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A higher education loan is the amount you borrow from a bank to finance you or your children’s educational expenses. Banks normally charge affordable rates of interest for higher education loans. Also, these loans do not require any collateral up to a particular amount. Higher education loan is normally provided to aspiring and deserving students and professionals who need funds to finance their education. Any deserving students or professionals can apply for higher education loan to pursue professional and technical education in India and across the world. Before applying for a higher education loan, an individual needs to first enroll himself/herself in career oriented courses like medicine, management and engineering at graduate or postgraduate level.
In the USA, a higher education law was formed on November 8, 1965 in the USA to strengthen the educational resources in the colleges and universities of the USA and provide financial support to post-secondary students. As per the law, low interest loans are provided to deserving applicants to fund their education. Similarly, the government of India has also launched a scheme to offer complete interest subsidy educational loans for students during the period of a course and more 1 year or 6 months after getting a job. Such higher education loans can be availed by economically weaker sections of our society for pursuing any approved courses in technical and professional domains from recognized institutions in India. In India, you can apply for higher education loans under the educational loan schemes offered by the Indian Banks’ Association (IBA) which is a representative body of the Indian banking system. The IBA primarily works for development, coordination and strengthening of the Indian banking system by assisting the Indian banks in multiple ways.
Given that higher education has become a very costly affair, you need do prior financial planning to fund your education. Rising education fee and expensive hostel accommodation demand a lot of cash on your part. So, in order to get a customized solution to all your educational expenses, it is advisable that you opt for a higher education loan and complete your studies without facing any financial difficulty. Certain banking institutions provide education loans for non – AICTE approved courses as well. With a higher education loan, you can cover 100% of your course fee as well as other education related expenses. You can take higher education loans from any financial institutions or government approved charitable institutions.
You need to fulfill the below mentioned eligibility conditions to be qualified for a higher education loan in India:
Bank usually asks for the following documents from a student while accepting his/her higher education loan application:
A salaried employee needs to submit the following additional documents:
A self-employed individual needs to submit the following documents:
A self-employed professional needs to submit the following documents:
Normally, banks charge lower rates of interest on higher education loans. Higher education loans are designed in such way that students, salaried employees and self-employed individuals can afford these loans and fulfill their desire for higher studies. Low interest rates and less associated service charges make these loans highly affordable. Also, banks like the State Bank of India (SBI) offer 0.50% concession on interest rates for girl students. Likewise, Axis Bank charges base rate plus 6.50% for girl child for an amount of Rs. 4 lakh. For the same amount of loan, the bank charges base rate plus 7% from a male applicant. The interest rate charged by ICICI Bank on higher education loan is currently 11%. However, these interest rates are subject to change from time to time without giving any prior notification to customers.
It is very easy to apply for a higher education loan in India. Once, you decide your course and know the amount you required for pursuing that particular course, you can proceed to apply for your higher education loan. Either you can apply it online or you can visit your nearest branch to do the same. While applying online, you have to keep the following information - your personal details, contact information, co-borrower detail and course details ready with you. Else, you can contact your concerned branch after which the bank representative will follow up with you and help you get your loan.
Yes, you can apply for a higher education loan to pursue higher studies abroad.What is the maximum amount offered for studying abroad?
The maximum amount offered as higher education loan differs from bank to bank. For example, the State Bank of India offers Rs.30 lakhs as maximum amount while HDFC Bank offers Rs.20 lakhs as the highest amount for higher education abroad.Do I need a co-applicant for my higher education loan? If yes, whom can I include as co-applicants?
Yes, you need a co-applicant for a higher education loan taken for a full time course. You can include your parent or legal guardian as primary co-applicant, and spouse and parent-in-laws as secondary co-applicant, if you are married.Will I be eligible for any discount if I am a girl?
Yes, definitely. Many banks in India including Axis Bank and SBI offer discounted rates of interest for girls.Can I get a moratorium or repayment holiday while paying off my higher education loan?
Yes, many bank offers repayment holidays for select course.Am I eligible to get a higher education loan, if I am a self-employed?
Yes, a self-employed person can also apply for a higher education loan.What are the modes of payment I can use to pay off my higher education loan?
You can repay your higher education loan through equated monthly installments. Also, you can pay it off via standing instruction, post-dated cheques and ECS.What are the courses for which banks normally offer higher education loan?
Banks normally offer higher education loans for the following courses – full time Management Courses, Graduation Courses, Post-graduation Courses, Medicine, Architecture, Engineering Courses ( both government and private ), Medicine, MCA ( Masters in Computer Application), Hotel and Hospitality Management , Agriculture and Pure Sciences.Is it compulsory to be an Indian resident to apply for a higher education loan in India?
Yes, it is mandatory to be an Indian resident to apply for a higher education loan in India.Do I need to submit ITR, if I am a self –employed and apply for a higher education loan?
Yes, you need to submit your income tax return (ITR) certificate if you are a self-employed.