With the cost of education increasing periodically, a large portion of the population in India is opting for education or study loans. An education loan takes care of all your academic and related expenses, thus enabling you to pursue your dreams and build a career for better opportunities in life. However, before taking a loan, you must first be aware of its various aspects – type of loan, EMI, repayment schedule, eligibility and so on. This article will help you create a checklist featuring the most important things that need to be discussed with your lender prior to submitting a loan application.
Your Checklist Must Include These Questions
1. What are the different loan schemes available for students?
In India, the Government offers four different education loan schemes catering to students from diverse backgrounds and streams. These are as follows:
The scheme enables students to apply to multiple institutions through a single application.
Padho Pardesh Scheme
As the name suggests, this particular scheme offers funds to students aspiring to study abroad. The loan scheme is specifically designed for meritorious students belonging to the minority community.
Central Scheme of Interest Subsidy for Education Loan
The scheme is well suited for students belonging to the Economically Weaker Sections (EWS) of the society. By opting for such a loan scheme, those aiming for a professional or technical course can get a subsidy on the paid interest.
Dr. Ambedkar Central Sector Scheme of Interest Subsidy
Under this loan scheme, eligible students from the Economically Backward Classes (EBC) and Other Backward Classes (OBC) looking to pursue higher education overseas can avail of a subsidy on the interest paid.
Each of the above loans is designed to meet the requirements of students. Therefore, discuss these education loan schemes with your lender before zeroing in on one.
2. What expenses will my education loan cover?
Education loans cover all expenditures related to your education. This includes the following:
- Tuition fee
- Laboratory fee
- Library fee
- Expenses related to the course – for example, study tours, thesis and projects, etc.
- of books and stationery
- of travel or commute
- of accommod of living
This takes away a huge financial burden off the shoulder, especially if you are pursuing education abroad.
3. What will be my repayment schedule and monthly EMIs?
Education loans come at affordable interest rates and are usually offered over longer tenors, stretching up to 18 years. Once you have picked a suitable tenor, the payable amount will be broken into monthly EMIs. This makes the repayment procedure easier and comfortable. If you have taken an education loan against your property, you can get an estimate of your monthly dues by using a loan against property EMI calculator. It is an online tool that calculates your EMIs by taking into account the principal amount, rate of interest, and chosen tenor. Simple log in to the lender’s portal and access the tool to better understand your repayment schedule.
4. What is the eligibility criteria to apply for an education loan in India?
To apply for an education loan against property in India, you will need to fulfil the below mentioned criteria:
- You must be between age 23 and 62
- Must be a resident of the country
- Must be a working professional at a private/public organization or an MNC with regular source of income
Apart from these, lenders also take into consideration your credit or CIBIL score to evaluate credibility of loan repayment. Therefore, it is important that you maintain a good credit score, ideally above 725 to be eligible for an education loan.
In addition to these 4 questions, also discuss with your lender about any hidden charges or fees. Some lenders, if not all, may charge you nominal fees for processing or foreclosing the loan.
A Complete Guide on How to Apply for an Education Loan
The best and easiest way to send out your education loan application is online.
- Visit the lender’s website and access the application form.
- Enter your personal details – age, income, employment type, etc., and details pertaining to the property against which you are opting for a loan.
- Submit all the documents needed to support your loan application.
- Get all information verified by the representative.
- Await confirmation of the loan sanction.
- Get the amount credited to your account within 3-4 working days.
Investing in education today can secure your future. Making the right use of an education loan becomes easier when you know what you are committing to. Prepare a checklist, get your doubts cleared and take a step towards a brighter tomorrow with the best education loan offers.