What is Education Loan

An education loan is a sum of money borrowed for higher education-related expenditures. Education loans are proposed to cover the cost of education, books and supplies, and living expenditures. Education loans are issued for the purpose of attending college or university degree. Education loans can be acquired from the government or through private-sector lenders.

    Types of Education Loan

    Undergraduate Education Loan – This loan is available for those who have completed their secondary education and looking for higher education.

    Graduate Education Loan – This loan is available for those who have completed their under graduation and looking for higher education.

    Career Education Loan – Career loan is available for students who wish to attend career-oriented programs like trading, technical courses etc.

    Loans for parents – This loan is available for student’s parents, to meet expenditure related to their child’s education.

    Who provide Education Loan– Banks and other moneylenders provide education loan facility. You can directly reach out to them by online or offline.

    Documents required for education loan –

    Documents required for Education Loan (salaried individuals)

    • KYC documents
    • Bank Statement last 6 months
    • Guarantor Form
    • Copy of admission letter of the Institute along with fees schedule
    • Mark sheets / passing certificates of S.S.C., H.S.C, Degree courses
    Documents for Education Loan for all other Individuals
    • KYC documents
    • Bank Statement of last 6 months
    • Guarantor Form
    • Copy of admission letter of the Institute along with fees schedule
    • Mark sheets / passing certificates of S.S.C., H.S.C, Degree courses

     

    How to apply for Education Loan –

     You can apply online or directly visit the bank or moneylenders office. You need all the basic documents to avail education loan.

    Benefits of Education Loan

    Some are the benefits or advantages of education loans are:

    Coverage: Education loan covers other course related expenses like exam fee, hostel expenses, library charges, cost of books, travel expenses etc.

    Tax benefit: Under Section 80E of the Income Tax Act, entire interest on education loan qualify for income tax deduction. 

    Moratorium Period: Moratorium period is like a holiday period for borrower during the loan term. During moratorium period, they do not need to repay the loan. In education loans borrower gets moratorium period for 6 months to 1 year from the date of completion of the course.