Features and Benefits of Students Loan
Some of the vital features and benefits of student loans include:
Customised and generous loan amount: Fund up to 100% of education expenses, covering essential aspects like tuition fees, study materials, accommodation, and more.
Low-interest rates: Competitive and fixed interest rates, assuring borrowers that their interest rates will remain unchanged throughout the entire duration of the loan tenure.
Zero collateral: Personal loans for education require no collateral, providing convenient and accessible financing for educational pursuits without the worry of putting valuable assets at risk.
Tax Benefit: The student or their co-signer can claim tax deductions for the loan interest paid. Under Section 80E of the Income Tax Act, this deduction can be claimed for up to eight years.
Completely online process: Instant education loans are available with a completely online process, ensuring a speedy approval process. Once your application is approved, the amount will be swiftly transferred to your respective bank account.
Flexibility: Personal loans are renowned for their remarkable flexibility, allowing borrowers to tailor the loan amount, interest rates, and repayment tenure to align with their unique financial capacity perfectly.
Benefits that go beyond funding: Nowadays, many lenders go the extra mile to cater to their customers by offering additional services that extend beyond mere funding. These services include career development guidance, visa support, and resources on topics that hold great significance for international students.
Eligibility Criteria for Student Loan
When we talk about education loans, aspiring borrowers are inevitably required to meet certain criteria established by the lending institution. And these are the common criteria that applicants typically need to fulfil:
- Indian citizen.
- Secured admission to a recognised course in India or abroad.
- Good academic record.
- Co-applicant to act as a co-borrower.
- Passport/i20 form/visa in case of studies abroad
Interest Rate On Student Loan From Various Banks
When you consider applying for a student loan, it's crucial to compare the interest rates different banks offer. Here is a list of banks that provide the best personal loans for students and their current interest rates, allowing you to make an informed decision:
| Bank | Interest Rates |
| Union Bank of India | 8.20% p.a. onwards |
| Bank of India | 8.25% p.a. onwards |
| Central Bank of India | 8.30% p.a. onwards |
| State Bank of India | 8.30% p.a. onwards |
| Punjab National Bank | 8.55% p.a. onwards |
| IDFC FIRST Bank | 9.00% p.a. onwards |
| Bank of Baroda | 9.10% p.a. onwards |
| Bank of Maharashtra | 9.20% p.a. onwards |
| Canara Bank | 9.25% p.a. onwards |
| ICICI Bank | 9.50% p.a. onwards |
| HDFC | 9.50% p.a. onwards |
| Indian Overseas Bank | 9.75% p.a. onwards |
| Karnataka Bank | 9.95% p.a. onwards |
| Tamilnad Mercantile Bank | 11.15% p.a. onwards |
| Karur Vysya Bank | 11.48% p.a. onwards |
| Federal Bank | 13.25% p.a. onwards |
| Axis Bank | 13.70% p.a. onwards |
Documents Required for Student Loan
To complete the application process for an offline or online education loan, you will typically need to provide the following documents to get an instant personal loan for students:
- Proof of identity (Aadhaar card, PAN card, or Voter ID card)
- Proof of address (Utility bill, rental agreement, driving license, or passport)
- Academic documents (Mark sheets, admission letters, etc.)
- Admission letter from the educational institution along with the fee schedule.
- Self-attested passport-size photograph
- Income proof of applicant/co-applicant (Salary slips, IT returns, bank statements)
Types of Personal Loans for Student
You can choose from different types of personal loans for students in India. Some of the most common types include:
Undergraduate student loans: Undergraduate student loans are specifically designed to support students pursuing their bachelor's degree. These education loans cover tuition fees, educational expenses, and living costs during the undergraduate years. With competitive interest rates and flexible repayment options, undergraduate student loans provide financial assistance without immediate repayment burdens. They often come with benefits like grace periods after graduation, allowing borrowers time to establish their careers before beginning loan repayments.
Graduate Student Loans: Graduate student loans cater to individuals pursuing advanced degrees such as master's or doctoral programs: these education loan finance tuition fees, research expenses, and other academic costs. Graduate student loans may provide higher borrowing limits and favourable interest rates compared to undergraduate loans. They enable students to focus on their studies and advance their education without worrying about immediate financial pressures.
Professional Education Loans/Career Education Loans: Professional education loans, also known as career education loans, are tailored for individuals seeking specialised training or certification programs to enhance their professional skills. These loans support courses in fields such as business, technology, healthcare, or vocational training. Moreover, these easy student loans cover program fees, training materials, and related expenses. They also offer borrowers flexible repayment options, enabling them to effectively manage loan repayments while making significant strides in advancing their careers.
Study Abroad Education Loan: Study abroad education loans are designed to assist students who wish to pursue their education in foreign countries. These personal loans for students comprehensively cover expenses like tuition fees, living costs, travel expenses, and other study-related expenditures abroad. Besides, these study abroad education loans offer competitive interest rates and flexible repayment terms, enabling students to fulfil their international academic aspirations.
Education Loan EMI Calculation
Understanding the EMI calculation is crucial before considering any instant loan for students. You can use the following formula to calculate the EMI for your education loan.
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Where: P = Loan amount; R = Monthly interest rate; N = Loan tenure in months
Notably, by utilising online EMI calculators, one can effortlessly determine the monthly instalment of personal loans for students.
How to Apply Personal Loan for Education
Applying for education loans become easier with the advent of online education loans. Here are the general steps to follow for an education loan online application:
- Research different lenders and compare their interest rates and terms.
- Check your eligibility and gather the necessary documents (discussed in the next topic).
- Visit the lender's website or use their mobile application to fill out the online education loan and submit it along with the required documents.
- Await approval and verification from the lender.
- Upon approval, review the loan terms and conditions, including interest rates, repayment tenure, and any associated fees.
- Sign the loan agreement and receive the funds in your designated bank account.
Tips for Responsible Borrowing Education Loan
- Assess your repayment capacity before taking on a loan.
- Borrow only the required amount and avoid excessive borrowing.
- Compare interest rates and terms offered by different lenders.
- Read the loan agreement thoroughly and understand the terms and conditions.
- Plan your finances and create a budget to manage loan repayment effectively.
- Pay your EMIs on time to maintain a good credit score.