Study Loan

Some Frequently Asked Questions About Education Loan In India

▪ People often have few doubts before or after taking education loan in India.  Here are answers to some common questions that people have with regard to student loan:

Who is eligible for Education Loan?

The person taking the loan should have secured admission in the institute. The institute or course of study must be recognized by UGC/AICTE/AIBMS/ICMR, etc. The person needs to be an Indian citizen and should be 17 years old or above.

What are the courses covered for Education Loan?

▪ Education Loan in India is available for all approved courses leading to Graduate/Post Graduate Degree and PG Diploma conducted by recognized colleges/universities recognized by UGC/AICTE/AIBMS/ICMR, etc. Education Loan is also available for part time courses and job oriented courses subject to employability and earning potential. An education loan for study abroad is also available for job oriented professional/technical courses offered by reputed universities.

What are the expenses covered under Education Loan?

▪ The amount of Education Loan is provided to meet all type of expenses which are necessary for completion of course that  includes purchase of books, equipments, computer, travelling, study tours, boarding, lodging besides all types of fees.

What are Documents required while applying for Education Loan?

▪ Some banks or financial institutions require all or any of the following documents as pre sanction documents:

▪ Loan applicationPassport size photographs.Proof of Address.Proof of Age.Copy of PAN of student Borrower.Proof of having cleared last qualifying examination.Letter of admission.Prospectus of the course wherein charges like Admission Fee, Examination Fee, Hostel Charges etc. are mentioned.

▪ Details of Assets & Liabilities of parents/guardians/guarantorsIn case loan is to be collaterally secured by mortgage of IP, copy of Title Deed, Valuation Certificate and Non-encumbrance Certificate from approved Lawyer.

▪ Photocopy of Passport & Visa in case of study abroad.Any other document/information, depending upon the case and purpose of the loan

What is moratorium period or grace period?

▪ It is the maximum time given to the student after finishing studies that go without catering any payments for yr loan. Mostly, it range from 6 to 12 months.

▪ What is the repayment tenure of an education loan?

▪ The repayment tenure depends on the amount of loan taken and type of course. The minimum time given to repay the loan is 1 years and maximum is 10 years.

Is guarantor mandatory in education loan?

▪ Yes, guarantor is mandatory in education loan. The guarantor could be an applicant's parents or guardians who take the responsibility for the repayment of loan in case of any mishap.

Is there any tax benefit by taking an Education Loan?

The moment a person start repaying the study loan, he/she can deduct the interest amount from the total income while calculating tax. This means the effective interest rate on the loan works out to a lower amount.

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Source : http://avanseeducationloan.blogspot.in/2014/03/some-frequently-asked-questions-about.html

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