Education Loan

Here is the list of the providers of the 10 best education loan in India at present: 

Here are different types of student loan in India:

• Digital Education Loan: It is an online education loan that involves a digital application and disbursal process. This variant is faster than non-digital education loans.
• Education Loan for Premier Institutes: These loans cover expenses of recognised undergraduate and postgraduate courses.
• Education Loan for Higher Education in India: These loans are available for higher education of students within India.
• Education Loan for Higher Education Abroad: As the name suggests, this loan covers the expenses of higher education for those who want to study abroad.
• Secured Education Loan: These loans require collateral, such as a residential property, a fixed deposit, or a bond.
• Unsecured Education Loan: These collateral-free loans are approved based on the student's academic record, future earning potential, and the co-borrower's income.
• Education Loan for Vocational Education & Training: Also known as Career Development Loans, these loans are designed for working professionals and are ideal for specialised training, executive programs, or business schools.
• Government Scheme: These are government-sponsored education loans that are offered to a special category of students at subsidised interest rates. PM-Vidyalaxmi Scheme and Shaurya Education Loan are some of the examples.

Here are some popular education loan in India offered by the Government:

• PM-Vidyalaxmi Scheme: This central scheme provides collateral-free, guarantor-free education loans for students admitted to one of the 860 QHEIs (Quality Higher Educational Institutions), identified by the Ministry of Higher Education. It offers a 3% interest subsidy during the moratorium period (which is course duration + 1 year) for families having an annual income of up to ₹8 Lakhs. The scheme offers need-based loans up to ₹3 Crores without any processing fee for up to 15 years tenure (excluding course period and moratorium).
• Credit Guarantee Fund Scheme for Education Loan (CGFSEL): This scheme provides a credit guarantee for education loans up to ₹7.5 Lakhs without any collateral security/ third-party guarantee.
• Dr Ambedkar Central Sector Scheme of Interest Subsidy: This scheme provides a 100% interest subsidy on student loans for meritorious Other Backward Classes (OBCs) and Economically Backward Classes (EBCs) students who are pursuing Master's, M.Phil, or PhD abroad. It covers interest accrued during the moratorium period (which is course duration + 1 year) to ease the financial stress of overseas studies. This scheme is administered by the Canara Bank on behalf of the Ministry of Social Justice and Empowerment.
• Central Sector Interest Subsidy (CSIS): This government-backed scheme provides a full interest subsidy during the moratorium period on student loans for economically weaker section students whose annual parental income is up to ₹4.5 Lakhs, for pursuing professional/ technical courses.
• Padho Pardesh: It is a Government of India scheme offering interest subsidies on education loans to meritorious students of notified minority communities (such as Muslims, Christians, Sikhs, Buddhists, Jains, and Parsis) who are pursuing master's, M.Phil, or PhD studies abroad. The scheme covers interest during the moratorium period (which is course duration + 1 year) for economically weaker sections with an annual income below ₹6 Lakhs.
• Skill Loan Scheme: This scheme is designed specifically for vocational training, providing education loans between ₹5,000 and ₹1.5 Lakhs for individuals pursuing skill-based training.
• Shaurya Education Loan: This scheme is for children/wards of defence and security personnel.
• NBCFDC: It provides loans for professional/ technical courses at 4% p.a. interest rate for boys and 3.5% p.a. for girls of backward classes.
• NSFDC: It provides loans up to ₹30 Lakhs for studies in India and up to ₹40 Lakhs abroad to students belonging to SC communities.
• NHFDC: This scheme provides loans for students with disabilities.

Below are some of the most attractive benefits of Study Loans in India:

• Education loan in India offers tax benefits under Section 80E of the Income Tax Act, 1961. Eligible individuals can deduct the entire interest paid on their loans for higher education from their taxable income. The deduction applies for a term of up to 8 years, without any upper limit on the interest amount.
• You can avail of a loan amount of up to ₹3 Crores, depending on your eligibility, requirement, and lender’s policy.
• Education loans come with a flexible repayment period of up to 15 years after the course duration + up to 12 months of repayment holiday.
• You can seek a term loan for pursuing higher education in India or abroad, where you have secured admission.
• The minimal processing fee can go up to 2% of the loan amount + applicable GST.
• There are no foreclosure charges applicable to student loans.
• The margin required is zero for education loans up to ₹4 Lakhs, 5% for loans above 4 Lakhs for studies in India, and 15% for studies overseas.
• You can easily get a sanction letter before admission based on your profile.
• The loan comes with quick disbursal, usually within 7 - 15 working days from the date of receiving your complete education loan application, along with the required documents.
• Some banks also offer insurance for student loans, which can secure your loan repayment. The premium amount is included in the EMI.  
• Many banks (including Punjab National Bank, Bank of Baroda, etc.) offer a special concession of 0.50% p.a. in the rate of interest for female students.

Below are the basic eligibility criteria required to qualify for a student loan in India:

• Nationality: Indian.
• Age: 16 to 35 years.
• Facility type: A term loan for Indian Nationals for pursuing higher education in India or abroad, where they have secured admission.
• Qualification: Graduation, Post-graduation, Master's, Regular Degree/ Diploma Courses, Teacher training/ Nursing Courses, PHD, Education Programs, etc.
• Qualification for Studies Abroad: Job-oriented Professionals/ Technical Graduation Degree Courses/ Post Graduation Degree & Diploma Courses like MCA, MBA, MS, etc., offered by reputed universities, Courses conducted by CIMA (Chartered Institute of Management Accountants) London, CPA (Certified Public Accountant) USA, etc.
• Streams: Medical, Management, STEM (Science, Technology, Engineering, Mathematics), etc.
• Expenses covered: Fees payable to college/ school/ hostel, examination/ laboratory/ library fees, purchase of books/ uniforms/ equipment/ instruments, purchase of computers/ essential for completion of the course, caution deposit/ building fund/ refundable deposit, travel expenses/ passage money for studies abroad, any other expenses required for course completion.
• Security (for secured loans): Collateral/ security (such as property, fixed deposits, insurance policies, mutual funds, NSC, KVP, etc.) may be required.
• Co-applicant: A co-applicant may be required for all full-time courses. Usually, father/ mother/ sibling/ parent-in-law/ grandfather/ grandmother/ maternal or paternal uncle, are accepted as co-aplicants.
• Admission: Admission must be secured via the Entrance Test or Merit. 

The documents required to apply for an education loan for students in India are listed below:

• Education loan application form along with the latest photograph (signed across).
• Asset-Liability Statement of the applicant/ co-applicant/ guarantor (usually required for loans above Rs 7.50 Lakhs).
• PAN is mandatory if not available in the system.
• Identity proof: Aadhaar/ Passport/ PAN/ Driver’s License/ Voter ID Card (anyone).
• Residence proof: Recent copy of Telephone Bill/ Electricity Bill/ Aadhaar/ Passport/ PAN/ Driver’s License (anyone).
• AADHAR has to be updated for any application for a subsidy scheme of the government.
• Providing a passport is mandatory for students for studies abroad (in case of non-availability in the Bank’s record).
• Student academic details: Includes the mark sheet of 10th, 12th, graduation (if applicable), and entrance exam result.
• Proof of admission to the course: Offer Letter/ Admission Letter/ Identity Card (if available).
• Past education proof: Marksheets/ Passing Certificates of S.S.C., H.S.C., & Degree Courses
• Copies of letter conferring scholarship, free-ship, etc. (if any)
• Schedule of expenses for the course.
• Gap certificate (if applicable).
• Age proof and signature proof.
• Co-applicant/ guarantor income proof:
  • Salaried: Latest Salary Slip/ Salary Certificate, copy of the latest Form 16/ Income Tax Returns.
  • Non-Salaried: Business address proof, latest Income Tax Returns & Audited Balance Sheet.
• Account Statement: Recent 6 months’ Statements for all bank accounts held by the applicant(s).