How to stay put in the Education Loan world
Updated: Jun 20, 2019
I wanted to write on this topic since most people have a very limited knowledge about education loans. It is not a very advertised topic and you wouldn’t even want to investigate, unless you have children nearing higher education. You may have to take an education loan if your goal amount is partially fulfilled or you would like to partly fund your child’s education without straining your other goals in life. Here’s a quick look at the topic to give you an overview.
Education loans in India
Vidya Lakshmi is a first of its kind portal for students seeking Education Loan. This portal has been developed under the guidance of Department of Financial Services, (Ministry of Finance), Department of Higher Education (Ministry of Human Resource Development) and Indian Banks Association (IBA). Students can view, apply and track the education loan applications to banks anytime, anywhere by accessing the portal.
Also go through the FAQs, they are quite helpful.
This portal also links to National Scholarship Portal https://scholarships.gov.in/
Cost of Education Loans
The interest rate ranges from approx.10% to 15% floating for a collateral free loan. Lowest rates provided by SBI. Check here: https://www.sbi.co.in/portal/web/student-platform/education-loan
There are other banks as well providing collateral free education loans. You can get a loan upto approx. Rs. 20 lakhs for higher education in India and upto Rs. 30 lakhs for higher education outside the country.
If you have an immovable property, you may get upto 85% of the property value as a loan.
You can also get a loan against your fixed deposit from many banks upto Rs.30 lakhs. Avanse Financial Services offering loan amount upto Rs. 1 crore against a fixed deposit of the same amount.
Avanse also offers School Fees Financing which is worth mentioning since cost of education has become quite exorbitant from a very early level. They offer school fee loans upto Rs. 3 lakhs that can be paid in 3 to 6 months EMI at 0% interest if Avanse has a school tie up.
Check here: http://www.avanse.com/education-loan
You can get tax benefits under Section 80E of Income Tax Act of India for Student Loans.
Student Loan Repayment
Generally, repayment will start after the Course period + 1 year or 6 months after getting job.
Hope this will help you in getting an idea about the education loans available in India. Let me know which one works for you best and why so that we can help others make a decision.
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