look news india
If your child wants to take admission in any institute offering professional courses in India, then he can get an education loan of up to Rs 10 lakh in his name. Whereas, a maximum of Rs 20 lakh can be availed for studies abroad. The loan amount can be higher for courses in prestigious institutes like IIM, IIT, ISB or foreign institutes.
Interest Rate on Educational Loan
Interest rates on education loans are much lower than personal loans. The annual interest on education loans ranges from 7.15 percent to 15.20 percent. However, some banks and financial institutions also give an additional discount of up to 0.5 percent in the interest rate on education loans to female students. Not only this, if the student pays only the interest during the moratorium period, then he gets an additional discount of up to 1 percent.
Education Loan Repayment Period
The repayment period for an education loan can be up to 15 years. Such a long tenure and low interest rate results in lower EMIs. However, if you take a personal loan, you will have to repay the loan amount within seven years. Hence, the EMI amount also increases.
What is the moratorium period in education loan?
A student pursuing a professional course is given one year from the date of completion of the course to repay the loan EMI after taking an education loan. This period of one year is called the moratorium period. This means that there is no need to pay EMIs for one year after the completion of the course. After one year of employment, the loan EMI has to be paid from regular income. Additionally, your bank or financial institution may extend the moratorium period during medical emergencies, unemployment and incubation period or if a student wants to start a start-up after completing his course.
Documents required for education loan
For bank loan, students have to submit 10th and 12th mark sheets, bank passbook, income certificate, identity proof (passport/driving/voter ID), entrance exam result, entrance exam pass proof, age proof, support from both students and parents. Many documents are required including the card. Along with this, it is also checked whether the applicant has any previous loan.
