 5-7 years

Indian Overseas Bank ( Vidya Jyoti) Amount of Loan

For studies in India, maximum Rs. 15 lacs Studies abroad, maximum Rs. 25 lacs

Interest rates Loans upto 4 lacs -12.25% Above 4 lacs and upto 7.5 lacs 13.50% Above 7.5 lacs-13.25%

Repayment period Repayment starts 6 months after getting a job or 1 year after the completion of the course whichever is applicable earlier and the loan should be paid in EMI within 5-7 years excluding the period of study. Bank of India

Amount of Loan

For studies in India, maximum Rs. 10 lacs Studies abroad, maximum Rs. 20 lacs

Interest rates

Upto Rs.7.50 lacs 3% above Base Rate, Above Rs.7.50 lacs 2.50% above Base Rate *Int. Concession of 0.50%p.a. for woman beneficiaries for limits up to Rs.50,000/- and 1% for limits over Rs.50,000/*For Professional courses (like Engg./Medical/ Management, etc.) int. concession : 0.50% *1% concession for full tenure of the loan, if interest is serviced promptly as and when applied during the moratorium period, including course duration.

Processing Fees

No processing fee/ upfront charges For studies abroad, foreign study letter of sanction can be issued for obtaining VISA upon recovery of processing charges of Rs 1000 and this amount is refundable when the actual loan is availed. Any deviation from the scheme norms including approval of courses outside the approved is liable for one time charges as mentioned below: Upto 4 lacs Rs 500 Over Rs 4 lacs and upto Rs 7.5 lacs- Rs 1,500 Over Rs 7.5 lacs to Rs 20.00 lacs Rs 3,000

Change of institution - Studies in India Rs 250 Studies abroad Rs 500

Repayment period Repayment period will start after 1 year of completion of the course or 6 months after getting a job whichever is earlier.After repayment starts: Loan amount Upto Rs 7.50 lacs Over Rs 7.50 lacs Axis Bank Repayment period 10 years 15 years

Amount of Loan

For studies in India, maximum Rs. 10 lacs Studies abroad, maximum Rs. 20 lacs

Interest rates Loans upto 4 lacs -7.00% above base rate, currently 17% p.a. Above 4 lacs and upto 7.5 lacs 8.00% above base rate, currently 18% p.a. Above 7.5 lacs-6% above base rate, currently 16% p.a.

*(0.50% concession in interest for girl student)

Other charges Repayment instruction/instrument return charges Rs 500+ service tax as applicable per instance. ICICI Bank Shikhsha Sarathi loan scheme

Amount of Loan

For studies in India, maximum Rs. 10 lacs Studies abroad, maximum Rs. 20 lacs

Interest rates Present interest rate is 11% and is changed from time to time as prescribed by the bank Processing Fees

No processing fee/ upfront charges/fore closures fee is collected from education loan

Repayment period Repayment period will start after 1 year of completion of the course or 6 months after getting a job whichever is earlier. Loan is to be repaid in 5 -7 years after the commencement of the EMIs. Credila an HDFC Ltd Company

Loan Amount Minimum amount of Rs 1 lac and minimum amount of Rs 20 lacs. Interest Rate Interest rate is floating rate of interest is linked to Credilas BLR( basic lending rate). Current interest rate is 11.75% p.a. Repayment Period Offers upto a maximum of 10 years for loan repayment and the repayment period starts right after the disbursement of the 1st installment.