Things to Consider before taking Education Loan

Things to Consider before taking Education Loan

These days it is so easy to get Education loan for the Domestic or International Study but we all should aware with this thing that we have to pay this loan with a high education rate and in a limited period of time. So, we come back with a article which highlighting interest rates charged by different type of Banks  and what are their other terms and conditions related to education; Terms and Conditions like Loan processing charges, Prepayment charges as well as late payment charges;

Interest rates charged by different type of banks related to Education Loan:

 

Bank Interest

Rate

Interest rate

Concession

Loan

Processing

Charges

Prepayment

Charges

Late Payment

Charges

SBI For loans up

to Rs.4 lacs:

3.50% above

Base Rate,

currently

13.50%

p.a.Above

Rs.4 lacs and

upto Rs.7.50

lacs: 3.75%

above Base

Rate,

currently

13.75% p.a.

Above

Rs.7.50 lacs:

1.75% above

Base Rate,

currently

11.75% p.a

Ø  (0.50%

concession

in interest

for girl

students)

Ø  (1%

concession

for full

tenure of

the loan, if

interest is

serviced

promptly

including

course

duration)

 

NIL NIL NIL
AXIS BANK Up to Rs. 4

lacs: Base

rate

(10.25%) +

7.00%Loans

greater than

Rs. 4 lacs

and up to Rs.

7.5 lac:

(10.25%) +

8.00%

Loans

greater than

7.5 lacs:

(10.25%) +

6.00%

0.5% for women

Beneficiaries

Nil Nil Rs 500 +

taxes per

cheque

bounce and a

penal interest

@24% per

annum i.e. @

2% per month

on the

overdue

installment

PNB Bank Loan up to

Rs.4 lac: BR

(10.25%)

+3.00%Loan

over Rs.4 lac

to up to 7.50

Lacs: BR

(10.25%)

+4.00%

Loan over

Rs. 7.50 lac:

BR (10.25%)

+3.50%

1% if interest is

serviced during

the study period,

0.5% for women

Beneficiaries

Rs. 450+tax for

Documentation

NIL NIL
BANK OF Baroda Loans up to

Rs.4.00 lacs:

Base Rate

(10.25%) +

2.50%Loans

above

Rs.4.00 lacs

and up to Rs

7.50 lacs:

Base Rate

(10.25%) +

2.50%

Loans above

Rs.7.50 lacs:

Base Rate +

1.75%

1% if interest is

serviced during

the study period,

1% for women

beneficiaries

Study in India

– NILStudy

Abroad —

1.00%

(Refundable on

availment of

loan

NIL NIL

 

Other Major Doubts related to Education Loan;

  • Will I get Tax benefit during payment of Education Loan?

Yes, you can claim for the Tax benefit but only on the Interest Paid. According to Financial act under 80 E of the Income Tax; you can claim for the deduction of tax on Interest paid for Education loan upto 8 years from the initiating of repayment process.

  • What would be Waiver period or time to start payment process of Education Loan?

It varies from Bank to Bank. Some banks initiate charging interest just after the completion of Loan and some after 6 months. This is totally depends upon the Waiver period decided by the bank as well as amount of your loan.

  • How much amount will be charged if I pay the Education Loan before time?

This also depends upon Bank conditions. Some of the Bank charges a heavy penalty for Prepayment or some doesn’t allow. You should read all conditions related to Prepayment of Education Loan as some of the Banks charge heavy penalty if you are not paying from your own income.

 

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