You borrow money to finance your higher education or college fees. Payments are often deferred while you are in college, and for a six-month grace period after graduation called moratorium period.
Many banks have special education loan schemes for meritorious and needy students. The fee for the course is normally disbursed to the college/institute directly by the bank.
While you apply for an education loan, the bank will verify the tenure of the course and determine its total cost. 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.
You can preserve your savings and still provide for the costly education of your children. You don't have to break your Fixed Deposits.
Banks offer education loans at lucrative interest rates. No collateral for education loans up to INR 7.5 Lakhs.
You don't have to repay the loan until you finish your studies. Repayment is after completion of the course, or getting a job.
You can claim a tax deduction on the interest portion of your educational loan. Tax deduction for a period of 8 years, after you start paying back the educational loan.
You should be an Indian citizen.
You should fall in the age bracket defined by the respective bank.
You need to apply to a recognized college/institution.
You need to apply for the loan with a co-applicant who has a regular source of income.
You need a minimum CIBIL score of 700 for the final sanction of your education loan.
You need a loan application form and passport sized photographs.
Letter of admission received from the college/institution needs to be presented to the bank.
You need mark sheets starting from class 10th to the last qualifying exam you have cleared.
You need a declaration/affidavit to confirm no other loan has been availed.
You need an identity and an address proof.
The co borrower (Your Parents or the third party Guarantor) has to show proof of income (salary slips) as well as the income tax statements of the past 2 years.
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