BASICS OF EDUCATION LOAN : How to ge tEducation Loan !

BASICS OF EDUCATION LOAN : How to ge tEducation Loan !
BASICS OF EDUCATION LOAN : How to get Education Loan !

Table of Contents

* What is education Loan ?
* Qualification and Documents
* Debt financing and other requirements
* Student loan interest
* Benefits under income Tax Act
* How will i get loan ?


An education loan, also called Student Loan or Education Loan, is borrowed to meet education or school expenses.

 Payment for the six-month grace period after school and after graduation is often postponed. It includes basic course fees and other related expenses such as (college) housing, examination and other diversified fees and a student is the main borrower but his parents, spouse, co-applicants can be.

It is provided to those students who want to get higher education in India or want to get higher education abroad. The maximum amount given for study in India and abroad is different and different from one bank to another.
To apply for education loan, an Indian should be a citizen who has obtained admission in a recognised college / university recognised by a competent authority in India or abroad.

The applicant must have completed his higher secondary level schooling. Some banks offer loans even before admission to university.

According to the RBI guidelines, there is no restriction on the upper age limit, but some banks may have it. Banks need additional documents such as admission letters, fee structure, tenth, twelfth and graduation mark (if applicable) mark-shits. Apart from this, the required income documents such as co-applicant's salary slip or income tax return (ITR).
Banks can lend up to 100% on the basis of the amount. At present, for loans up to Rs 4 lakh, margin money is not required.

For study in India, 5% of the required funds have to be financed by the applicant. On the other hand, for studying abroad, the required margin money increases up to 15%.

Banks also demand bail for a loan of more than Rs 7.5 lakh. At present, banks do not ask for any collateral or third party guarantee for loans up to 4 lakh rupees. For loans up to Rs 7.5 lakh, up to Rs 4 lakh, a third party guarantee is required.

Loan for more than Rs 7.5 lakh is sought for bail.
Once the loan application is accepted, the banks distribute the amount directly to the college / university as per the fee structure provided.

Education loan is usually paid by the student. Generally, repayment begins when the course is completed.

Some banks offer a 6-month rebate period or a repayment after one year after completion of the job. The repayment period usually ranges between 5 to 7 years, but it can be extended beyond this.
Banks use the Marginal Cost of Funds based lending rate (MCLR), as well as an additional exposure to determine the interest rate. At present (in 2019), the additional expansion is in the 1.35-3% range i.e. around 11-15% interest rate of MCLR received, again this interest is fixed on the applicant's eligibility.
IT Act allows deduction of interest paid on Section 80E. This deduction is allowed only for those who give interest on education loan for themselves, husband or wife or student, for whom you are a legal guardian.

You can deduct the entire interest amount paid by your taxable income. This deduction is allowed for up to 8 years and upto Rs 40000 per year, but the basic amount is not eligible for any tax deduction.

There is a very good medium available for taking education loan or student loans, banks and NBFCs and other loan workers are in this market.

Applicants can also go to the offices of the above mentioned institutions or apply online. In order to obtain this loan, there is no need for anything other than the above mentioned documents and eligibility.

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