Trends in Finance and Marketing: How to apply for Education Loan ?

Students who are all willing to do Higher studies(above 12th) have the eligibility to get a bank loan on the name of EDUCATION LOAN. All banks in India have separate funds to give Education Loans. Now a day's all courses are more expensive and cannot afford by a common man. With the expectation of high end salary, most of the students start their first step to professional study like Engineering, Medicine, Research, Nursing, MBA, etc… Very highlighted part of Educational Loan is the repayment need to start only after the completion of courses. Let's see what else to get a education loan from Indian Banks.

How to Avail Education Loans in India ?

As per the Indian Governments and RBI rules on Education loan, many regulations have added from the year 2012 – 2013. Mostly it says that "Education loan is service not a business".

How to Choose a Bank for Education Loan ?

Now we don't have choice on Bank where to get an education loan. RBI rules says clearly that every customer or student can apply for education loan in their nearest Bank only. If I am staying in Nagpur Panchayath and in my ward there is a SBI bank. So I can only apply in that SBI bank. If there is no bank in my ward or Panchayath, I can go for very nearest branch which it is.

If we have a choice of 2 banks in some times, we can go for a Nationalized bank or Public sector banks than a private bank because of higher percentage in interest rates.

On which courses Bank provide educational loans ?

Management studies like MBA, BBA, CA, etc. Then Technology courses like Engineering, Medicine, etc. Mostly banks does not give loans for Bachelor's/Masters in Arts. And for courses where employment prospects are less as per the Bank's own evaluation. Some of the banks consider parents' income; though that is not a criterion for loan repayment according to RBI rules. Because every bank has funds provided by government of India to give education loan and subsidy on interest rates. On basis of this you can question Bank if they hesitate to give education loan.

How much loan you may get ?

Indian Students: Students who study in India can borrow an amount of Rs. 4 lakhs without any security (sometimes checks or bond papers required). A loan amount beyond Rs. 4 lakh and up to 7.5 Lakh can be availed against a third party guarantee. And a five percent margin will applicable for this loan. i.e, 5% deducted from sanctioned loan amount. Third party guarantee can be your relatives like uncle/aunt or friend or your neighbor and should able to stand guarantee for full amount.

Study in abroad: Loan amount of Rs. 7 Lakhs and above are usually sanctioned against Fixed deposits, properties,etc. But 15% margin is deducted from sanctioned amount. Government gives 2% subsidy on these loans for banks.

Important Note: Due to some problems happened in IT industry most education loan holders couldn't repay amount on time. Indian Banks' Association submitted a suggestion to RBI about to get assurance of repayment from loan holder's parents.

Repayment: Course period + 12 months; or 6 months after getting jobs (whichever is earlier).

What are the Documents to submit for applying an Education Loan ?

Mark Sheet of last qualifying examination.

Proof of Admission in college.

Schedule of expenses like fee structure, hostel fee, etc.

Brief statements of assets and liabilities.

Parents' / guarantees' proof of income.

2 passport size photograph.

Identity and address proof for new account holders (if you don't have account in the bank)

Special Education Loans

If you require additional money because of special needs, special-education borrowing can help you make up the difference between your needs and your financial aid package. Federal student loan programs as well as private lenders will be able to lend you money that you can use toward your schooling. Once you finish your schooling or no longer enrolled, you will need to pay back your debt — with interest.

Distance Education Loans

Distance education is more popular than ever today. It allows students to study remotely, without having to attend classes at a university. This allows students from all walks of life to pursue a college education without disrupting their family or work life. While there is no doubt that distance education makes education more accessible to many, students often find that they require distance education loans in order to pay for their remote education. Distance learning education loans are more available than ever before. Students can now turn to a number of sources in order to get the money they need to succeed in school.

Alternative Education Loans

Alternative education loans are also known as private education loans. These loans are simply amounts of money lent by private lenders. They may be offered by banks, private companies, or other financial institutions or persons. The loans are attractive to distance education students because they are so flexible. You do not need to be a full-time student, in many cases, to qualify for some form of loan. You often do not need to be a United States citizen in order to apply for such loan. You can also apply this type of education loan to any school you attend.

Maximum Loan Amount

In India Rs. 10Lakhs

In Abroad Rs.20Lakhs

Margin

Upto Rs. 4Lakh = Nil

Above Rs. 4Lakh:

In India – 5%

In Abroad – 15%

Repayment Tenor

1 year after competing course of 6 months after getting job (whichever is shorter)

Security

For loans up to Rs.4.00 Lakhs:

Parents to join as Co Applicants & No security.

For loans above Rs.4.00 Lakhs and up to Rs.7.50 Lakhs:

Parents to join as Co applicants together with collateral security in the form of suitable third party guarantee. The bank may, at its discretion, in exceptional case, waive third party guarantee if satisfied with the Net Worth / Means of parent/s who would be executing the documents as "Joint Borrower"

Above Rs.7.50 Lakhs: Parents to join as Co applicants together with tangible collateral security of suitable value, along with the assignment of future income of the student for payment of installments.

Students admitted under Management Quota are also eligible for Educational Loan. However other norms / guidelines with regard to eligibility criteria are to be complied as per State/Central government norms

Banks providing Educational loans

Andhra Bank

Allahabad Bank

Axis Bank

Bank of Baroda

Bank Of India

Bank of Maharashtra

Bank of Punjab

Bank of Rajasthan

Bassein Catholic Bank

Bharat Overseas Bank

Canara Bank

Catholic Syrian Bank

Central Bank of India

Centurion Bank of Punjab

Citi Bank

City Union Bank

Corporation Bank

Dena Bank

Development Credit Bank

Dhanalakshmi Bank

Federal Bank

HDFC Bank

HSBC

ICICI Bank

Indian Bank

Indian Overseas Bank

IDBI Bank

ING Vysya Bank

Jammu & Kashmir Bank

Karnataka Bank

Karur Vyasa Bank

Lakshmi Vilas Bank

Oriental Bank of Commerce

Punjab & Sind Bank

Punjab National Bank

Ratnakar Bank

Saraswat Bank

SBI Commercial and International Bank

South Indian Bank

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of India (SBI)

State Bank of Indore

State Bank of Mysore

State Bank of Patiala

State Bank of Saurashtra

State Bank of Travancore

Syndicate Bank

Tamilnad Mercantile Bank Ltd

Thane Janata Sahakari Bank

UCO Bank

Union Bank of India

United Bank of India

United Western Bank

Vijaya Bank

HDFC Loan plans

Do you want to know about our Student Loan for Indian Education in detail?

Focus on pursuing the course of your choice and securing a great education. Leave the hassles of documentation and finances of your student loan for Indian education to us. Here are a few features of the loan:

Amount limits: Get student loans upto Rs. 15 lakh and unsecured lending upto Rs. 7.5 lakh. No collateral or third party guarantee will be required for loans upto Rs. 7.5 lakh.
Wider collateral options: Are you securing a loan of a higher amount than Rs. 7.5 lakh? We offer a wide range of bank approved collateral securities like Residential Property, HDFC Bank Fixed Deposit, LIC, NSC or a KVP policy.
Pick your course: We have a list of approved institutions and courses like MBA, Engineering, Medicine, Architecture, Pure Sciences, IT and much more.
Loan Tenure: Free yourself of the hassle of immediate repayment. Our loans are available upto a period of 7 years including moratorium period. A repayment moratorium (also called a repayment holiday) is the coursework period + 1 year or 6 months after the student gets a job/starts earning - whichever is earlier. You can avail flexible repayment plans.
Tax Rebate: Did you know that you are eligible for a tax rebate for the interest you pay on an education loan under Section 80-E of the Income Tax Act 1961*? See the Income Tax Circular for more details here. Email loansupport@hdfcbank.com to receive interest certificate for FY 09-10.

If this wasn't enough for you, check out some more special privileges that you will get as a HDFC customer for a Student Loan For Indian Education:

We will provide services at your doorstep.
Loans will be directly disbursed to the educational institution as per the fee structure.
Avail access to some other great products and services that we offer. Get a Savings Account with us right away!
Thinking about insurance? As our customer for a student loan, you can also get a special privilege of choosing the Insurance Protection from HDFC ERGO.

What are the eligibility criteria for securing Student Loan for Indian Education?

You need to be a Indian resident
You should be aged between 16 - 35 years.
If you are taking a loan of more than Rs. 7.5 Lakh, a collateral security will be required.
Co applicant: A co-applicant is required for all full time courses. Here are a few points to be noted about co-applicants:
- Primary Co-Applicants: Parents, Spouse, Siblings
- Secondary Co-Applicants: Father-In Law, Mother-In-Law, Brother-In-Law, Paternal / Maternal Uncle / Aunt

Check out more details on eligibility and courses on offer in our FAQ section.

Here is an exhaustive list of the documents that you will need for the student loan:

Category

Applicant (Student)

Academic

Institute Admission Letter with Fee break-up

SSC,HSC,Graduation Marksheets

KYC(Know Your Customer)

Age Proof

Signature Proof

Identity Proof

Residence Proof

Income Documents

Salaried

Latest 2 Salary Slips carrying date of joining details

Latest 6 Months Bank Statement of the Salary Account.

Self Employed

Last 2 Year ITR with Computation of Income

Last 2 Years Audited Balance Sheet

Last 6 Months Bank Statement

Proof of Turnover (Latest Sales / Service Tax Return)

Self Employed - Professional

Last 2 Year ITR with Computation of Income

Last 2 Years Audited Balance Sheet / P& L

Last 6 Months Bank Statement

Proof of Qualification

Others

Completed Application Form

Latest Photograph (Signed Across)

If appointment letter does not mention Joining Details, then applicant has to submit appointment letter of the current employer.
Proof of continuity from previous employer is required if co-applicant is in current job for less than 1 year at the time of loan application

Documentation ( Post Sanction )

Is there any documentation required post the sanction of the loan?

Category

Applicant ( Student )

Loan Agreement

Completed Loan Agreement to be Signed by Applicant and Co-applicant *

Repayment Instructions

PDCs / ECS or SI Mandate

3 Security PDCs in case of ECS and SI mode of repayment

* Stamp duty to be paid by the customer as per the relevant state laws.

Here are the documents you need to submit for subsequent disbursements:

Subsequent Disbursement Request Letter From Applicant Or Co-Applicant
University Fee Demand Letter
Applicant's Academic Progress Report (Previous Semester)
Revised Repayment Instructions - PDCs / ECS / SI plus 3 security PDCs in case of ECS and SI mode of repayment.

Just SMS <ELSUB> 567-6721 or e-mail at eduloan@hdfcbank.com

What are the fees and charges applicable for Student Loan for Indian Education?

Here is an exhaustive list of all the fees and charges to be paid for the education loan:

Description of Charges	Education Loan
Loan Processing Charges	Upto a maximum 2% of the loan amount
Pre-payment charges	Upto 4% of the Principal Outstanding if loan is foreclosed / part prepaid during Moratorium Period. Nil charges if loan is foreclosed / part prepaid any time during Repayment Period.
No Due Certificate / No Objection Certificate (NOC)	Nil
Duplicate of No Dues Certificate/NOC	Rs. 250/-
Solvency Certificate	Not applicable
Charges for late payment of EMI	@ 24 % p.a. on amount outstanding from date of default
Credit assessment charges	Not applicable
Non standard repayment charges	Not applicable
Cheque swapping charges	Upto Rs. 500/- per event
Loan Re-Booking / Re-Scheduling Charges	Upto Rs. 1000/-
Bounce Cheque Charges	Upto Rs. 450/- per Bouncing
Legal / incidental charges	At actual
Stamp Duty & other statutory charges	As per applicable laws of the state