Key Features and Advantages of Our Education Loan

Grace Period for Repayment:
Repayments generally begin after the course ends, giving students time to find employment before starting to pay back the loan.

Co-borrower Support:
A parent or guardian can join as a co-applicant, which may improve your eligibility and increase the chances of approval.

Tax Benefits Under Section 80E:
The interest paid on your education loan could qualify for tax deductions under Section 80E of the Indian Income Tax Act.

Wide Range of Courses & Institutions Covered:
Loans are available for various academic levels—from school to postgraduate studies—and are valid for both domestic and international institutions.

Secured and Unsecured Loan Options:
Depending on the loan amount, some loans may not need any collateral, while larger sums might require security like property or investments.

Pre Admission Sanction

Maximum Loan Repayment Tenure

Tax Benefit U/s 80 (E)

Pre Admission Sanction

Maximum Loan Repayment Tenure

Tax Benefit U/s 80 (E)

Education Loan Eligibility & Required Documentation

Here’s what you need to know before applying for an education loan:

Eligibility Criteria

Loan eligibility is influenced by multiple factors such as the type of course, institution, country of study, and the lender’s terms. Common eligibility requirements include:

  • Age Requirement: Applicants usually need to be 18 or older.
  • Eligible Courses: The course you choose must be recognized by the lender; approved institutions and programs may vary.
  • Proof of Admission: A confirmed admission letter from the educational institution is generally mandatory.
  • Academic Background: Your past academic records may be reviewed, especially grades from your previous studies.
  • Co-applicant or Guarantor: If you lack a strong credit history or stable income, a co-borrower (typically a parent or guardian) might be required.
  • Credit Score: A good credit score—both yours and your co-applicant’s—can boost your loan approval chances and lead to better interest rates.
  • Income Stability: Lenders often assess the financial capacity of the co-applicant to ensure repayment ability.
  • Requested Loan Amount: The amount you apply for must align with the tuition and other costs; lenders might impose maximum loan limits.
  • Collateral/Security: High loan amounts may need to be backed by security, such as fixed deposits, real estate, or other valuable assets.

Necessary Documentation: Submission of key documents like ID proof, admission letters, and income statements is required.

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    Required Documents

    When applying for an education loan, both the student and the co-applicant must submit documentation. Below is a basic checklist:

    For Student Applicant

    • Identity Proof (Aadhaar, PAN, Passport, etc.)
    • Admission Letter from the institution
    • Academic Records

    For Co-applicant/Guarantor

    • Identity and Address Proof
    • Relationship Proof with the applicant

    For Salaried Co-applicant/Guarantor

    • Salary slips
    • Income tax returns
    • Bank statements

    For Self-Employed Co-applicant/Guarantor

    • Business proof
    • IT returns
    • Financial statements

    For a detailed list, visit our Documents Required page.

    Estimate Your Loan Repayments with an EMI Calculator

    An Education Loan EMI Calculator helps you forecast your monthly repayment. Here’s how to use it:

    Steps to Use the EMI Calculator

    1. Input the loan amount, interest rate, and tenure.
    2. Click on “Calculate”.
    3. The calculator displays the EMI, total interest payable, and the overall repayment amount.
    4. Adjust the tenure or loan amount as needed to find an EMI that suits your budget.

    Formula for Calculating EMI

    The EMI is calculated using the following formula:

    EMI=P×r×(1+r)n(1+r)n−1EMI = \frac{P \times r \times (1 + r)^n}{(1 + r)^n – 1}

    Where:

    • P = Loan principal
    • r = Monthly interest rate (annual rate ÷ 12)
    • n = Loan duration in months

    Planning Your Repayment

    To calculate your EMI effectively:

    • Enter your loan details in the calculator.
    • Click “Calculate EMI”.
    • Check the EMI amount and how much goes toward principal and interest.
    • Test with different scenarios to find a comfortable repayment plan.
    • Use the results to align your monthly budget and ensure timely repayments.

    FAQs

    Are There Any Tax Benefits for Taking an Education Loan?

    Yes, under Section 80E of the Income Tax Act, you can claim a tax deduction on the interest paid on an education loan. This benefit is available for loans taken for higher education for yourself, your spouse, children, or a legal ward. There’s no cap on the maximum amount of interest you can claim, and the deduction is available for up to 8 years or until the interest is paid in full—whichever is earlier. Note that only interest, not the principal amount, is eligible for this benefit.

    What Steps Are Involved in Repaying an Education Loan?

    The education loan repayment process typically involves the following steps:

    1. Moratorium Period: During the course period + 6-12 months grace (varies by bank), you don't need to pay EMIs, though interest may accrue.
    2. Repayment Begins: After the moratorium, you start paying EMIs which include both principal and interest.
    3. Tenure Options: Repayment tenures range from 5 to 15 years.
    4. Prepayment: You can make prepayments without penalty in most cases, reducing the interest burden.
    5. Monitoring: Track EMI payments through bank portals to avoid defaults and maintain your credit score.

    What Factors Do Banks or NBFCs Consider Before Approving an Education Loan?

    Lenders assess several criteria before approving an education loan:

    • Academic Performance: A good academic record increases your chances.
    • Admission Confirmation: Proof of admission into a recognized course and institution is essential.
    • Course and Institute Reputation: Premier institutes (IITs, IIMs, foreign universities) get quicker approvals.
    • Collateral (if applicable): For higher loan amounts, security or collateral may be required.
    • Co-applicant’s Financial Standing: The income and creditworthiness of your co-borrower (usually parents/guardians) play a big role.
    • Loan Amount & Repayment Capacity: The lender assesses whether you (or your co-borrower) can repay the loan comfortably.

    What Is the Process to Apply for an Education Loan Online?

    Here’s how you can apply for an education loan online in a few simple steps:

    1. Choose the Lender: Compare loan features and interest rates on bank websites or aggregator platforms.
    2. Fill Out the Online Form: Provide basic details such as course name, institute, loan amount, and co-applicant information.
    3. Upload Documents: Submit identity proof, address proof, admission letter, academic records, and income documents of the co-borrower.
    4. Loan Assessment: The bank verifies your application and may request additional information.

    Approval & Disbursal: If approved, the loan agreement is signed digitally or in person, and the amount is disbursed to the institution directly.