Education loans in India: Types and easy ways to get them

Education is often the cornerstone of success. However, higher education in India and abroad, especially in reputed institutions, can be expensive. This is where education loans in India come to the rescue.

While an education loan helps provide the necessary financial support, the education loan process can be tedious. To make it easier, let's understand the types of education loans, education loan eligibility criteria, documentation, and other relevant details to make the journey hassle-free for you. 

What is an education loan?
 

Education loans in India are usually structured as long-term loans with longer repayment periods, depending on the lender and the loan terms. These loans are important financial aid for those who want to pursue higher education but cannot pay for it upfront. 

The borrower is expected to repay the loan amount and interest over a specific period. Leading banks like IDFC FIRST Bank offer easy Education Loans to students that cover a host of expenses and help them shape their future. Read on.

Types of education loans in India
 

There are different types of education loans to meet diverse educational needs. Some of the popular types of education loans in India are -

Based on location
 

·     Domestic education loans - Domestic education loans are provided to students pursuing their studies in India. These loans generally cover tuition fees, exam fees, and other related expenses.
 

·     Education loans for studying abroad - These loans cover the cost of tuition fees, travel expenses, accommodation, and other related expenses depending on the lender’s policy. To be eligible for an education loan to study abroad, the student must be admitted to a recognised foreign university or institution. The loan amount usually depends on the cost of the program and the country in which the student is planning to study.
 

Also read - Are you making these 5 mistakes with Education Loans?

Based on course
 

·     Undergraduate education loans - Undergraduate education loans help students finance their undergraduate program. These loans cover tuition fees, living expenses, and other related expenses and are usually repaid after completion of the course.
 

·     Postgraduate education loans - Postgraduate education loans are financial aids that students can use to cover the cost of their postgraduate studies. These loans can be obtained from private lenders or government institutions, and they typically come with various repayment options and interest rates.
 

·     Loan for vocational education and training - A loan for vocational education and training is a financial assistance option that helps individuals fund their vocational education programs. These loans can be used to cover the costs of tuition fees, textbooks, and other expenses related to vocational education and training.
 

Based on collateral
 

·     Secured education loans - Secured education loans are provided against collateral such as property or fixed deposits. These loans offer a lower interest rate and a longer repayment tenure.
 

·     Unsecured education loans - Unsecured education loans do not require collateral. These loans are offered based on the student's or their co-signer's creditworthiness. Unsecured education loans offer a slightly higher interest rate.
 

How to get education loans in India quickly?
 

Here are eight tips that can help you get education loans in India hassle-free -

·     Understand the eligibility criteria - Banks have different education loan eligibility criteria, and checking if you meet them before applying for a loan is essential. The eligibility criteria include age, academic qualifications, the course and institution chosen, and the loan amount.
 

·     Have a co-borrower - Having a co-borrower, such as a parent or a guardian, can significantly increase the chances of loan approval and quick processing. Maintaining a good credit score is also crucial, especially for working professionals who may need to apply for a loan. A good credit score indicates financial responsibility and the ability to repay loans on time, making it more likely for lenders to approve the loan application quickly.
 

·     Research and compare loan options - Before applying for an education loan, research and compare the available loan options. Look for interest rates, processing fees, repayment periods, and other terms and conditions. This will help you choose the right loan that meets your requirements.
 

·     Application process - To apply for education loans in India, students can visit the lender's website or branch and fill out the application form. They must provide the documents required for an education loan, including proof of admission, and KYC documents. Some lenders offer online application facilities, which can be convenient and time-saving.
 

·     Documents required - The documents required include proof of identity, residence, income, admission letter from the institution, academic records, and others. Ensure all the documents are correct and up-to-date to avoid delays in the approval of the education loan.
 

·     Follow up with the bank - After submitting the loan application, it is important to follow up with the bank to ensure that the education loan process is smooth and hassle-free. Keep track of the loan status and provide any additional documents required for an education loan.
 

·     Use loan calculators - Loan calculators can help you calculate the loan amount, interest rates, and repayment period. For example, you can use IDFC FIRST Bank's Education Loan calculator to estimate your monthly payments. 
 

·     Education loan to study abroad - If you plan to study overseas, you must provide additional documents required for an education loan, such as admission letters and visa documents.
 

Education loan eligibility
 

Before applying for education loans in India, you must meet specific education loan eligibility criteria. General eligibility requirements include the following -

·     The applicant must be an Indian citizen

·     The applicant must have secured admission to a recognised institution in India or abroad for a course eligible for the loan

·     The applicant should have a good academic record and complete their previous education from a recognised institution

·     The applicant must have a co-borrower, who could be a parent, guardian, or spouse, with a stable source of income to serve as a guarantor for the loan

Also read - Education loan eligibility for students: Challenges and solutions

Conclusion

Education loans in India help finance higher education expenses and assist students in achieving their dreams.

IDFC FIRST Bank, one of the leading banks in India, offers education loans in India to support students in achieving their academic goals. The offers provided by IDFC FIRST Bank -

·     Loan terms are flexible for up to 15 years , with competitive interest rates starting at 9% annually

·     Unsecured loans up to Rs 75 lakhs are available for working professionals pursuing higher education

·     The bank offers 100% financing and flexible repayment options for over 25,000 courses in 3200+ countries

Swift fund disbursals ensure you can grab the opportunity of a lifetime and achieve your academic aspirations without delay. Apply now and take the first step towards a brighter future. Apply for an education loan today!

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.