Education Loan in India

Scope for Indian education loan Age Limit for Graduation Documents Required Study Abroad Security for both India and Abroad List of Banks Offering Education Loan

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Scope for Indian education loan

Government of India in consultation with Reserve Bank of India (RBI) and Indian Banker's Association (IBA) has framed a Comprehensive Educational Loan Scheme to ensure that no deserving student in the Country is deprived of higher education for want of finances. The new scheme covers all type of courses in schools and colleges in India and abroad.

The Salient features of the scheme are as under:

• The scheme envisages loans up to Rs.7.5 lakh for studies in India and up to Rs. 15 lakh for studies abroad.
• For loans up to Rs. 4 lakh no collateral or margin is required and the interest rate is not to exceed the Prime Lending Rates (PLR). For loans above Rs. 4 lakh the interest rate will not exceed PLR plus 1 percent.
• The loans are to be repaid over a period of 5 to 7 years with provision of grace period of one year after completion of studies

Tax Benefit

Repayment of an education loan is deductible under section 80E of the Income Tax Act. The yearly limit for deduction is Rs. 40,000 (for both the principal and the interest). Only loans taken for higher education - fulltime studies in any graduate or post-graduate, professional, and pure and applied science courses - may claim deduction. The deduction will be available for a maximum of eight years starting from the day the repayment starts.

Age Limit for Graduation

Age Limit for Graduation 28—30 years relaxable for SC/ST candidates

Documents Required

• Completed Education Loan Application Form.
• Mark sheets of last qualifying examination
• Proof of admission scholarship, studentship etc
• Schedule of expenses for the specified course
• Two passport size photographs
• Borrower's Bank account statement for the last six months
• Income tax assessment order of last 2 years
• Brief statement of assets and liabilities of the Co-borrower
• Proof of Income (i.e. Salary slip/Form 16 etc)

Study Abroad

If you want to study abroad in India, it is possible to obtain education loans. While getting these loans was difficult in the past, it has now become easier than ever before. A large number of national banks in India have created education loans. The terms of these loans will vary with each institution, so it is important to do your research before using them. To get an education loan in India, a student will have to be eligible. The student will need to be between the ages of 16 and 28. The student must also obtain admission for courses, which are recognized by the states or central government of India. Most courses, which are related to computers, are recognized.

Eligibility for Abroad Study

A student is eligible for loan provided he/she is an Indian National, secured admission to Professional, technical courses of one of the identified educational institutions through Entrance Test, selection process. In case of education in the foreign University, institution (for which HO approval is required for its coverage under the Scheme), the student should have got necessary Passport, VISA formalities completed. Here are the expenses considered for loan: Fee payable to College, institute, hostel, examination, Library, Laboratory fee.Purchase of books, equipments,instruments, boarding and lodging expenses in Boarding Houses subject to production of Bills verified by the student borrower, travel Expenses/Passage money for studies abroad, purchase of computers - essential for completion of the Course, any other expense required to complete the course - like study tours, project work, thesis, etc.

Security for both India and Abroad