Education Loans in India
Updated on: Nov 6, 2012
These days education comes with a cost and higher education seems to be proving costlier day by day.
The question haunting most of the deserving students, whose parents / guardians are not rich enough, is with respect to any available financing options. To support such students so that they may not left behind from the main league of education, the government of India has formulated Educational Loan Scheme.
Two banking and financial Apex Bodies, the Reserve Bank of India (RBI) and Indian Bankers Association (IBA) have helped the government in preparing the plan and procedure for educational loans. The new scheme covers all types of courses including professional courses in schools and colleges in India and abroad.
Some of the key-features of educational loan scheme are mentioned below
- The scheme provides loans up to Rs. 10 lakh for studies in India and up to Rs. 20 lakh for studies abroad.
- For loans up to Rs. 4 lakh no security or margin is necessary and the interest rate is not to exceed the Prime Lending Rates (PLR). For loans above Rs. 4 lakh the interest rate will not exceed PLR plus 1 percent.
- The loans are to be paid back over a period of 5 to 7 years; there is provision of grace period of 1 year after completion of studies.
- Tax Benefit- The repayment of an educational loan is deductible under section 80E of the Income Tax Act. The annual limit for deduction is Rs. 40,000 (for both the principal and the interest). Only loans borrowed for higher education ( full time studies in any graduate or post-graduate, professional, and pure and applied science courses) may claim deduction. The deduction will be available for a maximum of eight years starting from the day you start paying back.
Comments (31)
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School loans are necessary in this day and age but you have to be very careful you know what you are getting yourself into by taking them out. Education is different today than it was a few decades ago. - Comment #28
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does not SBI give loan to students studying B.A. LLB in national law university? - Comment #26
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m from cn halli and i stays in bangalore i applied for loan in HDFC bank bangalore and had given all the relevent documents but today loan has been rejected staying the co applicant is not ma blood relative . now i enquired in all the banks in cn halli b - Comment #24
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Dear Sir, I took educational loan for about Rs. 2,40,000 from andhra bank for my higher education in the year 2001 in 4 installments of Rs. 60,000 each and the bank has taken security (our land document) for issuance of the loan. My actual repayment star - Comment #23
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i want loan for fashion designing......how can i proceed please let me know...... - Comment #19
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This is such an informative and enlightening article that cleared all my doubts about educational loans. I am glad I have seen this and I am going to refer it to all my friends who are in the dark applying for loans.The article deals with all aspects of l - Comment #11
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Sir, can i borrow a loan of rs400000 for admission in a private engineering collage which is approved by AITCE. I've not given AIEEE. SO i dont have any score card.plz reply me sir. - Comment #10
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I want to educational loan - Comment #9
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I m in computer eng. Diploma third year and want money to pay fees - Comment #8
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My income is about 11 lacs.Can i get education loan for my son for graduation other then my resi state.What is PLR? - Comment #7
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I hav a query as i have already taken loan of 6 lakhs for my engineering now I am going for PG again i have to borrow loan.....will banks be willing to pay me 10 lakh loan for second time for study in India only? - Comment #6
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If you are short of money then getting a loan is not that fancy an option. Borrowing any kind of Loan In India is not a problem, as there are a wide number of banking organizations which are offering all kinds of loan in India. - Comment #5
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I want to apply for a loan for a one year pg diploma course in journalism. I want to know about an educational loan in order. Help. - Comment #4
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I'm an engineering student but i have some money problems so i want to education loan for completing the engg. please help me. - Comment #3
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can a student get an independent loan for doing mbbs in india...??????? - Comment #1
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