Educational loan in India
From the year 2001 bank started to giving educatioanal loan for higher education. Indian Bankers Assosiation (IBA) is the main governing body of all bank has renewed the educational loan scheme recently. This revised scheme has been published by IBA and I have summerized the new guidelines below.
Who are eligible?
1) All Indians who has idea to pursue Undergraduate and Post Graduate course in India or foreign countries were eligible to apply for loan.
2) Check your college is recognized by UGC / Govenrment / AICTE / AIBMS / ICMR. If your college is not recognized then you are not eligible for loan.
3) Inspite of graduate course some reputed professional courses were also eligible. So it is better to discuss with your bank manager.
4) Loans will be also sanction for reputed foreign universities
Sites to check your college recognization
WWW.ugc.AC.in for UGC approved colleges
WWW.education.nic.in for government colleges
WWW.aicte.org.in for AICTE approved colleges
WWW.webomatrics.info for foreign colleges
We recommend you to check the approval status only on above given sites. There are many third party sites showing approval status but there may be chances for wrong information.
Expenses covered by loan
Loan will cover expenses such as college fee, hostel fee, exam fee, library payment, book payments and college related stuffs that comprises of laptop, plane ticket for foreign college. This loan will also cover expenses for project and other needs related to your course.
Amount of money you can get
Maximum amount of money provided by bank for pursuing course in India will be Rs.10 lakh. For pursuing course in foreign countries like Australia, USA, New Zealand,UK you will get Rs.20 lakh. This will be the maximum amount of money you can claim. If you are in the need of even more money then that depends on the bank manager.
You should deposit five percent of your loan amount for Indian studies and 15 percent for foreign studies on loan greater than Rs.4 lakh. For loan amount below there is no margin money.
Interest for educational loan depends on the bank. There is interest for educational loan. There will be income tax exemption for the interest you pay for educational loan. This one falls under section 80 E of IT act.
Security means another person who repays your loan amount in case you can't pay on respective duration. For loan amount of Rs.4 lakh you don't need any security. Parents will act as security in this case. For loan above 4 lakh you should need a security. Person signing for security should be capable of paying amount ie he / she should have nice background. Security person can be your relation too.
You should start paying the loan after the completion of your course duration. You can take extra one year (ie) course duration plus one year to start repaying your loan.
You should settle all you loan money before 10 year for loan amount uptown Rs.7.5 lakh. For loan amount above Rs.7.5 lakh the last date will fall after 15year.
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