Do you have dreams of studying your favourite subjects in a reputed university? Or just maybe you want to study abroad? What is stopping you? Give wings to your dreams. But, how can you do this with soaring education costs, especially for quality education? You are right, but not entirely so.
You can give wings to your dreams by availing an Education Loan. Education Loans are essentially secured loans. Yes, you are right, but not entirely. You can avail an Education Loan without collateral.
Education Loans are designed keeping in mind the needs of aspiring students. Education Loans gives you the right financial support at the right time. Whether you want to take up higher professional studies or technical education courses like medicine and management studies in India or abroad, Education Loan is the answer.
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An Education Loan covers your college tuition fees, exam and library fees, books and course-specific equipment like computers, accommodation charges and travelling expenses, in case you are studying abroad.
Let us quickly glance through the aspects of an Education Loan regarding collateral.
1. A maximum amount of Rs 10 Lakhs can be availed as an Education Loan, if you opt to study in an Indian University.
2. The maximum amount increases to Rs 20 Lakhs, if the Education Loan is for studying abroad.
3. Collateral is not required for Education Loans that are up to Rs 4 Lakhs. Few banks offer Education Loans without security for a higher loan amount, ranging from Rs 5 Lakhs to Rs 7.5 Lakhs.
4. If the Education Loan amounts exceed Rs 4 Lakhs or a higher specified amount as the case may be, then you will have to provide collateral and a third-party guarantee to the bank.
5. In most cases, a third-party guarantee is given by the parents of the student and covers up to 75% of the amount in case of a default.
6. Certain NBFCs (Non-Banking Finance Corporations) provide Education Loans up to Rs 50 Lakhs without collateral.
7. The interest rate on such Education Loans varies from 10.5% to 13.5% a year.
8. Interest paid on Education Loans are eligible for Tax Benefits under Section 80E. This is only for the interest component. But beware! Not all non-collateral Education Loans are eligible for the same.
What happens if, for some reason, you stop repaying your education loan? This is when collateral plays a role. Banks can seize the collateral and recover their dues from you.
So, if you are facing difficulty in arranging collateral for that education loan, then you must look for banks that offer a higher loan limit, without collateral.
As mentioned, you can get an Education Loan without pledging any security/collateral. But, the maximum loan amount you can avail is Rs 4 Lakhs. If you want a higher loan amount and are not comfortable pledging any security with the bank, you have plenty of options to do so. Financial lenders like some NBFCs provide Education Loans without collateral.
If you are a working professional looking forward to availing higher education, you have an alternative where you don’t need to pledge any security. You have an option of availing a Personal Loan for a quality education.
Personal Loans do not require any collateral or guarantor.
What are you waiting for? Go and avail the best Education Loan that the lender has to offer. Good news, if banks see that you are a deserving and meritorious student, the loan amount can be extended above Rs 7.5 Lakhs without collateral! So, go realize your dreams, a good education can make a big difference.
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