Educational loan for higher studies in India.

Higher education and professional degrees have now become quite expensive in India. As a result, most students need to take out education loan. Today, the government of India gives educational loan through 27 nationalized banks. If you are thinking of applying for an educational loan, you will have to find out about interest rates, tax benefits, schemes of repayment etc. Several documents are necessary and it takes about 15 days to finalize the loan applications.

Education loan – basic information

The education loan would be provided to those students who have obtained admission to career-oriented courses e.g. medicine, engineering, management etc., either at the graduate or post-graduate level. Any student who has the required academic qualification but cannot pursue further studies due to financial restraints can take this loan.

Though theoretically available for all higher studies, most education loans are given for management degrees or advanced technological degrees. Banks generally do not give loans to study arts. It depends on the discretion of the bank who often considers the income of the parents to give loans for studying subjects where it feels the prospect of income is less.

Education loans were first started by SBI. Since then, many other banks are also offering such loans.

Things to know before you apply for education loan.You can apply for education loan in following cases:

  • You need to apply for full time course. Most banks do not provide loans for part time or distance education courses or correspondence courses. For these, you will need to consult your local banks.
  • Graduate or post graduate courses in medicine, technology, engineering, management, architecture and applied sciences, mathematics, statistics etc.
  • You can pursue this course in India or abroad.
  • You should also know that educational loans are tax deductible. When it comes to repayment, make sure of the tax angle.

Eligibility of educational loan:

  • You must be citizen of India.
  • You must have obtained a specified amount of marks. You should have consistently high academic records.
  • You should not be older than 30 years though some banks impose a limit of 28 years.
  • You must be doing your course from a recognized institution.
  • You must already be in possession of the letter of admission.
  • Your parent or co-applicant should have enough income or there should be sufficient family assets.