You can apply through your chosen lender’s website or visit a branch to submit the application in person.
Education Loan
With tuition fees rising and the cost of living increasing globally, many students in India are turning to education loans to fund their academic goals. Studying in India or abroad can be a life-changing opportunity, but it’s rarely cheap. That’s why understanding the details about education loan options is one of the smartest things you can do before applying.
What Is an Education Loan?
An education loan helps students pay for their studies, which includes tuition, accommodation, travel, exam fees, and even study materials.
In India, to be eligible for a student loan, you must:
- Be an Indian citizen
- Be at least 18 years old
- Have secured admission to a recognised course or university
- Have a co-borrower (usually a parent or guardian) with a steady income
While exploring various details about student loan options, you will find that you can apply for financial support for both undergraduate and postgraduate programs, whether in India or overseas.
There are two main types of loans:
- Secured loans need collateral like property or a fixed deposit. They usually come with lower interest rates.
- Unsecured loans do not require collateral, but depend on your co-applicant’s income and credit score. They are processed faster but usually carry slightly higher interest rates.
Details About Education Loan – What You Need to Know
Student loan details go beyond just borrowing money. Here are the main elements to look at:
- Coverage: Most loans cover tuition, accommodation, exam and library fees, airfare (for international courses), and other living expenses.
- Collateral/Guarantor: Collateral is often required for high-value loans. Acceptable assets include residential property and fixed deposits.
- Interest Rates: Rates vary based on the lender and whether the loan is secured or unsecured.
- Moratorium Period: This is the time when you don’t have to repay the loan—typically the course duration plus 6 to 12 months.
- Repayment Terms: Loans are usually repaid over 10 to 15 years through monthly EMIs after the moratorium ends.
How to Apply: Step-by-Step Guide for Students
Understanding the details about education loan applications helps avoid delays and confusion. Here’s what the process typically looks like:
Compare Lenders
Research various lenders who offer financing for education loans, including education-focused lenders like Avanse.
Secure Admission
Most lenders will ask for a confirmed admission letter from a recognised college or university. Ensure you receive an admission letter before applying for a loan.
Prepare Your Documents
You would need to submit identity and address proof, academic records, and co-borrower income documents. If you’re opting for a secured loan, you must also submit your collateral paperwork.
Submit Your Application
You can apply through your chosen lender’s website or visit a branch to submit the application in person.
Wait for the Review
Your lender will check all your documents and may request a personal discussion or additional details to better understand your academic and career plans.
Loan Sanction and Disbursal
Once approved, the loan amount is transferred directly to the educational institution in instalments as per the agreed schedule.
Additional Requirements for an Education Loan for Studying Abroad
If you’re looking for an education loan for studying abroad, there are a few extra steps to keep in mind:
Additional Documents
You’ll need a passport, visa, admission letter, and proof of language proficiency and entrance tests like GRE/IELTS.
Currency Considerations
Some lenders disburse funds in foreign currency or offer protection against exchange rate fluctuations.
University Partnerships
Lenders often work with popular international universities, which can simplify paperwork and improve your chances of approval.
Important Details About Education Loan to Ease Applications
Here are a few student loan details that applicants may overlook. Doing so could lead to rejection or future financial difficulties:
The Fine Print
Always read the terms and conditions carefully. Ensure you understand the loan agreement before you sign it. You can discuss the terms with your lender and ask for additional explanations, if required.
EMI Amounts
Some loan applicants do not understand their future financial liabilities, which can lead to missed payments and other complications. Consider using an online calculator to estimate the EMI amount and ensure repayment is manageable after graduation.
Moratorium Interest
Some lenders charge interest during the moratorium period, which adds to the loan total. If you forget to factor in this amount, you may end up with higher EMIs than estimated.
Borrowing the Right Amount
When applying for a student loan, it’s crucial that you take only what you need. Unnecessary borrowing increases future stress.
Picking the Tenure
A longer term reduces EMIs but increases the total interest paid. Weigh all your options and consider the total loan cost before deciding on your loan tenure.
Details About Study Loan – Benefits to Remember
Flexible Repayments
Several lenders offer flexible repayment tenures, empowering you to focus on your education without stressing about your finances.
Build Your Credit Score
Opting for an education loan can help you build your credit score. Timely EMI payments bolster your credit report, making it easier for you to apply for other financial products in the future.
When you understand the details about education loan options, you’re more likely to make smart choices. You’ll know what to expect, how much you can borrow, and which lender suits your needs. This knowledge helps you avoid unnecessary costs and keeps you in control of your finances. Whether you’re pursuing a specialised degree in India or heading overseas for an international course, opting for a loan from an education-focused lender like Avanse can ease your journey.
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