A student loan is designed to help students pay for university tuition, books, and living expenses. It differs from other types of loans in that the interest rate is substantially lower and the repayment schedule is deferred while the student is still in education. Before accepting any kind of student loan, one should be familiar with its basic attributes.
What does one needs to look at in order to choose a loan?
Ideally, take a loan from a bank located at your place of study than one located where you reside, unless it concerns overseas studies. This is because you will have better access to funds if you take a loan from the place of your study. Secondly, Make sure the repayment period starts only after six to twelve months after you begin your working life. And thirdly, Banks typically prefer to finance students who opt for traditional courses.
For What Professional Courses do Banks generally provide education loans ?
Management students are among the top choices for most of the banks. Technology students from the country's premier institutions can also get student loans from Banks and Medical and engineering college students.
Banks don’t provide loans for students with a bachelor's/master's in Arts . Also, for courses where employment prospects are less (as per Bank’s own evaluation), loans are sanctioned on the basis of the parents' income.
How much Loan you can get ?
All students are required to submit mark sheets of last qualifying examination, poof of admission scholarship, schedule of expenses for the specified course, his/her bank account statement for the last six months, an income tax assessment order for the previous two years, a brief statement of assets and liabilities, of the co-borrower, which is usually the parent or guardian and proof of income, if any.
Some banks require all or any of the following documents as pre sanction documents:
To furnish the following documents along with the completed application form. Relevant information would relate to the guardian and the student both, when the loan is jointly taken.
Most banks are vying with each other to aggressively market personal loans. The student loan segment is being viewed as vast untapped potential. Citibank and ICICI Bank are offering equally competitive schemes. Almost every prominent bank in the country has a student loan scheme in some form. What matters the most to an individual is obviously the cost of credit the terms and conditions for education loans. These, like any other loan, vary among banks. Besides pricing of the product, the most important thing is documentation requirement and the quality of service offered by the bank and the speed at which the loan is approved.
Some banks, such as SBI, also give you a choice between fixed and floating interest rate. Whereas, private and foreign banks offer loans with a fixed interest rate, some banks charge interest on a daily or monthly reducing balance.
Eligibility for getting a loan:
Which Banks are offering Education Loans in India ?
Most of the Private Sector banks, Foreign Banks and Public Sector Banks in India are providing Student Loans. You can visit Banks offering Student Loans in India(refer below) for an overview of various loan Schemes offered by banks in India
Repayment
A student loan has two major advantages over conventional loans - lower interest rates and easier repayment terms. The interest rate on a student loan will generally be at least two percentage points lower than the going market rate for conventional loans, but this will vary somewhat.
Repaying a student loan is different, too. In most cases, payment can be deferred on the principal and the interest until the student is out of school. Repayment typically begins anywhere from six to twelve months after they leave school, regardless of whether or not they complete their degree program. In some cases, repayment begins if course load drops to half time or less, so it is important to check the exact terms and conditions of any student loan.
The student may have multiple options for extending the repayment period, although an extension of the loan term will likely reduce the monthly payment, it will also increase the amount of total interest paid on the principle balance during the life of the loan. Extension options include extended payment periods offered by the original lender and federal loan consolidation. There are also other extension options including income sensitive repayment plans and hardship deferments.
NOTE : ALL THE INFORMATION PUBLISHED ABOVE ARE ONLY FOR REFERENCE
What does one needs to look at in order to choose a loan?
Ideally, take a loan from a bank located at your place of study than one located where you reside, unless it concerns overseas studies. This is because you will have better access to funds if you take a loan from the place of your study. Secondly, Make sure the repayment period starts only after six to twelve months after you begin your working life. And thirdly, Banks typically prefer to finance students who opt for traditional courses.
For What Professional Courses do Banks generally provide education loans ?
Management students are among the top choices for most of the banks. Technology students from the country's premier institutions can also get student loans from Banks and Medical and engineering college students.
Banks don’t provide loans for students with a bachelor's/master's in Arts . Also, for courses where employment prospects are less (as per Bank’s own evaluation), loans are sanctioned on the basis of the parents' income.
How much Loan you can get ?
- Loan for Studies in India Most of the Public Sector Banks in India have categorized Student Loans in two categories. For Studies in India , Students can borrow up to Rs 4 lakh without providing any security or margin. A loan amount of Rs 4 lakhs to Rs 7.5 lakhs can be availed against a third-party guarantee. This loan comes with a five percent margin (what this means is that you will get five percent less the amount sanctioned as loan; you will have to put together the rest of the money). The third-party guarantee can come from an uncle, neighbor or friend standing guarantee for the full amount.
- Overseas study loans : Amounts worth Rs 7 lakhs and above are usually sanctioned against fixed deposits, NSC certificates, property worth the loan amount and a margin amount of 15 percent (what this means, again, is that you will get 15 percent less the amount sanctioned as loan; you will have to put together the rest of the money). Also, if a loan below Rs 4 lakhs comes at x rate of interest, the loan over Rs 4 lakhs is usually charged one percent higher interest. The Reserve Bank of India prescribes the specifics (amount, rate, repayment period) of education loans and the government provides a two per cent subsidy on these loans to the banks.
- Important Note : Indian Banks’ Association (IBA) has recently formed a working group to address the issue of student loans and the rising rate of default. The group has submitted its findings to the Reserve Bank of India and the main suggestion is to make it mandatory for parents or guardians, of the student borrowing loans, to be co-borrowers thereby making them liable for repayment.
All students are required to submit mark sheets of last qualifying examination, poof of admission scholarship, schedule of expenses for the specified course, his/her bank account statement for the last six months, an income tax assessment order for the previous two years, a brief statement of assets and liabilities, of the co-borrower, which is usually the parent or guardian and proof of income, if any.
Some banks require all or any of the following documents as pre sanction documents:
To furnish the following documents along with the completed application form. Relevant information would relate to the guardian and the student both, when the loan is jointly taken.
- Mark sheet of last qualifying examination for school and graduate studies in India
- Proof of admission to the course
- Schedule of expenses for the course
- Copies of letter confirming scholarship, etc.
- Copies of foreign exchange permit, if applicable.
- 2 passport size photographs
- Statement of Bank account for the last six months of borrower.
- Income tax assessment order not more than 2 years old
- Brief statement of assets and liabilities of borrower.
- If you are not an existing bank customer you would also need to establish your identity and give proof of residence.
Most banks are vying with each other to aggressively market personal loans. The student loan segment is being viewed as vast untapped potential. Citibank and ICICI Bank are offering equally competitive schemes. Almost every prominent bank in the country has a student loan scheme in some form. What matters the most to an individual is obviously the cost of credit the terms and conditions for education loans. These, like any other loan, vary among banks. Besides pricing of the product, the most important thing is documentation requirement and the quality of service offered by the bank and the speed at which the loan is approved.
Some banks, such as SBI, also give you a choice between fixed and floating interest rate. Whereas, private and foreign banks offer loans with a fixed interest rate, some banks charge interest on a daily or monthly reducing balance.
Eligibility for getting a loan:
- The applicant (he/she) should be an Indian National.
- He/She must be Age 16-26 years else the age specified by the bank.
- He/she should not be minor.
- He/she must have secured admission to professional/technical courses, through entrance examination test/selection process.
- He/she must have a good academic record.
- He/she must have secured admission on a recognized university in India or abroad.
- He/she should have parents/guardians with stable source of income.
Which Banks are offering Education Loans in India ?
Most of the Private Sector banks, Foreign Banks and Public Sector Banks in India are providing Student Loans. You can visit Banks offering Student Loans in India(refer below) for an overview of various loan Schemes offered by banks in India
- Education loan in Allahabad bank
- Education loan in Andhra bank
- Education loan in Axis bank
- Education Loan in Bank of India
- Education Loan in Bank of Maharashtra
- Education Loan in Bharat Overseas Bank
- Education Loan in Bank of Baroda
- Education Loan in Corporation Bank
- Education Loan in City Bank
- Education Loan in Central Bank of India
- Education Loan in Catholic Syrian Bank
- Education Loan in Canara Bank
- Education Loan in Dhanalakshmi Bank
- Education Loan in Development Credit Bank Limited
- Education Loan in Federal Bank
- Education Loan in HDFC Bank
- Education Loan in Indian Overseas Bank
- Education Loan in Indian Bank
- Education Loan in IDBI Bank
- Education Loan in Jammu & Kashmir Bank
- Education Loan in Karur Vysya Bank
- Education Loan in Karnataka Bank
- Education Loan in Lakshmi Vilas Bank
- Education Loan in Oriental Bank of Commerce
- Education Loan in Syndicate Bank
- Education Loan in State Bank of India
- Education Loan in South Indian Bank Ltd
- Education Loan in SBI Commercial and International Bank Ltd
- Education Loan in The Ratnakar Bank Ltd
- Education Loan in Tamilnad Mercantile Bank Limited
- Education loan in United Bank of India
- Education loan in UNION Bank of India
- Education loan in UCO bank
- Education loan in Vijaya Bank
A student loan has two major advantages over conventional loans - lower interest rates and easier repayment terms. The interest rate on a student loan will generally be at least two percentage points lower than the going market rate for conventional loans, but this will vary somewhat.
Repaying a student loan is different, too. In most cases, payment can be deferred on the principal and the interest until the student is out of school. Repayment typically begins anywhere from six to twelve months after they leave school, regardless of whether or not they complete their degree program. In some cases, repayment begins if course load drops to half time or less, so it is important to check the exact terms and conditions of any student loan.
The student may have multiple options for extending the repayment period, although an extension of the loan term will likely reduce the monthly payment, it will also increase the amount of total interest paid on the principle balance during the life of the loan. Extension options include extended payment periods offered by the original lender and federal loan consolidation. There are also other extension options including income sensitive repayment plans and hardship deferments.
NOTE : ALL THE INFORMATION PUBLISHED ABOVE ARE ONLY FOR REFERENCE
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