Eligibility
Banks have set eligibility for students as well for co-applicant.The student should be an Indian national with good academic track record and has secured admission to a recognized University/College. All loans require a co-applicant who has to fulfill the basic criteria to apply for an educational loan.The co-applicant can be a salaried or self employed parent, sibling or a relative with a steady source of income.The age, annual income, work experience in the current organization and total work experience, educational qualification and profession of the co-applicant are all considered by banks to decide on a amount for an educational loan.
| Bank | Minimum Age (in yrs.) | Minimum Income (in Rs.) | Minimum Work Experience (yrs.) | Residence Status (yrs.) | ||||
|---|---|---|---|---|---|---|---|---|
| Salaried | Self | Salaried | Self | Salaried | Self | Salaried | Self | |
 Axis bank | No Age Criteria Provided | No Age Criteria Provided | Income Criteria Not Available | Income Criteria Not Available | Co-Applicants Minimum 2 years in employment and minimum 1 year in the current organization | Co-Applicant Experience will be considered | Information Not Available | Information Not Available |
 HDFC Bank | Student Age:16 - 35 yrs;Co-Applicant Age:21-60 Years | Student Age:16 - 35 yrs;Co-Applicant Age:25-65 Years | Co-Applicants Minimum Net Monthly Income : Rs. 10,000 p.m. for Tier 1 & Tier 2 cities ( Rs. 8,000 in | Self employed (Professionals):Rs. 1 Lakh per annum for Doctors , CA s , CS , Architects ;Self Employ | Co-Applicants Minimum 2 years in employment and minimum 1 year in the current organization | Minimum 3 years in current business and 5 years total business experience ;Self Employed (Individual | Information Not Available | Information Not Available |
Documents Required
Documents from Student
* Completely filled Application Form with Photographs.
* Letter of admission from the Institute.
* Cost break up of the program from the Institution stating the Tuition fees- term-wise, year-wise and any other expenses.
* Students entire academic record in the form of marksheets starting from class X to the last qualifying exam cleared.
* Declaration/Affidavit confirming that no loan has been availed from other Bank/Institution.
* Address Proof: Passport, Driving license, Ration Card, Voter's ID Card, Bank statement.
* ID Proof: Photo Pan Card, Passport, Driving License or Voter's ID card.
* Signature Proof: Bank Signature Verification, Photo Pan Card, Passport, Driving License or Voter's ID card.
* Age proof: Bitrth Certificate or 10th Class passing Certificate.
Documents for Studies Abroad - In addition to the above list of documents:
* Letter from the Head Of Department of the University.
* Visa approval papers.
* Travel papers.
* GMAT/GRE/SAT score.
* I-20 in case of applicant going to the USA.
* Progress reports in the form of mark sheets or a letter from the Institute, while processing the fresh disbursement tranch.
Documents for Co-Applicant if Salaried:
* ID Proof: Photo Pan Card, Passport, Driving License or Voter's ID card.
* Address Proof: Ration card Telephone or electricity/water Bill, Rental agreement, Passport copy.
* Bank Statements for last 3 months.
* Latest salary slip or current dated salary certificate with latest Form 16
Documents for Co-Applicant if Self employed (Professionals/Individual ):
* ID Proof: Photo Pan Card, Passport, Driving License or Voter's ID card.
* Address Proof: Ration card Telephone or electricity/water Bill, Rental agreement, Passport,Trade licence /Establishment/Sales Tax certificate.
* Bank Statements for last 6 months.
* Latest ITR along with computation of income, B/S & P&L a/c for the last 2 yrs. certified by a CA.
* Latest ITR along with computation of income, B/S & P&L a/c for the last 2 yrs. certified by a CA.
*Qualification proof of the highest professional degree.
*Proof of continuation of business :Trade licence /Establishment /Sales Tax certificate.
*Sole Propieter Declaration Or Certified Copy of Partnership Deed, Certified Copy of MOA, AOA & Board resolution.
Documents Required Post Loan Sanction:
* Education Loan Agreement.
* SI/ECS Mandate as applicable.
* Post Dated Security Cheques as per Bank Policy.
Education Loan FAQs
Educational Loans are available to meritorious students for studies in India or abroad. The loan is given out to students admitted to Institutions and Colleges approved by the bank. The Loan covers fee for all years, which is normally disbursed to the college/institute directly by the bank. The loan also covers most of the boarding and lodging expenses.
Students who wish to pursue higher education .You need to be an Indian resident having secured admission in any of the bank's list of approved course or universities.
- Management Courses ( Full-Time + Part Time ) - PostGraduation
- Engineering Courses ( Government + Private ) - Graduation
- Medicine - Graducation + Post Graducation
- Masters in Computer Application ( MCA/MCM) - Post Graduation
- Online / Distance Learning courses.
Wherever it is a private institution,the same has to be recongized by the relevant/competent government body.
- Fine Arts and Designing - Graduation + Post Graduation
- Architecture - Graduation
- Hotel and Hospitality - Graduation + Post Graduation
- Agriculture - Post Graduation
- Pure Science - Graduation + Post Graduation
- B.A./B.Com/M.A./M.Com
- Courses such as SAP , ERP , GNIIT , Air Hostess Training programmes etc.
Besides the above mentioned ,other Institute to be rated on the basis of their listing with the AICTE etc.
Anyone in the age group of 16-35 years can take this loan.
- Fee Payable to College/School/Hostel
- Exam/Library/Lab fees
- Caution deposit / Refundable deposit asked by the institution/Building fund - upported by Institution bills/receipts
- Purchase of Books/equipments/instrument/uniforms
- Travel expenses/passage money for studies abroad
- Purchase of computers - essential for completion of the course
Any other expense required to complete the course - like study tours, project work, thesis, etc.
100% loan is available for select courses. Margin ranges from 5-15 % for courses in India & Abroad .Depends from Bank to Bank.
Yes. A moratorium/repayment holiday is available for select courses.
Moratorium Period is a holiday on repayment which would be for the course period + 1 year or 6 months after the student gets a job/start earning whichever is earlier. Some banks will also allow you a moratorium on payment of interest. This means that you can defer payments of even the interest during this period. Hence, there is no need to pay anything to the bank at all. If you opt for this option, then the interest is compounded quarterly and added to the principal sum for repayment. This option carries a higher rate of interest, but is a boon to those who cannot repay the loan during the course.
Interest would have to be paid during the moratorium, the interest servicing would be of simple interest calculated on the loan amount disbursed payable monthly. Some banks will also allow you a moratorium on payment of interest. This means that you can defer payments of even the interest during this period. Hence, there is no need to pay anything to the bank at all. If you opt for this option, then the interest is compounded quarterly and added to the principal sum for repayment. This option carries a higher rate of interest, but is a boon to those who cannot repay the loan during the course.
Repayment is done on an EMI (equated monthly installments) basis at the time of starting the repayment, by giving standing instruction to the bank, having an ECS(electronic clearing services) with the bank or by giving PDC(post dated cheques) to the bank.
If you are unable to complete the course, you will have to start paying the EMIs immediately. Some banks might give you a grace period, either to continue your studies or to start repaying the loan, but this is entirely at their discretion.
Maximum tenure of the loan can be 7 years including moratorium period.
Yes, a co-applicant is required for all Full-Time courses . The co-applicant can be your parents, siblings, spouse or Family Relative . Loan eligibility would be calculated on the basis of the co-applicant's income. In case of Part Time courses, No Co-applicant required. However in order to increase the eligibility a co-applicant may be added.
Declaration/Affidavit confirming that no loan has been availed from other Bank/Institution
- Completely filled Application Form with Photographs.
- Letter of admission from the Institute
- Letter from the Institute stating cost break up of the program (term-wise, year-wise)
- Marksheets from SSC onwards till the latest examination passed
- KYC Documents for the Applicant & Co-applicant (Residence Proof , ID Proof , Signature Verfication Proof , Age proof )
- Income Documents of the Co-applicant ( Pay Slips / ITR copy etc )
- Declaration/Affidavit confirming that no loan has been availed from other Bank/Institution
For studies abroad - In addition to the above list of documents - Pls Provide :
- Letter from the Head Of Department ( University)Visa approval papersTravel papersGMAT/GRE/SAT scoreI-20 in case of applicant going to the USA
For loans with Moratorium :
- Studying in India - Max Rs. 10 Lakhs
- Studying abroad - Max Rs. 20 Lakhs
For Loans without Moratorium :
- Studying in India - Max Rs. 7.50 Lakhs
- Studying abroad - Max Rs. 10 Lakhs
The fee for all years is normally disbursed to the college/institute directly by the bank. While applying for a loan, the bank will verify the tenure of the course and determine its total cost as applicable at that point of time. Every year, you are required to submit a form to the bank which gives the details of the money required, after which the bank directly disburses the loan to the college/ institute.
Although the bank may be in India, you can get your education loan amount in dollars for studies overseas; the amount is paid directly to the institution abroad. Banks charge you a fee for the remittance.
Yes. Tuition & hostel fee will be disbursed directly to the educational Institute as per the schedule of fee given by the Institute/college ( semester - wise/yearly).
Progress reports to be provided at the time of every disbursement. Progress report includes mark sheets or a letter from the Institute, in case the mark sheets are not available while processing the fresh disbursement.
The following documents have to be submitted post the sanction of the loan
- Education Loan Agreement
- SI/ECS Mandate as applicable
- Post Dated Security Cheques as per Policy
- Any other documents which might be required as per policy.
Collaterals are required only for educational Loans above Rs.7.5 lakhs. The acceptable collaterals are:
- Fixed deposits
- Property (Residential
Once you start repaying the loan, you can deduct the interest amount from your total income while calculating tax. So, the effective interest rate on the loan works out to a lower amount for that particular year.
Banks offer lower interest rates if you start repayment during the moratorium period.
If you have opted for a floating rate loan, you cannot switch to a fixed rate option mid-course. However, you can transfer your loan from one bank to another, if you find a more attractive offer. Normally, one per cent of the outstanding loan amount is charged to the borrower in the case of a loan takeover. You need to work out whether the amount you save by switching to a lower-cost loan is more than the switching cost.
If you have opted for a floating rate loan, you cannot switch to a fixed rate option mid-course. However, you can transfer your loan from one bank to another, if you find a more attractive offer. Normally, one per cent of the outstanding loan amount is charged to the borrower in the case of a loan takeover. You need to work out whether the amount you save by switching to a lower-cost loan is more than the switching cost.
Depending on the bank offering an educational loan, there is a prepayment penalty of 5% on the outstanding principal amount. There are some banks which do not have a prepayment penalty.
Second time Education Loan can be sanctioned to the same student borrower for completion of next higher course at the discretion of the Bank. A student who has taken the loan for a Bachelors degree can apply for another loan for the completion of Master's degree.
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