Education Loan in Brief

Education Loan in Brief 

We all know about the William Shakespeare favorite Quote;  “ Neither borrower, Nor Lender”.

But, it is almost impossible to maintain this kind of philosophy. We all are Borrower or lender this time. But, We should know about each and every thing before borrowing or lending Money. These days education is too much expensive and not affordable to everyone so whenever anyone from middle class thinks to get higher education or foreign education, they only have the option ‘Education Loan’. Normally, 18-20 years is the age bar related to education loan taker.

Before taking the education loan, We should think about its all points;

  • Whether education loan is liable?
  • Pros and Cons of education Loan.
  • Are you eligible to get education loan?
  • How much interest rate is for education Loan?
  • Is education Loan a burden or help?
  • And lots of Question.

Education Loan in Brief

Is the education Loan Liable

There are many type of Education Courses available and everyone take course according to their interest. Most of the courses fees are on the sky and most of middle classes can’t afford these fees but they want to see their children at higher posts and they follow towards education loan. Most of the bank charges education loan at interest of 12 to 15 % which is too much high according to US Education loan interest i.e; 7-8 %. So, It is really not liable to get education loan. But, due to financial problems, we have to take. Govt. should look into this matter urgently; first to reduce interest rate and second is to increases repayment period. Most of the Loan institute demand to start up EMI for education loan within one year of completing course or 6 months after job whichever is earlier.  You can pay total amount in 10 years. As we are going through recession period where there are lots of students are without job after getting higher education; it is really hard decision to take education loan. You can opt for entrepreneurship if you really have skills to do something exceptionally.

You can take education loan for any kind of higher education condition is that the course which you are going to pursue is certified from the Govt. and Institute is also certified form the Central Govt. or State Govt.  If your institute is not certified by AICTE, there are very less chances to get education Loan.

Documents required for Education Loan:

  • Documents related to last examination passed.
  • Documents related to course which you are going to pursue.
  • Duly filled application form of Education Loan.
  • Fee structure of your pursuing course.
  • Income certificate.
  • Residing certificate.
  • Details of Guarantor

How much amount of education loan is allowed?

Normally, banks allowed Rs. 4 lakh for education loan in Indian universities and Rs. 7.5 lakh for the foreign universities.

What things education Loan will cover up:

  • Hostel Fees
  • Uniform, books, education fees
  • Laptop if compulsory from College side to finish course.
  • Vehicle loan (Cover up under travel expenses; max. allowed is Rs. 50000).

Pros of Education Loan:

  • Education loan decrease the burden to get money at higher interest from private financer.
  • It reduces the gap between middle class and higher education.
  • You can pay for your study on your own.
  • Some education loans also cover up over medical expenses and training fees.

Cons of Education Loan:

  • Interest rate is too much.
  • Repayment period is small in India as compared to overseas.
  • It acts as a burden on the student and sometime talented students get placed in long term debts due to fewer packages they got after completing course.
  • If you left your education in between due to some personal problems or lacking of interest; you have to pay for your loan immediately otherwise they will start threatening guarantors.

How Much I have to pay to get education Loan

Most of the times, it depends from bank to bank. Documentation charges will vary from Rs. 500 to Rs. 1000. Most of the banks offer 85-95 % of the total amount of the education loan. Remaining, you have to pay on your side. This difference is also known as the Margin amount. In Less amount of education loan, Margin amount can vary from 0 to 5 %.


If you have any kind of doubt related to education loan, Please let us know through Comment section.


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