How to get a Study Loan in India?

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How to get a Study Loan in India?

How to get a Study Loan in India?

Leading banks offer study loans in India to help students achieve their academic dreams. Its loan tenure is up to 15 years and with an interest rate of minimum 6.85%

Quality education is a crucial step for creating a successful life for a student. However, with the increasing fees of colleges every year, it becomes challenging for students to have a quality education. And many times, students who secure admission based on their merits in recognised and top colleges can’t continue their studies due to a shortage of funds. The cost of education in India ranges between Rs. 5 lakhs to Rs. 12 lakhs for undergraduate engineering courses. Whereas for medical studies, the fees may rise to Rs. 50 lakhs in private colleges.

You can get a study loan for studies starting from the nursery. And for higher studies, you can get a loan for full-time and part-time courses and loans for working professionals.

How to get a Study Loan in India

Study loan V/S Personal Loan

Many parents/guardians may feel that taking up a personal loan for higher studies is beneficial. But being a matter of fact, this is not true. Personal loans are given to you at a higher rate of interest as compared to a Study loan. In addition, a Study loan comes with numerous other benefits rather than just a low rate of interest compared to a personal loan.

Who can get a Study loan

Any person who has secured admission to a recognised college/ institution /university may apply for a Study loan. The repayment of this loan starts one year after completion of education or within six months of getting a job after your course.

How to get a Study Loan in India

Documents required while applying for a Study loan

The documents required while applying for a study loan are as follows:-

  • Your admission letter is given by the college in which you have secured admission.
  • The fee structure of the course.
  • All the required KYC documents, like identity, address proof.
  • Income documents like salary slips, bank statements, and IT return.

Margin percentage of a Study loan

A Study loan of up to Rs. 4 lakh does not require any margin. However, for a Study loan of more than 4 lakh, a margin of 5% and 15% respectively for India and abroad.

How to get a Study Loan in India

Guarantee or collateral for a Study loan

Your bank may sometimes ask for a third party guarantee or even collateral based on the loan’s value at the time of taking it. The collateral can be in any form of an insurance policy that is in favour of the bank. And the premium of the policy can be included in the Study loan amount.

Benefits of taking a study loan

There are many benefits of taking a study loan, and some of them are listed as under:

  • Applicable for all:- Any student who wants to study can apply for a Study loan. Even the economically backward classes can apply for a Study loan under the various government subsidy schemes such as the CSIS (Central Scheme to provide Interest Subsidy).
  • Easy Applicability for all courses:- Study loans can be applied to pursue all types of post-graduation, vocational, diploma courses. Whether in India or foreign universities.
  • Varied loan amounts:- The size of the loan depends on the type of course applied; banks can offer loans of the range between Rs. 2 lakhs to Rs. 22 lakhs.
  • Helps in completion of education:- The expenses are increasing day by day due to inflation, making it difficult for parents to complete their children’s higher education. Therefore to avoid such hindrances, it is advisable to apply for a Study loan.
  • Easy repayment:- Since the repayment of study loans is only after completion of education, or after 6 months of getting a job, the repayment of these loans becomes easier for the students and their parents.

Eligibility criteria for a Study Loan

The eligibility criteria for Study Loan are as follows

  • The applicant must be a citizen of India.
  • Should have secured admission to a recognised college.

These are some of the basic requirements to apply for an education loan, whereas there are other criteria that can influence the decision of bank such as:-

  • Academic merit of the student.
  • The reputation of the college in which the student has secured admission.
  • Collateral offered.
  • Age of the student:- some banks may have restrictions on the age also, i.e. a max. of 35 years of age.How to get Study Loan in India

Top loan offers by bank in 2021

Bank Name Interest Rate (p.a.) Loan Amount Processing Fees
PNB ( Punjab National Bank ) 6.90-9.55% Up to 15 lakhs 1% loan amount
SBI ( State Bank of India ) 6.85- 8.65% Upto Rs. 1.5 crore Rs 10000+ tax
Axis Bank 13.70-15.20% Up to Rs. 7.5 lakhs Nil to Rs 15000 + tax
BOB( Bank of Baroda ) 6.75-9.85% Up to 4 lakh and above 1% of the loan amount up to Rs 10000
HDFC 9.45-13.34% Max Apr Up to 1.5 % of loan amount + tax
Tata Capital 10.99% onwards Up to 30 lakhs Up to 2.75 % of loan amount + tax
Union Bank of India 8.80-10.05% Need-based finance Nil for Indian students 0.50% of loan amount + GSY for NRI students
Bank of India 6.85-9.35% For courses in India up to Rs 10 lakh

For courses Abroad: up to Rs 20 lakh

Nil for courses in India Rs.5000+ other fees for study abroad
Kotak Mahindra Bank Up to 16 % For courses in India up to Rs 10 lakh

For courses Abroad: up to Rs 20 lakh

Contact the bank
ICICI Bank 10.50% onwards For courses in India up to Rs 50 lakh For courses Abroad: Upto Rs 1 crore Contact the bank
Federal bank 10.05% onwards For courses in India up to Rs 10 lakh

For courses Abroad: up to Rs 20 lakh

Contact the bank

FAQ’s on Study loan

Is a Study loan available for MBA?

Banks may finance up to 100% of the loan depending on the amount of MBA admission Study loan and the category of the institute.

Can I get a Study loan of Rs 50000?

Yes, you can get a minimum loan amount of Rs. 50,000 along with various other benefits offered by the bank.

Should I take a study loan?

Considering the rising fees in top b-schools, it is clear that one should surely opt for a Study loan to ease your finances.