•  Content Creator : Ashmeet
• 12-08-2024

Education is a fundamental pillar for personal and national growth. In India, the rising cost of education has made it increasingly challenging for many students to pursue higher studies. Education loans have emerged as a crucial financial tool, enabling students to access quality education without the immediate burden of hefty expenses. Explore the various aspects of education loan for students in India, including types, benefits, and the role of banks.

The Importance of Education Loans

Education loans are designed to cover a wide range of expenses related to education, including tuition fees, books, accommodation, and other incidental costs. These loans ensure that financial constraints do not hinder students from pursuing their academic goals. With India's growing emphasis on higher education and skill development, the demand for education loans has surged significantly.

Types of Education Loan

Education loans to study in India are categorized based on various factors such as the course, institution, and the loan amount. Here are the main types of education loans available:

• Undergraduate Education Loan: These loans are designed for students pursuing undergraduate courses in India or abroad. They cover tuition fees, accommodation, books, and other related expenses.
• Postgraduate Education Loan: For students aiming to pursue postgraduate degrees such as Master's, MBA, or other specialized courses, these loans cover similar expenses as undergraduate loans but often offer higher loan amounts.
• Professional Education Loan: Specifically for students enrolling in professional courses like engineering, medical, law, and management, these loans cater to the higher costs associated with such programs.
• Career Education Loan: These loans are aimed at students taking career-oriented courses, which may include vocational training, diploma programs, and short-term courses that enhance employability.
• Student Loan for Studying Abroad: Designed for students who wish to pursue their education outside India, these loans cover tuition fees, travel expenses, accommodation, and other related costs.
• Loan for Parents: Some education loans are structured to allow parents to take out loans on behalf of their children to cover educational expenses.
• Education Loan for Distance Learning: For students enrolled in distance learning or online education programs, these loans provide financial support similar to traditional education loans.
• Skill Development Loan: These loans support students enrolling in skill development and certificate courses aimed at enhancing specific skills for better employment opportunities.

Banks in India that Provide Education Loan

Several banks in India provide education loans for studies in India to help students finance their education. Here are some of the prominent banks offering education loans:

• State Bank of India (SBI): Offers education loans under schemes like SBI Student Loan Scheme, SBI Global Ed-Vantage Scheme for studying abroad, and SBI Skill Loan Scheme.
• Punjab National Bank (PNB): Provides education loans under PNB Saraswati, PNB Udaan for studying abroad, and PNB Prathibha for premier institutions in India.
• HDFC Bank: Offers education loans for higher studies in India and abroad with flexible repayment options and competitive interest rates.
• ICICI Bank: Provides education loans for undergraduate, postgraduate, and professional courses both in India and abroad.
• Axis Bank: Offers education loans for students pursuing higher education in India and overseas with options for a moratorium period.
• Bank of Baroda: Provides education loans under the Baroda Gyan, Baroda Scholar for studying abroad, and Baroda Vidya for school education.
• Canara Bank: Offers education loans for pursuing studies in India and abroad under various schemes like Vidya Turant and Vidya Sahay.
• Union Bank of India: Provides education loans for higher education in India and overseas, including specialized schemes for premier institutions.
• IDBI Bank: Offers education loans for various courses in India and abroad with flexible repayment terms.

Compare Top Education Loan Offers 2024

How to Apply for an Education Loan?

Wondering how to get an education loan in India? Securing an education loan in India involves several steps, starting with determining eligibility, which typically includes being admitted to a recognized institution, having a good academic record, Indian citizenship, and meeting age criteria. 

Next, research and compare different banks' education loan schemes, focusing on interest rates, repayment terms, loan limits, and any special schemes for specific courses or institutions. Calculate the total expenses for your education, including tuition fees, accommodation, books, travel, and other living costs. Prepare necessary documents such as proof of admission, academic records, identity and address proof, income proof of the co-applicant, and collateral documents if required. 

Fill out the loan application form accurately and submit it with the necessary documents to the chosen bank. The bank will review your application, conduct background checks, and assess the co-applicant's creditworthiness. If approved, the bank will issue a sanction letter detailing the loan amount, interest rate, and repayment terms. 

Upon acceptance, the loan amount is disbursed directly to the educational institution or as agreed. Understand the repayment terms, including the moratorium period, with repayment typically starting 6-12 months after course completion or upon securing a job. For additional guidance, consult bank representatives to ensure a smooth application process.

Benefits of Education Loans

Education loans come with several benefits, making them an attractive option for students and parents:

• Accessibility: They provide access to higher education that might otherwise be unaffordable.
• Deferred Repayment: Most education loans offer a moratorium period, allowing students to start repayment after completing their course and securing a job.
• Tax Benefits: Interest paid on education loans is eligible for tax deduction under Section 80E of the Income Tax Act.
• Flexible Repayment Options: Banks offer various repayment plans, including EMI options that suit the borrower's financial situation.
• Boost to Career: By facilitating higher education, loans help students acquire better qualifications, leading to improved career prospects and higher earning potential.

Final Words
Education loan for students in India plays a pivotal role in empowering students to pursue their academic and career aspirations. They bridge the financial gap and make quality education accessible to a broader demographic. However, it is essential for students and their families to carefully evaluate the terms, interest rates, and repayment plans before opting for a loan. With the right approach, education loans can be a stepping stone to academic success and a promising future.