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  • Higher Education Loan

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  • What is Higher Education Loan?

    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.

    Higher Education Loan Eligibility:

    You need to fulfill the below mentioned eligibility conditions to be qualified for a higher education loan in India:

    • First of all, you need to be an Indian resident.
    • Your age needs to be between 16 to 35 years. However, the maximum age limit may differ from bank to bank. For example, ICICI Bank offers higher education loan to the age of 40 years.
    • If you are taking a higher amount of loan, bank may ask for collaterals.
    • A co-applicant is mandatory for all full time programs. You can include your parent and guardian as co-applicant. A married person can include spouse and parent-in-law as co applicant.

    Documents required for Higher Education Loan

    Bank usually asks for the following documents from a student while accepting his/her higher education loan application:

    • A copy of the letter of admission in a college/university.
    • A complete loan application form with all required details included.
    • A few recent passport size photographs.
    • A statement containing the cost of study.
    • Copies of PAN card (applicable for both - student and parent / legal guardian).
    • Copies of AADHAR card – (applicable for both - student and parent / legal guardian).
    • Proof of identity. You can submit any of the following documents - driving license/ passport/ /aadhar or any photo identity as proof of identity.
    • You also need to submit your proof of residence. Documents like driving license/passport/electricity bill/telephone bill are accepted as proof of residence.
    • Last 6 months’ bank statement of the student/ co-borrower/ guarantor are required.

    A salaried employee needs to submit the following additional documents:

    • Latest 2 months’ salary slips containing your date of joining.
    • Last 6 months’ bank statement of salary account.

    A self-employed individual needs to submit the following documents:

    • Last 2 years income tax return certificates with computation of income.
    • Latest 2 years audited balance sheet.
    • Bank statement of the last 6 months.
    • Proof of latest turnover.

    A self-employed professional needs to submit the following documents:

    • Income tax return certificate with computation of income of the previous two years.
    • Audited balance sheet or profit and loss sheet of the preceding two years.
    • Last 6 months’ bank statement.
    • A proof of qualification.

    Interest rates on Higher Education Loan:

    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.

    Higher Education Loan process

    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.

    Features and Benefits of Higher Education Loan:

    • Higher education loans can be availed to pursue higher studies both in India and abroad.
    • Banks offer different amounts for studying abroad and India. For example, the State Bank of India offers Rs. 30 lakhs to pursue higher studies abroad and Rs.10 lakhs to study in India.
    • Enjoy long term repayment tenures for higher education loans.
    • Banks may ask for collaterals if you borrow a higher amount of money. For example, HDFC Bank asks for collaterals if you are borrowing more than Rs.7.5 lakhs.
    • A co-applicant is mandatory for a full time course.
    • Easy and hassle free documentation process.
    • You can enjoy a wide range of collateral options including residential property, fixed deposits, national savings certificate, LIC policy etc. However, collaterals may differ from bank to bank.
    • You can enjoy tax benefits by taking a higher education loan under section 80E of the Indian Income Tax Act 1981.
    • Banks like HDFC also offer doorstep services.
    • The loan gets directly disbursed to your educational institutions. It may be disbursed in full or parts as per the requirement of your course.
    • Some banks offer savings account free with higher education loans.
    • Get insurance protection.
    • You can use the amount received as higher education loan for paying off your college fee, hostel expenses and travel expenses, and purchasing books and computers etc.
    • No margin is applicable up to a particular amount.

    FAQs

    Can I take a higher education loan to pursue study abroad?

    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.

        

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    Higher Education Loan Reviews

    • HDFC Bank Personal Loan
      "Excellent"
      0.5 4.5/5 "Excellent!"
      I have taken a personal loan with HDFC bank on one year before which was applied directly to bank. The verification process was done on smooth and within 2 days I received a card. Based on my salary they have provided a loan amount which was okay for tenure of 3 years. The rate of interest was 15% which was okay.
      Was this review helpful? 0
      , tezpur
      Reviewed on Oct 17, 2019
    • Fullerton
      Fullerton Personal Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I have applied for Fullerton personal loan through Online .I have not availed this loan since had personal issues.There was no issues with the rate of interest and the processing fee ,The agent gave all the required details about the loan process very clearly .I am really satisfied with the service .
      Was this review helpful? 0
      , hyderabad
      Reviewed on Oct 17, 2019
    • HDFC Bank Personal Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I have applied for HDFC Bank credit card through Online .I have not availed this loan since got the amount from some other source .I have got all the details about the loan process very clearly .The rate of interest was very high and there was no difficulties faced so far .There was good response and follow up from bank end .
      Was this review helpful? 0
      , faridkot
      Reviewed on Oct 17, 2019
    • Fullerton Personal Loan
      "Need to decrease interest charges"
      0.5 3.0/5 "Satisfactory"
      Once I was applied for a personal loan with FULLERTON on a month before I received a call on time for further process.The loan amount sufficient for the tenure period of 5 years the rate of interest was more than 21% which was high. From my end closed the loan process due to interest was high.
      Was this review helpful? 0
      , tezpur
      Reviewed on Oct 17, 2019
    • review Personal Loan
      "Good Loan"
      0.5 5.0/5 "Blown Away!"
      Without any interest rate, they have provided me a personal loan from Bajaj Finance. This loan for medical expense and the overall tenure period is only 1 year. I got the loan amount of Rs. 1.25 lakhs. They charged me some documentation charges alone. I make the EMI amount of Rs. 10400 for every month.
      Was this review helpful? 0
      , chennai
      Reviewed on Oct 17, 2019
    • HDFC Bank Personal Loan
      "Not Satisfied"
      0.5 2.0/5 "Expected more"
      I have applied for HDFC Bank personal loan through Online .I have not availed this loan since the rate of interest was very high .I have not submitted any of my documents and agent gave all the information about the loan process .I am not satisfied with the service .
      Was this review helpful? 0
      , mumbai
      Reviewed on Oct 17, 2019
    • HDFC Bank Personal Loan
      "Need to provide proper attention to the customer"
      0.5 3.0/5 "Satisfactory"
      I have provided the required documents to HDFC BANK via online but after that I got a msg that there was lack of my interest in submitting the documents and it got closed and there was no proper information for canceling which I did not approach them and left it like that. The interest rate i average.
      Was this review helpful? 0
      , dehradun
      Reviewed on Oct 17, 2019
    • Fullerton Personal Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I have applied for Fullerton personal loan through Online .I have not availed this loan since I was hospitalised due to Typhoid hence not taken this loan .I was not having any difficulties with the rate of interest and the processing fee ,I have got all the details about the loan process.I am really satisifed with the service .
      Was this review helpful? 0
      , sonepat
      Reviewed on Oct 17, 2019
    • ICICI Bank Personal Loan
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have taken a personal loan with ICICI bank before 2 years which was taken from the bank directly. Since I am holding a salary account with them they had offered me a personal loan for the amount of 1 lakh 30 thousands for the tenure period of 4 years. Interest was nominal of 16% and processing fee was rs 3700.
      Was this review helpful? 0
      , daman
      Reviewed on Oct 17, 2019
    • IndusInd Bank Personal Loan
      "Good"
      0.5 5.0/5 "Blown Away!"
      I am the first time user of Indusind Bank and its a first month so far there is no glitch and its going good. They have given me a limit which I wanted so its fine. I don't know really about the annual fee. I have been generally browsing for certain things that time, I get a popup then applied for the card and got it easily.
      Was this review helpful? 0
      , chennai
      Reviewed on Oct 17, 2019
    • Fullerton Personal Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I have applied for Fullerton personal loan through Online .I have uploaded all the required documents through online and got frequent callback due to this reason canceled the plan of taking this loan .There was no issues with the rate of interest and the processing fee .
      Was this review helpful? 1
      , visakhapatnam
      Reviewed on Oct 17, 2019
    • HDFC Bank Personal Loan
      "Need to decrease interest charges"
      0.5 5.0/5 "Blown Away!"
      When I applied for a personal loan with HDFC bank a month before which was processed through an online for a verification call was delay from bank after 5 days only I received. The rate of interest was high of 17.9%. So I am not satisfy with interest. They offered for 4 lakhs amount for the tenure of 5 years.
      Was this review helpful? 1
      , daman
      Reviewed on Oct 17, 2019
    • Fullerton Personal Loan
      "Need to improve their service"
      0.5 5.0/5 "Blown Away!"
      From Fullerton I was applied for a personal loan on a last month which was processed through an online. I have received call for a delay of 2-3 days from their end for further verification. The rate of interest was nominal of 11% with the loan amount of 3 lakhs for the tenure period of 5 years. From bank closed the loan process and not intimate the reason.
      Was this review helpful? 1
      , jabalpur
      Reviewed on Oct 17, 2019
    • Fullerton Personal Loan
      "Need to improve the follow up"
      0.5 2.0/5 "Expected more"
      Based on my eligibility, i got the loan offer from Fullerton. 2 months before i applied the loan. I have not given any documents, they said they will call back and there is no follow up. I applied the loan amount of Rs. 2 lakhs for the tenure period of 3 years.
      Was this review helpful? 1
      , tirupur
      Reviewed on Oct 17, 2019
    • Fullerton Personal Loan
      "Average Service"
      0.5 4.0/5 "Great!"
      I have applied for Fulerton Personal loan through Online .I have not availed this loan since there was no requirement .The rate of interest was very high and i have not submitted any of my documents .I have got all the relevant information about the loan process through the agent.I am really satisfied with the service so far .
      Was this review helpful? 0
      , jabalpur
      Reviewed on Oct 17, 2019
    • HDFC Bank Personal Loan
      "It's good"
      0.5 4.0/5 "Great!"
      HDFC BANK took around 5 to 7 days for the personal loan disbursement, when I have applied it through online. They have provided me a sufficient amount, the interest rate should be minimal but its acceptable. The processing fee is around 6 to 7K. The loan duration is 5years.
      Was this review helpful? 0
      , gwalior
      Reviewed on Oct 17, 2019
    • HDFC Bank Personal Loan
      "Average Loan Service"
      0.5 4.0/5 "Great!"
      Because I'm having a salary account with HDFC, i had chosen the Personal loan from them. They gave me a interest rate of 12.55% for the loan amount of Rs. 70000. I am paying the EMI of Rs. 3330. I have chosen the duration of 2 years. It took 8 to 10 days to sanctioned the loan.
      Was this review helpful? 0
      , mumbai
      Reviewed on Oct 17, 2019
    • review Personal Loan
      "Need to be decrease interest charges"
      0.5 5.0/5 "Blown Away!"
      From BAJAJ FINANCE I have taken a personal loan on 7 months before which was applied directly to them. They have sanctioned a loan within one week for the amount of 20 thousands they had given tenure period of 7 months by this month only I closed the loan process. Interest was high of 14%. Monthly EMI I paid for 4 thousands which was high.I received NOC letter as well.
      Was this review helpful? 0
      , amritsar
      Reviewed on Oct 17, 2019
    • Fullerton Personal Loan
      "Follow up was good"
      0.5 5.0/5 "Blown Away!"
      When i inquired online, Fullerton people called me and the approach was good. I had applied the loan amount of Rs. 70000 for that they given me a convenient interest rate. I had selected the tenure period of 2 years. Since i had applied the loan with bank, i have refused to process this loan.
      Was this review helpful? 1
      , mumbai
      Reviewed on Oct 17, 2019
    • Fullerton Personal Loan
      "Need to improve their service"
      0.5 4.0/5 "Great!"
      The rate of interest was high from Fullerton which applied for a personal loan on a month before. I received a call from them after 25 days only which was too delay. Amount offered for 60 thousands for the tenure of 2 years. From bank closed the loan process.
      Was this review helpful? 1
      , amritsar
      Reviewed on Oct 17, 2019
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