Education Loan Meaning, Availability, Eligibility, Limits With Full Details

Students prefer education loan for pursing higher education. Also education loan is free from tax. N this article, you will read about the meaning of education loan, apply for education loan, requirements for education loan, limit of education loan and many more information about education loan.

Define Education loan

Education loan is a special kind of loan granted by banks under which some amount of money is granted to students at special rates. With the help of education loan, the students can achieve higher and costly studies at cheaper rates.

How to get education loan

In order to avail education loan; students have to submit following documents in the respective bank:
  • The details of the course in which student have taken admission.

  • Total expenditure of course

  • Marksheet of previous examination passed

  • Full details of scholarship availed, if any

  • Xerox of bank statement of last 6 months

  • Residential proof

  • Income tax statement order

  • Property details

  • Two passport sized photographs

Eligibility for education loan

The eligibility requirements for education loan are:
  • Age limit for education loan varies from bank to bank. Generally it is from 16 to 35.

  • Students should have a good academic record

  • Students should not have year lap during their education

  • Parents should have a definite source of income

From where to avail education loan

Education loan facility is available in each branch of each bank of the country. According to government plans, banks should distribute education loan on the priority basis.

Education loan limit

Normally the students can get education loan for studying in India to a maximum limit of Rs. 4 lakhs without any security. Banks can grant loan with security up to Rs. 10 lakhs. On the other hand, you can get loan of up to Rs. 20 lakhs for studying abroad. You need to deposit some security with the bank as bail on loan exceeding Rs. 4 lakhs. This amount of loan may vary from bank to bank. Some banks offer 75% to 90% of course fee as education loan. Some banks offer loan 6 to 10 times of your parents' income. In other words, the HDFC education loan rate will be different from education loan interest in SBI.

How to repay education loan

The rules to repay education loan are quite simple. You have to start repayment of loan after six months of completion of course or after joining a job. If, in any case, student is unable to repay the loan, then the responsibility shifts to the guarantor. You can avail tax exemption on repayment of education loan which varies from bank to bank.

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