In today’s scenario when the hefty cost involves especially with the professional education, it becomes very difficult for those parents who wishes to get their children a right kind of professional education. But the Education loan facilities provided by almost all the public or private sector banks in India have somehow make life easier for such parents who because of the limited resources could not afford it. Today in India the average fee for undergraduate engineering courses is Rs 8 -10 lakh, while for a five-year medical course at a private college, this could go up to Rs 50 lakh. For post-graduate courses such as those on management, fees could be more than Rs 10 lakh. Fees at private colleges are higher than in government colleges. But to avail the Education loan the numerous questions come in the mind of the worrying parents which includes:
- How to get the right kind of Education loan?
- How much loan will be needed?
- What are conditions to get this loan?
- What will be the interest rate?
- What will be the repayment terms & conditions? and many more….OU
Through this article we are providing you all kind of guidance which will be very useful to answer your all queries related to availing the Education loan. According to Indian Bank Association Norms, Banks generally offer education loan up to 10 lac for study in India and up to 20 lac for study abroad. The education loan covers the tuition fee, examination fee, library, laboratory & hostel fee and also includes the money for purchasing books, equipment, instruments & uniform. For studies abroad; besides above the Education loan also covers the caution deposit or refundable deposit and the travel expenses. In some cases, there are limits on some of these items. The loan also pays for expenses on study tours and project work.
Conditions for sanctioning a loan
While sanctioning a loan, a bank will check if a student has actually secured admission to a course, the quality of the college and the course (whether it is recognized by the UGC or AICTE or MCI etc.), if the student has the ability to secure an appropriate job after the course and the credit history of the co-applicant or guarantor. Under education loans, fees for tuition, examinations, library, etc, are paid directly to colleges.
Requirements to avail an Education loan:
First of all beside the applicant (The student) there will be a Co-applicant also who can be the parents, spouse or siblings and there are 03 categories of loan amount ( i) For the loan up to 04 lac no “guarantor” is required,(ii )for loan between 4-7.5 lac “guarantor” will be required .The guarantor has to be someone other than the parent, with a sound financial conditions and (iii) for the loans exceeding Rs 7.5 lac the banks insist on collateral security, usually it is the property. The banks insist on this because they are not sure of the student’s ability to repay.
currently, interest on study loan is between 11.75 per cent and 14.75 per cent, depending on the loan amount and the college concerned. For premier institutions, lenders offer a discount up to 25 basis points. Now a day’s some bank even offers discount to female students.
In the case of studies abroad, one must consider additional sources of funding such as scholarships or part-time jobs, as the funds required are quite high If the tuition fees for a college in India are between Rs 50,000-Rs 2 lakh, the same outside India could be 5 to 10 times, e.g a post-graduate course in a country such as the US or UK could be costing around Rs 30 lac per year, and it is not possible for parents to fund a child’s education on their own. And, dipping into their retirement savings for this purpose is not advisable.
After the completion of the course, those taking study loans get a moratorium of six months to a year. In the case of an engineering course, the repayment period starts after one year of completion of four years degree course (the course duration). After the completion of the course and expiry of moratorium period if the student doesn’t manage to secure a job, the repayment has to be made, otherwise the applicant and the co-applicant will come under the defaulter list and once this happened it will negatively affect their credit history. Once the repayment starts, the borrower can also avail of benefits under Section 80-E of the Income-Tax Act.
With the above article many doubts of the parents will hopefully get cleared and now if you feel your child has got potential and you do not want your child’s dream should shattered because of your limited resources avail this opportunity of Education loan ; who knows one day he or she chooses in Top engineering colleges in NCR or Best engineering college in Greater Noida or Best B Tech college in Noida for his/her dreams to comes true.
For More Information
Mangalmay Group Of Institutions
Plot No. 8 & 9 Knowledge Park II,
Greater Noida, Delhi NCR
Call us : 1800 200 9260
Visit : http://www.mangalmay.org