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Education Loan Features
Pre Admission Sanction
Maximum Loan Repayment Tenure
Tax Benefit U/s 80 (E)
Education Loan - Benefits
1
Avail high value loans
Before applying for the loan, prepare a business plan, know your credit score, decide the loan amount, do some market research on available business loan options, and keep the documents ready.
2
Enjoy attractive interest rates
Proof of address & photo identity proof of the promoters, business proof, income proof, partnership deed for partnership firm, articles of association, memorandum of association, board resolution, PAN card, etc.
3
Pre Admission Sanction
Applicants should be aged between 21 to 65 years, having business vintage of a minimum of 3 years. The minimum business turnover and a minimum annual turnover as per the ITR will be required. The business should be profit-making for at least the last 1 year.
Features and Benefits of our Education Loan
- Flexible Financing: Cover tuition fees, living costs, and more.
- Wide Course Range: Available for various courses and institutions.
- Affordable Rates: Competitive interest rates for cost-effective borrowing.
- Moratorium Period: Repayment starts after course completion.
- Collateral Options: Choose between Collateral and Non-Collateral Loans.
- Co-borrower Support: Parents can enhance eligibility as co-borrowers.
- Tax Benefits: Possible tax deductions on interest repayment.
- Convenient Application: Apply online for a hassle-free experience.
- Direct Disbursement: Funds disbursed directly to the institution.
- Tailored Repayment: Flexible repayment options, including EMIs.
- Inclusive Eligibility: Open to Indian residents, NRIs, and some foreign nationals.
- Future Studies Covered: Loans might include funding for further courses.
- Added Value: Some lenders offer insurance and career support.
Education Loan Eligibility and Documents
Read on to know the criteria required to apply for our Education Loan.
Eligibility Criteria
Education loan eligibility criteria can vary depending on the country of study, the lender, and the type of loan you're applying for. However in a general overview the factors that often influence education loan eligibility are:
Age: Most lenders have a minimum and maximum age requirement for loan applicants. Typically, you need to be of legal age (18 or older) to apply for a loan.
Course/Program Eligibility: Education loans are often tied to specific educational programs or courses. Lenders may have a list of eligible institutions and programs that qualify for loans.
Admission Offer: Many lenders require proof of admission to an eligible educational institution before approving a loan application.
Academic Performance: Some lenders might consider your academic performance as part of the eligibility criteria. This could include factors like your high school or previous education grades.
Co-borrower or Guarantor: If you have limited credit history or income, some lenders might require a co-borrower or guarantor (usually a parent or guardian) who will share the responsibility of repaying the loan if you are unable to do so.
Credit History: Student's as well as their co-borrower/guarantor's credit history and credit score can play a significant role in determining your eligibility for an education loan. A good credit history can improve your chances of approval and may lead to more favorable loan terms.
Income/Financial Ability: Some lenders may consider your ability to repay the loan based on your income or your co-borrower's income.
Loan Amount: The loan amount you're requesting in relation to the cost of the program might affect your eligibility. Lenders may have specific limits on the loan amount they are willing to offer.
Collateral or Security: In some cases, lenders might require collateral or security against the loan, especially for larger loan amounts. This could be in the form of property, investments, or other valuable assets.
Documentation: You will likely need to provide various documents as part of your loan application, such as proof of identity, proof of admission, income documents, and more.
Documents Required to Apply for Education Loan
You will likely need to provide various documents as part of your loan application, such as proof of identity, proof of admission, income documents, and more for both Student as well as the Guarantor or co-borrower.
Student-Applicant:
Proof of Identity (Any one): Pan/Adhar/Passports etc
Proof of Residence/ Address (Any one): Passport mandatory in case of Studies Abroad
Academic Records: 10th Result & 12th Result, Graduation Result- Semester-wise (if applicable) Entrance Exam Result through which admission is being taken (e.g. CAT, CMAT, JEE, NEET, CET, GMAT, GRE, TOEFL, etc.)
Proof of admission: Offer Letter or Admission Letter from the Institution. Conditional admission letter may be considered in case of studies abroad.
Statement of cost of study/ Schedule of expenses
College / Course prospectus (if available)
2 passport-size photographs
A/C statement for last 1 year in case of any previous loan from other Banks/Lenders
Education Loan Documents for Co-Applicant/ Financial Co-Applicant/ Guarantor
II. Co-applicant/Guarantor:
Proof of Identity (Any one):
Proof of Residence/ Address (Any one):
2 passport-size photographs
A/C statement for last 1 year in case of any previous loan from other Banks/Lenders
III. Income Proof for Salaried Co-applicant/ Guarantor:
Salary Slip or Salary Certificate
Copy of Form 16 and IT Returns acknowledged by IT Dept.
Bank account statement for last 6 months (of Salary Account)
IV. Income Proof for Self-employed Co-applicant/ Guarantor:
Business address proof (If applicable)
IT Returns acknowledged by IT Dept., TDS Certificate (Form 16A, if applicable)
Bank account statement for last 6 months
Education Loan EMI Calculator
Using an Education Loan EMI (Equated Monthly Installment) calculator can help you estimate your monthly loan repayment amount.
Follow these steps to use a Education Loan EMI calculator effectively:
- Enter Loan amount, interest rate, tenure.
- Click Calculate.
- View EMI, total interest, repayment.
- Adjust tenure if needed.
- Consider extra costs.
- Check budget compatibility.
- Confirm with the lender before finalizing.
How is Education Loan EMI Calculated?
Education Loan EMI (Equated Monthly Installment) is calculated using the following Compound Interest formula:
EMI = [P * r * (1 + r)^n] / [(1 + r)^n - 1]
Where:
EMI = Equated Monthly Installment
P = Loan principal amount
r = Monthly interest rate (Annual interest rate divided by 12, expressed as a decimal)
n = Loan tenure in months
How to Calculate the Educational Loans EMI?
To use an Education Loan EMI Calculator:
Input Loan Details: Enter the loan amount you plan to borrow, the applicable interest rate, and the repayment tenure (in months or years).
Calculate: Click the "Calculate" or "Calculate EMI" button to obtain the estimated monthly EMI amount.
View Results: The calculator will display the monthly EMI, as well as a breakup of the principal and interest components for each payment.
Consider Variations: You can experiment with different loan amounts, interest rates, and repayment tenures to see how they affect your EMI.
Assess Affordability: The calculated EMI can help you determine whether the repayment amount fits within your budget.
Plan Your Finances: Use the EMI calculation to plan your monthly finances and ensure timely repayment of the loan.
Features of the Education Loan EMI Calculator
To use an Education Loan EMI Calculator:
Input Loan Details: Enter the loan amount you plan to borrow, the applicable interest rate, and the repayment tenure (in months or years).
Calculate: Click the "Calculate" or "Calculate EMI" button to obtain the estimated monthly EMI amount.
View Results: The calculator will display the monthly EMI, as well as a breakup of the principal and interest components for each payment.
Consider Variations: You can experiment with different loan amounts, interest rates, and repayment tenures to see how they affect your EMI.
Assess Affordability: The calculated EMI can help you determine whether the repayment amount fits within your budget.
Plan Your Finances: Use the EMI calculation to plan your monthly finances and ensure timely repayment of the loan.
Fees and Charges for Education Loan
The fees and charges of education loans usually vary from lender to lender and from case to case. The aforementioned table will give you a fair idea of the fees and charges related to education loans:
Particulars
Charges
Loan Processing Fees
0.5% to 4% of Loan Amount
Loan Cancellation
0
Stamp Duty Charges
As per actuals
Legal Fees
As per actuals
Penal Charges
Usually @ 2% per month; 24% p.a.
EMI / Cheque Bonus
Around Rs 590 per bounce
Education Loan Reviews
4/5
Ruloans personnel helped me in getting an education loan from axis bank for my son who wanted to complete his medical studies in UK. I was happy with the deal and rate of interest they helped me in getting from the bank.
KETKI SHARMA
4/5
Hdfc rejected my education loan application as I didn't had any collateral to provide and also my income was a little low than required. I got in touch with Mr. Rohan from RULOANS, he was successful in getting me the loan, the rate was a little higher than usual but I was okay with it as I was happy that atleast I got the loan.
DAKSHA KALE
Learn more about Education Loans
Let’s read about the 5 most important facts on Education Loan tax benefits:
Section 80E Income Tax Deduction
A person can claim the interest portion of a Loan under Section 80E of the Income Tax Act. Citizens can make use of Section 80E of the Income Tax Act, which is targeted solely at the educational sector. Only Education Loans are eligible for tax deductions under Section 80E. Maximum tax deduction amount
Under Section 80E of the Income Tax Act, you may claim the cost of Education Loans as part of the tuition fee you pay to any college, university, or other educational institution. On courses that you, your spouse, and your children enroll in, you can claim Educational Loan tax benefits. You can deduct such debts from your taxes in India whether you took out an Education Loan for a study in India or overseas. The only requirement is that the Loan must be obtained from the Banks and NBFCs that RBI has authorized.
Eligibility for tax deductions
Only individual taxpayers are eligible for Education Loan tax benefits. Under Section 80E of the Income Tax Act, Hindu undivided families (HUFs) are not eligible for tax deductions.
If the following conditions are met, you can claim tax advantages for an Education Loan:
- You have obtained a Loan for your child;
- You obtained the Loan for your own use;
- You obtained the Loan on behalf of your spouse;
- You are the borrower's legal guardian, according to the Loan application.
Tax deduction criteria
You must be aware that the tax advantages are only applicable to the interest portion of Education Loans, not the principal amount. There is no upper limit to your savings, and you can deduct all of the interest that is due in a given fiscal year.
Tax benefits from Banks and NBFCs
Section 80E tax deductions are only available if you borrowed money for your study from a legitimate Bank or Non-Banking Financial Companies (NBFCs). Therefore, if you borrow money to pay for your higher education from a friend or a relative, you will not be eligible for any tax benefits.
Moratorium Period:
The moratorium period is a distinctive aspect of education loans. This provision allows you to opt for a deferment of EMI payments for a maximum of 12 months after completing your studies or within 6 months of commencing employment, whichever comes earlier. However, the precise length of the moratorium period is subject to the policies of the respective bank.
Choosing the Right Time to Begin Education Loan Repayment:
While a moratorium period is available, it is advisable to initiate the repayment of your education loan at your earliest convenience. It's important to note that the moratorium period does not exempt you from interest charges. Particularly in India, education loan interest rates are notably high.
Interest continues to accumulate during the moratorium period, even though you aren't required to repay the principal amount. This results in a higher burden of interest and an increased overall loan cost. Moreover, starting repayment early can contribute positively to building a favorable credit score.
Process for Repaying Education Loans:
The process for repaying an education loan is relatively straightforward. Contact your bank's manager to establish an arrangement for automatic deductions from your account. Additionally, you may want to explore the variety of education loan repayment options that are available in India.
Additional Points to Consider:
The repayment duration can vary between different banks and is often contingent upon the amount of the loan you've availed. For students pursuing education abroad, the repayment period can extend up to 15 years, affording them ample time to gradually settle the loan through smaller installments.
In regard to prepayment of education loans, it's worth noting that banks generally do not impose charges. However, it's typically not recommended to prepay or fully settle the education loan ahead of schedule. This is primarily due to the fact that education loans offer potential tax deductions on the interest paid, as outlined in Section 80E of relevant tax regulations.
- Age: Most lenders have a minimum and maximum age requirement for loan applicants. Typically, you need to be of legal age (18 or older) to apply for a loan.
- Course/Program Eligibility: Education loans are often tied to specific educational programs or courses. Lenders may have a list of eligible institutions and programs that qualify for loans.
- Admission Offer: Many lenders require proof of admission to an eligible educational institution before approving a loan application.
- Academic Performance: Some lenders might consider your academic performance as part of the eligibility criteria. This could include factors like your high school or previous education grades.
- Co-borrower or Guarantor: If you have limited credit history or income, some lenders might require a co-borrower or guarantor (usually a parent or guardian) who will share the responsibility of repaying the loan if you are unable to do so.
- Credit History: Student's as well as their co-borrower/guarantor's credit history and credit score can play a significant role in determining your eligibility for an education loan. A good credit history can improve your chances of approval and may lead to more favorable loan terms.
- Income/Financial Ability: Some lenders may consider your ability to repay the loan based on your income or your co-borrower's income.
- Loan Amount: The loan amount you're requesting in relation to the cost of the program might affect your eligibility. Lenders may have specific limits on the loan amount they are willing to offer.
- Collateral or Security: In some cases, lenders might require collateral or security against the loan, especially for larger loan amounts. This could be in the form of property, investments, or other valuable assets.
- Documentation: You will likely need to provide various documents as part of your loan application, such as proof of identity, proof of admission, income documents, and more.
Education Loan is a credit facility offered by Banks/NBFCs and various other financial institutions to meet the business requirements of individuals, self-employed customers, business owners, MSMEs, and other business entities. Loan against property can be availed by startups, entrepreneurs, retailers, traders, manufacturers, self-employed professionals (CAs/Doctors), existing businesses, and several other business entities.
Education Loan is majorly classified into two types, such as Secured loan and Unsecured loan. Secured loans are types of loans that require collateral/security, that borrowers need to deposit with the lender to avail funds. However, in the case of unsecured loans, there is no need to submit any type of collateral/security with the Bank/NBFC, or any other financial institution.
Banks/NBFCs offer a range of both Secured and Unsecured Education Loans that include Term Loans (Short-term/Intermediate-term/Long-term), Working Capital Loans, Cash Credit, Overdraft, Letter of Credit, Bill/Invoice Discounting, Equipment Finance, Machinery Loans, Point-of-Sale (POS) Loans/Merchant Cash Advance, Fleet Finance, Loans under Bank Guarantee (BG), and Loans under Govt. schemes, such as Mudra Loans (PMMY), SIDBI, PMEGP, CGTMSE, Stand Up India, PSB Loans in 59 minutes, PMRY, etc. Financial institutions also offer Startup Loans, Small Home Loans, Instant Loan against property and Micro Loans of loan amount up to Rs. 10 lakh or more depending upon personal requirements.
FAQs on Education Loans
An education loan is a type of loan designed to help students and their families finance the cost of higher education. This loan covers expenses such as tuition fees, books, accommodation, and other related costs. The loan amount is typically disbursed directly to the educational institution. Students can repay the loan after completing their education, often with a grace period. Education loans can be offered by banks, financial institutions, and government schemes, and they may have different terms and conditions depending on the lender.
To be eligible for an education loan, applicants typically need to be within a certain age range, have a good academic record, be enrolled in a recognized educational institution for an eligible course, and have a co-applicant, often a parent or guardian. Financial stability and creditworthiness are also important factors, and the course and institution should be recognized by relevant authorities. Each lender may have specific eligibility criteria, so it's advisable to check with them for details.
A moratorium period for an education loan is a specified period during which the borrower is not required to make any repayment towards the principal amount but only the interest portion of the loan. This period usually starts from the disbursement of the loan and ends after the completion of the course or a few months after the student secures employment, whichever is earlier. The purpose of the moratorium period is to provide students with a grace period to focus on their education and secure a job before they start repaying the loan.
Repayment of an education loan typically starts after the moratorium period ends. The exact timing can vary depending on the lender and the terms of the loan agreement. In most cases, repayment begins either immediately after the moratorium period ends or after a specified grace period, such as six months to a year. It's important to check the terms of your loan agreement to understand when exactly you are required to start repaying the loan.
In education loans, repayment options typically include Equated Monthly Installments (EMIs) after a moratorium period, step-up or step-down EMIs based on expected income changes, interest-only payments during the moratorium period, and bullet repayment where the entire principal and interest are paid at the end. Borrowers can choose the option that best fits their financial situation and repayment capacity.
Yes, you can typically prepay your education loan either in part or in full. Prepayment allows you to pay off the loan before the end of the loan tenure. Some lenders may charge a prepayment penalty or fee for early repayment, so it's advisable to check with your lender regarding their prepayment policies.
To start repaying your education loan, review your loan agreement for the repayment schedule and EMI amount. Set up a bank account for payments and calculate your EMI based on the loan terms. You can then start making payments either manually or through automatic deductions as per the repayment schedule.
Yes, there is a tax benefit for education loan repayment in India under Section 80E of the Income Tax Act. According to this section, the interest paid on an education loan for higher education is eligible for deduction from the total taxable income. The deduction is available for a maximum of 8 years or until the interest is fully repaid, whichever is earlier. The benefit is available for loans taken for the taxpayer, spouse, children, or for a student for whom the taxpayer is a legal guardian.
If you miss education loan payments, you may incur late fees, damage your credit score, face default and legal action from the lender, and potentially involve your cosigner in repayment. Communicating with your lender about payment difficulties is crucial to explore options and avoid default.
Yes, you may be able to change your repayment plan for an education loan later, depending on the lender's policies and the terms of your loan agreement. Some common options for changing your repayment plan include switching from a standard repayment plan to an income-driven repayment plan, extending the loan term to lower your monthly payments, or choosing a different repayment schedule. It's advisable to contact your lender to discuss your options and determine if changing your repayment plan is possible and beneficial for your financial situation.
Yes, international students can get education loans to study abroad, but they may need a co-signer who is a resident or citizen of the country where the loan is being obtained. Requirements vary by lender and country, so it's best to research available options and eligibility criteria.
Yes, you may need a co-borrower or guarantor for an education loan, especially if you are a student or have a limited credit history. A co-borrower or guarantor provides additional assurance to the lender that the loan will be repaid in case you are unable to do so. The specific requirements for a co-borrower or guarantor can vary depending on the lender and your individual circumstances. It's advisable to check with the lender regarding their specific requirements for co-borrowers or guarantors when applying for an education loan.
To apply for an education loan, research lenders and compare options, check eligibility criteria, gather required documents, fill out the application form accurately, and submit it along with the documents to the lender. After verification and approval, the loan amount will be disbursed directly to the educational institution. Repayment usually starts after the moratorium period ends.
The maximum loan amount for an education loan varies depending on the lender, course, and your financial situation. Lenders typically offer loans covering up to 100% of tuition fees and related expenses, but the actual amount depends on factors like course fees and your ability to repay.
To apply for an education loan, you typically need to provide proof of identity (such as a passport or Aadhaar card), proof of address (such as a utility bill), proof of admission to the educational institution, course fee details, academic records, and income proof of the co-borrower or guarantor, if applicable. Additional documents may be required based on the lender's requirements. It's advisable to check with the lender for the specific documentation needed for your education loan application.
The most suitable time to apply for an education loan is after securing admission to the educational institution. Applying early allows for timely processing and disbursement of the loan amount.
Yes, Non-Resident Indians (NRIs) are eligible for education loans from banks in India, subject to certain conditions. NRIs may need to provide additional documents such as a valid passport, visa, and proof of NRI status. Additionally, they may be required to have a co-borrower or guarantor who is a resident of India. The specific eligibility criteria and terms can vary among lenders, so it's advisable to check with the bank for their requirements.