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Nitty- Gritties of Education Loan in India

Education loan aims at providing financial support to deserving/meritorious students for pursuing higher education in India and abroad.

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Nitty- Gritties of Education Loan in India

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  1. Nitty- Gritties of Education Loan in India

  2. Education finances are boon for people who want to do higher studies but could not afford it. Education Loan in India is provided by banks and financial institutions and covers fee for all years, which is normally disbursed to the college/institute directly by the bank. The finance amount also covers most of the boarding and lodging expenses. Here are answers to questions that boggle one's mind before taking an education loan:

  3. What are the eligibility criteria? • The person taking the loan should have secured admission in the institute. The institute or course of study must be recognized by UGC/AICTE/AIBMS/ICMR, etc. The person needs to be an Indian citizen and should be 17 years old or above.

  4. What are the courses covered? • Education Loan in India is available for all approved courses leading to Graduate/Post Graduate Degree and PG Diploma conducted by recognized colleges/universities recognized by UGC/AICTE/AIBMS/ICMR, etc. Education Loan is also available for part time courses and job oriented courses subject to employability and earning potential. An education loan for study abroad is also available for job oriented professional/technical courses offered by reputed universities.

  5. What are the expenses covered? • The amount is provided to meet all type of expenses which are necessary for completion of course that includes purchase of books, equipments, computer, travelling, study tours, boarding, lodging besides all types of fees.

  6. What are Documents required? • Documents like age proof, address proof, proof of clearing last qualification, prospectus of course, letter of admission, income proof of parents or guardians, etc are mandatory to be submitted even before the bank considers the loan application. The bank will verify the enrollment of the student from the concerned institute. One may also require collateral security such as papers relating to property to be mortgaged if the loan amount is above Rs. 4 lakh.

  7. Some banks or financial institutions require all or any of the following documents as pre sanction documents: • Loan application • Passport size photographs • Proof of Address • Proof of Age • Copy of PAN of student Borrower • Proof of having cleared last qualifying examination

  8. Letter of admission • Prospectus of the course wherein charges like Admission Fee, Examination Fee, Hostel Charges etc. are mentioned • Details of Assets & Liabilities of parents/guardians/guarantors • In case loan is to be collaterally secured by mortgage of IP, copy of Title Deed, Valuation Certificate and Non-encumbrance Certificate from approved Lawyer • Photocopy of Passport & Visa in case of study abroad • Any other document/information, depending upon the case and purpose of the loan

  9. What is moratorium period or holiday period? • It is the maximum time given to the student after finishing studies that go without catering any payments for your loan. Mostly, it range from 6 to 12 months.

  10. What is the repayment tenure? • The repayment tenure depends on the amount of loan taken and type of course. The minimum time given to repay the loan is 1 years and maximum is 10 years.

  11. Why guarantor is mandatory? • The guarantor could be an applicant's parents or guardians who take the responsibility for the repayment of loan in case of any mishap. The bank will go through the guarantor's credit history and also verify the same before sanctioning the loan.

  12. Is there any tax benefit? • The moment a person start repaying the education loan, he/she can deduct the interest amount from the total income while calculating tax. This means the effective interest rate on the loan works out to a lower amount.

  13. Source: http://www.sooperarticles.com/education-articles/nitty-gritties-education-loan-india-1324015.html https://www.facebook.com/AvanseEducationLoan https://www.linkedin.com/company/avanse-financial-services https://twitter.com/avanseeduloan https://www.youtube.com/channel/UCcsuUx1EH1C08XmX2embpug

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