EVERYTHING YOU NEED TO KNOW ABOUT GETTING AN EDUCATION LOAN IN INDIA

What is the education loan scenario in India?

The total market size of the education loan is 60,000 crores +. The cost of education in India as
well as at universities abroad is increasing and hence a number of students have started opting
for education finances. Additionally, education loan industry is one of those few industries
which has benefited by the demonetization drive of the government. Currently the industry is
in a very growing phase.

What are the types of loans available in the market?

There are both secured & unsecured loans available in the market. Secured loans help you to
secure a higher amount of loan at a lower rate of interest against some collateral. The
unsecured loan on the other hand helps to get your education funded without keeping any of
your assets mortgaged with lenders. However, for abroad studies banks offer unsecured loans
only up to 7.5lakh rupees while NBFCS can offer unsecured loans of as high as Rs. 35 lakhs.

What are the advantages of taking an education loan VS using personal funds?

Availing an education loan comes with multiple benefits. Here are some of the many
advantages an education loan has over liquidating savings to pay college fees:

Attractive Tax benefit under Sec 80-E of Income Tax Act. Not many know that the 'Tax
exemption on interest paid doesn't have an upper limit for education loan, making this a
very attractive & economical finance option.
EMI starts post course completion whereas through personal finance, the year/semester
fee needs to be paid at the beginning of the course.

For studies overseas, a loan sanction/solvency letter can help show proof of funds and
help get admission in the University of your choice.

An Education loan can be helpful in case cost of education rises due to currency fluctuation,
etc.

Opportunity for students to take up responsibility to pay for their education & help
preserve family savings for family contingency/emergencies.

Students can build a good credit history and get a chance to avail other loans at attractive
rates in the future.
What is the maximum education loan that one can get?

As per the IBA guidelines, the banks offer up to Rs. 4 Lakhs and Rs. 7.5 Lakhs without collateral
security for studies in India and abroad respectively. However, companies like Credila can offer
up to Rs. 35 Lakhs (US$ 50,000+) without any security on select courses, for eligible applicants.

Banks also have an upper cap and normally offer up to 20 lakhs of loan only. However, Credila
has no upper limit on the loan amount. Also, the loan amount covers expenses like tuition fees,
living costs, books, periodicals & sometimes travels costs too.

Can one apply for a loan before admissions? Why should I get loan sanction before
admission?

Yes, this unique offering to get loan sanction even before admissions confirmation is available
with education loan specialists like Credila.

This facility helps you know your loan eligibility in advance, evaluate your options & plan your
finances better. It ensures that there is no last minute running around.

Education Loan specialists like Credila encourage students & parents to get loan evaluation
done even before they choose their final destination. The availability of door-step service has
made it convenient for working parents and students to avail of this facility at the convenience
of their homes and offices.

When is the right time to apply for an education loan - before admission confirmation or
after?
Like the famous chicken or egg situation, most students/parents are often faced with a
situation; as to what process needs to be tackled first the admissions or the educational loan?
Most banks require confirmed admissions before granting the approval letter for the education
loan, whilst most universities prefer students with the assured funding.

Also, many colleges do not grant much time between the admissions and the fee payment,
which often leaves very little time for loan application and processing and hence making you
run around for funds last minute. However, with Education loan Specialists like Credila now
allow you to apply and get loan sanctions even before admission confirmation. With this hassle-
free process, it allows students and parents to know of their loan eligibility in advance.
Advantages of Early Application:
Increases the chances of getting admission to your dream university since there is fund
assurance
Allows you to know your loan eligibility in advance
The preferred way to declare Assured Funds to Universities
Loan Sanction letter has better acceptance over the solvency letter
 Assures no last minute surprises specially during Visa / fee payment time

Why should I apply now as my admission is not confirmed yet?

Every student has aspiration to join a certain institute and course. However, many students just
drop the idea of pursuing the course in a certain country or in a certain institute due to the
uncertainty about available funds to pay for that higher education.
Credila enables students to pursue their dreams by making the funds available to them even
before they start applying to the Universities. When students know how much of funds are
available to them even before they start applying to various institutes, students dont have to
downsize their dreams!

Also, Credila offers. Sanction letters even before your admission is confirmed. This helps
applicants in getting favorable reply while applying for I-20s as some Universities prefer
solvency along with the application form. Secondly, you will know your eligibility right away so
that you can plan your finances accordingly.

To get admission to the US Universities & to get I-20 for US visa, Availability of Liquid Funds to
complete the course needs to be demonstrated. Credila's Education Loan Sanction Letter
before admission can help you show the availability of liquid funds.

Tax benefit

1. Is there any Tax benefit on interest paid on education loan?

Yes, every Credila Education Loan borrower or co-borrower (any one) is entitled to avail tax
benefits on interest paid on education loan, under Sec 80-E of the Income Tax Act.
An individual can avail of a tax benefit on interest paid on education loan for self or a relative,
meaning spouse, child or a student for whom the individual is a legal guardian.

2. Who can avail the benefit?

An individual can avail of tax benefit on interest paid on an education loan for self or a relative,
meaning his/her children, spouse or any student for whom the individual is a legal guardian.

3. On what basis the exemption is claimed?

Taxpayer can claim the benefit on the ACTUAL INTEREST PAID on the education loan.

4. What is the maximum amount that taxpayer can claim the exemption?
There is NO UPPER LIMIT to claim the exemption. One will get the FULL AMOUNT OF INTEREST
PAID, as the deduction.

5. From where one has to take education loan, to avail this benefit?
 One has to take loan from the Approved Financial Institutions* to avail this benefit. Credila is
one of the approved financial institutions.

6. What are the courses for which this benefit can be availed?
It is available for the Full Time Courses in full-time studies for any graduate or postgraduate
course in engineering, medicine, management or for post-graduate course in applied sciences
or pure sciences including mathematics and statistics. From 1st April, 2009 the deduction is
allowed for vocational courses also.

7. What has to be place of education to avail this benefit?

Place of education can be India or outside India.

8. What is the time limit to claim the exemption?

It continues for 8 years or until the interest is paid in full, whichever is earlier.

9. How can one prove that I have paid the interest on education loan?
The Financial Institution, from where the taxpayer has taken the loan, will provide a
certification, stating that the person has paid the specific amount to the financial institution
towards the interest of the education loan.

Repayment terms

1. When do I start paying my EMI?

Credilas unique education loan offers the flexibility of paying only simple interest (PEMI) during
the course period and principle plus interest (EMI) after the completion of studies and grace
period.

2. How do you decide on repayment period?

The repayment periods are generally driven by our evaluation of the students potential earning
capability and risks we perceive in extending any particular loan.

At Credila, we understand that students want to start repaying loans immediately after they get
a job. However, they may find higher EMIs (due to shorter repayment periods) at the start of
their careers, very challenging. Thus we offer longer tenure to facilitate smooth transition of
student from campus to corporate. This way they can start their earning and professional lives
with positive credit histories that help them to take other loans in future.

What are the required factors for the loan?

Credila Education Loan depends on multiple factors such as:
Academic background of the student
Type of course and University for which education loan is applied for
If collateral is offered against the loan or not. Type of collateral offered.
Co-borrower/guarantor on the loan. Job profile of the co-borrower etc.
 What is the time frame for the Disbursement?
The loan application will be processed two phases:
For in-principle sanction
For disbursement of funds
The in-principal sanction letter would be given in about 7 to 10 days from the date of receipt of
completed Application Form along with the supporting documents from the customer.
Similarly, the disbursement would be completed within 7 days from the date of receipt of all
post sanction documents from & completion of the underlying post sanction process by the
customer.

Why Education Loan from Credila?

Credila- An HDFC Ltd. Company is India's First Dedicated Education Loan Lender
Education loan from Credila provides you income tax benefits under Section 80(E) of Income
Tax Act of India
Credila has already funded Indian students going to: 35+ Countries, 2100+ Institutes &
studying 1000+ different Courses
Credila understands students needs & provides 'tailor-made' solutions as:
Credila has invested time and resources to set up appropriate systems, processes and know-
how related to the education industry.
Credila has numerous databases on education sector and their credit scoring model for the
approvals of loans is designed specifically for student loans.
Credila, therefore, understands problems, challenges and issues faced by the students and their
parents and also the institutes.
Our objective has been to work closely with students and parents to try to identify the
appropriate education loan programs for them.

Unique Benefits of Credila Education Loan:

Loan Approval Before Admission
Tax Benefits Under Section 80E
Up to 100% Finance
Door Step Service!
Loan up to Rs. 2.5 Crores
Easy Loan Processing

Education Loan in Dollar Vs Education Loan in Rupees

Most people think that the loan taken in Dollar with lower Rate of Interest is less expensive as
compared to loan taken in India in Rupees. But in reality at the end of the loan tenure they end
up paying more than what they could have paid in India.
Assume that someone has taken an US$ loan of $ 1,500 at 7% Rate of Interest for 5 years.
Considering rupee depreciating against dollar at 7% per annum, the borrower will end up
paying more than 14% effective Rate of Interest as compared to much lower Rate of Interest in
Indian Rupees.

Process to Apply to Credila for Education Loan:

STEP 1: Application - After receiving the hard copy of the application form & all the required
documents, Credila will start processing your loan application
STEP 2: Verification - External agencies appointed by Credila will co-ordinate with you to complete
Residence & Employment verification of Student & Co-borrower.
(Note: For Secured case, Collateral valuation & evaluation to be completed.)
STEP 3: Approval of Loan
(Note: Education Loan approval as per Credila's credit policy. Terms & conditions apply.)
STEP 4: Agreement Signing
Signed Agreement with disbursement details annexure for all tranches.
Need to Submit 7 SPDC's or security cheque (CTS 2010 standard only) and
ACH Form
Insurance cover premium payment cheque
Origination Fee cheque
STEP 5: Disbursement
Credila will transfer the education loan amount to the bank account specified, after taking confirmation
from the Student via email.

Where can I get the application form for the loan and where I have to submit the same?
Applying to Credila is a very convenient process. Click here to reach Credila!