Education Loan: Eligibility, Interest Rates, Documents Required – Check Here

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Education Loan: Quality education is a must for a complete and successful life. For many, it is equivalent to graduating from a top institution. The cost of education is, however, increasing rapidly. In fact, the cost of studying at reputed institutions is already quite high. Education is of prime importance to any individual and students go the extra mile to achieve that. However, the cost of education is on the rise these days and opting for an education loan seems to be the single best solution.

Keeping this in mind, parents, who want to provide their children with the best possible education, invest their money in mutual funds, fixed deposits, etc. for the long term. But despite all this, one may still encounter shortage of funds. An Education Loan therefore, plays a vital role in such a scenario by helping to bridge the gap between the shortfall and the required amount. 

Education loan is a loan that students apply for in order to complete their educational requirements.  Almost all banks & NBFCs in India offer education loans.

The cost of education is increasing at an average of 15% per annum. The tentative cost of an MBA is up from Rs 2.5 lakh to Rs 20 lakh in 15 years. So if a couple starts saving Rs 2,000 per month for 15 years, at an average rate of 12%, they will be able to save approximately Rs 9.5 lakh. 

Education Loan: Eligibility, Interest Rates, Documents Required – Check Here

Education Loan: Interest Rates

  • Interest Rate – 9.15% to 11.15%
  • Processing Fees – NIL
  • Maximum Tenure – 10 Years
  • Lowest EMI – Rs 8,722/Lakh
  • Prepayment Charges – NIL
  • Age – Up to 35 Years

Education Loan: Documents Required

For Salaried – 

  • Application form with photograph
  • Identity and Residence proof
  • Last 6 months bank statements
  • Processing fee cheque
  • Latest Salary Slip
  • Form 16

For Self-employed – 

  • Application form with photograph
  • Identity and Residence proof
  • Last 6 months bank statements
  • Processing fee cheque
  • Proof of Business
  • Business Profile and Previous 3 years Income Tax returns (self and business)
  • Previous 3 years Profit/Loss and Balance Sheet

The banks require additional documents such as admission letter of the institution, fee structure, Class X, XII and graduation (if applicable) marksheets. Also required are the income documents such as salary slips or income-tax returns (ITR) of the co-applicant. 

Education Loan: Eligibility

  • To apply for the loan, one must be an Indian citizen, having secured an admission into a college/university recognised by a competent authority in India or abroad.
  • The applicant must have completed his higher secondary level schooling. 
  • Some banks offer the loan even before one has secured admission into the university. 
  • As per the Reserve Bank of India (RBI) guidelines, there are no restrictions on the upper age limit, but some banks may have it.