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:
Eligibility for education loan
The eligibility requirements for education loan are:
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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