Loans for Graduates

You can approach banks, financial institutions, or government institutions and compare the various loan options designed exclusively for graduates. Make sure you understand the features of each loan before applying for one. Analyse if the characteristics of a loan will be appropriate for your particular needs.

Features of Loans for Graduates in India

Let us now take a look at some of the general characteristics of loans offered by banks as well as financial institutions for graduates in India:

Higher Education Loans

1. Graduates can use education loans to pursue higher education or professional or management or technical programmes.
2. The repayment period provided by banks is typically up to 15 years irrespective of your loan amount.
3. The moratorium period includes course period and 1 year.
4. Most banks do not charge processing loans for education loans. If it is charged, it is a maximum of up to 1% of your loan amount.
5. Life insurance of the graduate is compulsory depending on the loan amount.

Business Start-up Loans

1. If a graduate is interested in starting a business, he or she can apply for business start-up loan in India. Many institutions are providing such loans these days.
2. The processing fee ranges from Rs.0 up to 2.5% of the loan amount.
3. The loan tenure is generally up to 5 years.
4. Graduates can also take loans for equipment required for their business.

Loans for Unemployed Graduates

1. If graduates are unemployed and if they are waiting for employment confirmation from somewhere, they can apply for a loan in the interim for their essential needs.
2. These loans are given for flexible periods.
3. Most of these loans do not require a collateral.

Eligibility:

Following are the eligibility criteria for all graduate loans:

1. The applicant should be an Indian citizen.
2. When a graduate wants a loan for higher education, the applicant should have an admission to the institute after passing the qualifying examination or clearing the selection process.

Documents required:

Following are the mandatory documents required for all graduate loans:

1. Passport or Employee identity card or PAN card or any other valid proof of identity
2. Electricity bill or Aadhar or telephone bill for proof of address
3. Bank statements for latest 12 months
4. PAN card
5. Proof of income (if any)
6. 3 photographs
7. Admission papers including admission letter, mark sheets from Class 10 or equivalent, and list of expenditures consisting of fee structure and living expenditures

Rate of interest:

1. The rate of interest for higher education loans for graduates generally ranges from 12% p.a. to 16.95% p.a. for a loan amount of up to Rs.4 lakh. Different banks charge different rates of interest.
2. If a graduate is interested in creating a business start-up, the interest rate will range from 11.49% to 19%.
3. If a graduate needs a loan given to the unemployed, the interest rate ranges from 11% to 16%.
4. The interest rates can be fixed or floating rates.

Security:

Most banks do not ask for a collateral for lower amounts of graduate loans. For higher loan amounts, you may be asked to give an appropriate third party guarantee or a tangible collateral security of a certain value which is equal to your loan amount.

Top banks and Financial Institutions offering Loans for Graduates in India

Following are some of the graduate loan providers in India:

1. Union Education
2. HDFC Education Loan
3. State Bank of India Education Loan
4. IDBI Education Loan
5. Citibank Personal loan
6. Pradhan Mantri Mudra Yojana
7. HDBFS Personal Loan

There are many other loans that can be taken by graduates for their requirements. You can compare the benefits of various loans and choose the ideal one that is suited to your current financial condition.

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