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  • Personal Loan BYTES FROM OUR KITCHEN

    Higher Education Loan

    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

    • Kotak Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I had taken a personal loan from Kotak Mahindra Bank a long time back and the experience i had was quite good. The loan was completed a while back without facing any hassle, they did not made any sort of additional charges and overall i am satisfied with the services provided.
      Was this review helpful? 0
      , chennai
      Reviewed on May 22, 2019
    • HDFC Bank Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I had taken a Personal loan from HDFC Bank a while back and the loan amount was around 8,50,000. The interest rate which they had made was around 14.5% and there was some 2% of charges which they had made as processing fee. Their customer support team had also been helpful.
      Was this review helpful? 0
      , coimbatore
      Reviewed on May 22, 2019
    • Kotak Personal Loan
      "Need to decrease charges"
      0.5 4.0/5 "Great!"
      I have taken a personal loan in KOTAK MAHINDRA bank before 3 months ago. I expect the loan amount for for 1lakh 53 thousands but i received the amount of 1lakh 45 thousands for the duration of 3 years. The rate of interest and processing fee also high in this bank.
      Was this review helpful? 0
      , bangalore
      Reviewed on May 22, 2019
    • HDFC Bank Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been holding my personal loan with HDFC bank from long time, the loan amount was sufficient , they gave me loan up to 10,00,000 which is very much high, they have not charged me any hidden charges, the emi i use to pay 35,152 every months on monthly basis, by October it will get finished my loan.
      Was this review helpful? 1
      , hyderabad
      Reviewed on May 22, 2019
    • Standard Chartered Bank Personal Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      I had taken a Personal loan from Standard Charted Bank a while back and the process in getting this loan was quite simple. The loan amount has been fine and the interest rate has been nominal. There has been some processing charges around 500 as well.
      Was this review helpful? 0
      , bangalore
      Reviewed on May 22, 2019
    • YES Bank Personal Loan
      "Good Loan service"
      0.5 4.0/5 "Great!"
      I have purchased the personal loan 2 years back. Yes bank people approached me for the personal loan hence i accepted. They have charged me a huge interest rate and there is pre-closure option is available. Bought the loan amount of Rs. 3 lakhs and I'm not sure about the processing fee. I have chosen the tenure period of 5 years.
      Was this review helpful? 0
      , vadodara
      Reviewed on May 22, 2019
    • IndusInd Bank Personal Loan
      "Very Good Service"
      0.5 4.5/5 "Excellent!"
      The overall experience in getting my personal loan from IndusInd Bank has been pretty much okay, where i did not face any difficulty in getting the loan. The process went well and the loan amount has been sufficient, the interest rate was quite nominal as well. They did not made any additional charges as well.
      Was this review helpful? 0
      , chennai
      Reviewed on May 22, 2019
    • Axis Bank Personal Loan
      "Very Good Service"
      0.5 4.5/5 "Excellent!"
      I have taken a personal loan from AXIS Bank a while back and the process in getting this loan was really easy, it was seamless and the loan was disbursed on the right time. The interest rate and processing charges has been nominal with them and the loan is still running.
      Was this review helpful? 0
      , chennai
      Reviewed on May 22, 2019
    • HDFC Bank Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      My experience is good by taking the personal loan with the HDFC BANK for an while and they have charge nominal rate of interest up to 12.5% and even there processing fee is also nominal only, the loan amount which they have given to me was sufficient as per my requirement they have given to me and their customer support team is also very good.
      Was this review helpful? 0
      , hyderabad
      Reviewed on May 21, 2019
    • HDFC Bank Personal Loan
      "Good"
      0.5 5.0/5 "Blown Away!"
      I have taken a personal loan in HDFC bank for more than a year. The amount which I received from bank was sufficient for the duration of 3 years. On time i received the loan. The rate of interest is nominal in this bank. The processing fee was nominal.
      Was this review helpful? 0
      , thane
      Reviewed on May 21, 2019
    • Bank Bazaar Personal Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      The experience with Bank Bazaar has been superb and i am using the services of them for the very first time for applying my personal loan. I came to know about the services of them while searching in Google and after i applied through them they had been quite good that they explained everything clearly and had been prompt.
      Was this review helpful? 1
      , mysore
      Reviewed on May 21, 2019
    • HDFC Bank Personal Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      The process in getting my personal loan from HDFC BANK has been pretty good where the verification process has been great and there was a good coordination. The loan amount was disbursed on time and it was good but the interest rate with them had been on the higher side, the processing fee was also there and they had made some extra charges which was around 6000.
      Was this review helpful? 2
      , mysore
      Reviewed on May 21, 2019
    • HDFC Bank Personal Loan
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      Bought my personal loan with HDFC for 2 years back. They have taken 1 month to sanctioned the loan. No particular reason for choosing this loan. They charged me a interest rate of 13% and there is no processing fee. There is a partial payment and pre-closure is available with some charges.
      Was this review helpful? 1
      , greater noida
      Reviewed on May 21, 2019
    • Bank Bazaar Personal Loan
      "Normal Service"
      0.5 3.0/5 "Satisfactory"
      The experience i had with Bank Bazaar has not been that great, i am using the services of them for the very first time for getting my personal loan through them. I would suggest them to provide better offers in personal loan with lesser interest rate. I feel that the offers provided by them should be much more better.
      Was this review helpful? 0
      , hyderabad
      Reviewed on May 21, 2019
    • Early Salary Personal Loan
      "Should have provided with a lesser interest rate"
      0.5 3.0/5 "Satisfactory"
      The process in getting my Personal loan from Early Salary has been quite okay but the interest rate with them had been very high when compared with the market rate. The processing charges ahs also been high and the loan has been closed as well. Overall i am not much happy with the services provided by them.
      Was this review helpful? 1
      , hyderabad
      Reviewed on May 21, 2019
    • ICICI Bank Personal Loan
      "Need to decearse hidden charges"
      0.5 3.0/5 "Satisfactory"
      I have taken a personal loan in ICICI bank for the past 4 years. The amount which I received from bank was sufficient as per my expectation for the duration of 3 years. The rate of interest for 12% is nominal in this bank. The charges are applicable for this loan.
      Was this review helpful? 0
      , new delhi
      Reviewed on May 21, 2019
    • SBI Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      The process in getting my personal loan from State Bank Of India had been pretty much good where there has not been any issues. The loan amount has been fine and the interest rate was just 12.55%. There was no additional charges which they had made and the loan is still running without facing any sort of hassle.
      Was this review helpful? 1
      , hyderabad
      Reviewed on May 21, 2019
    • HDFC Bank Personal Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I have taken a personal loan in HDFC bank for more than 2 years. For the tenure of 5 years I received a loan amount as per my expectation. On time the process was done for the disbursal. The rate of interest is nominal for a personal loan. The fee was applicable and nominal.
      Was this review helpful? 0
      , indore
      Reviewed on May 21, 2019
    • review Personal Loan
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I have been using my personal loan with Bajaj finance from long time, they have given me good loan amount which they have given em was good, the rate of interest they have charged me was High, so far i did not face any issue, still this loan is running.
      Was this review helpful? 1
      , bangalore
      Reviewed on May 21, 2019
    • HDFC Bank Personal Loan
      "Good card"
      0.5 4.0/5 "Great!"
      I have been holding my personal loan with HDFC bank from long time, the loan amount which they have given to me was sufficient, i got loan amount as based on my requirement, the rate of interest they have me was nominal, still this loan is running.
      Was this review helpful? 1
      , bangalore
      Reviewed on May 21, 2019
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