Education Loans

Education Loans provide the much needed support when you are short of funds for higher
studies. Student Loans are provided by almost all the banks in India.

With expensive professional education becoming mandatory for people across the country, a
student loan seems the most effective way to tide over these expenses. Most students
expect to land high salaries at the end of their professional training and are likely to be in a
position to easily repay these loans over a period of time.

Professional Courses eligible for education loans

- Management Courses are among the top choices for most of the banks

- Technology Courses from the country's premier institutions can also get student
loans from Banks

- Medical and Engineering courses

Loan amount and security

A) For Studies in India

Students can avail loans up to Rs10 lacs for higher studies in India.

Security Deposits and Margin

- Up to Rs 4 lacs – no security or margin

- Rs 4 lacs to Rs 7.5 lacs - Third-party guarantee. Margin amount to be arranged by

the student: 5%.

B) Overseas study loans

Banks provide loans of up to Rs20 lacs for higher education in overseas universities.
However loans of higher amounts can also be obtained depending on specific courses.

Security deposits and margin

Rs 7 lacs to Rs20lacs – Security deposit is required in the form of following collaterals: Fixed
deposits, LIC policy, NSC certificates, and property worth the loan amount. Margin amount
to be arranged by the student: 15%

Repayment

Repayment begins after course period + 1 year or 6 months after getting job, whichever is
earlier.

Documentation

- Mark sheets of last qualifying examination

- Poof of admission & scholarship

 - Schedule of expenses for the specified course

- Bank account statement for the last six months

- Income tax assessment order for last two years

- Brief statement of assets and liabilities, of the co-borrower, which is usually the
parent or guardian and proof of income, if any.

Eligibility

- All students (Indian Residents) who want to finance their higher education can apply
for Educational Loans
- Between 16 to 35 years of age.

Interest Rates

Interest rates for education loans are discounted and provided below Prime Lending Rate (PLR).

Lender/Bank name Rate of interest in %

Upto Rs4 Lacs Rs4 Lacs to Rs10 Lacs
Bank of India 13.00 13.00 to 13.50
Bank of Baroda 11.50 13.50
Corporation Bank 11.65 12.15 to 12.65
IDBI Bank 12.75 13.00
India Overseas Bank 11.50 12.50 to 12.75
Punjab National Bank 12.00 12.75
State Bank of India (SBI) 12.00 12.50 to 13.50
Union Bank of India 13.25 13.00 to 13.75
Credila 11.25 11.25

Source: Apna Paisa Research Bureau

Note: The rates are publicized on bank websites and are subject to change at bank’s discretion.

Tax benefits

- The government has extended tax concessions on interest paid for education loans
u/s 80E of Income Tax Act 1961.
- Interest paid on loans taken for all streams of studies, including vocational courses
are eligible for this deduction.

Further details will be available at the venue.