1. Define an education loan?

An education loan is credit or debt given by banks and financial services companies to students along with their parents/relatives as co-borrower to finance the expenses of his or her studies.

2. How is it different compared to a housing loan?

Following are the differences between housing loan and education loan:

• Home loan taken by the customer to buy a house property while education loan for financing studies
• Home loan is usually given for much higher values (up to crores of rupees) and tenures (months/years of repayment) of 20 to 30 years and the banks generally give education loan for 5 to 7 years. Now, HDFC Credila offers education loan of any amount required and also up to 10 years of repayment period
• In Home loan, the property is mortgaged with the loan provider while education loan may be either given without any security or for higher value education loans against some property, fixed deposit, bonds etc. as collateral security
• In Home loans the customer has to start repaying the loan in equated monthly installments immediately from the next month of the disbursement while education loan may have either the full (principle and interest) moratorium or only principle moratorium where student has to repay simple interest during the course
• There is a limit of income tax exemption on the yearly interest paid on home loan while