With time the cost of education has gone up. Every student is not lucky to come from a financially well off family. There are many students who do well in academics but belong to poor family or a family where it is difficult to get one day meal. Hence these students have to take up job prematurely and this leads to end of promising talents.
Government and NGOs have introduced scholarship schemes to help such students but these are less in number and only few of the lucky one get it. Now the scenario has completely changed with the introduction of educational loan. Many nationalized banks have various education loan schemes for students.
Education loan is given for pursuing higher education in India or abroad where admission has been secured. Loan covers fees payable to college/school/hostel, examination/Library/ laboratory fees, for purchasing of books/equipment/instruments, caution deposit/building fund/refundable deposit (maximum 10% of tuition fees for the entire course), travel expenses/passage money for studies abroad, purchase of computers considered necessary for completion of course and any other expenses required to complete the course like study tours, project work etc.
Students who have secured admission in courses having employment prospects such as graduation courses/post graduation courses/professional courses and reputed institutes, whose degree/diploma is recognized by UGC/government/AICTE, etc., are eligible for loan.
The amount of loan may vary from bank to bank for instance country’s largest lender bank State Bank of India gives maximum loan of Rs. 10 lacs for studies in India and for studies abroad, maximum Rs. 20 lacs. Loan amount has a security attached to it, i.e. according to bank norms an individual has to produce collateral for any loan above Rs 4 lakh. Taking in consideration this government has come forward as a counter-guarantor so that the financial burden does not fall entirely on the family.
The repayment of loan amount commences one year after course completion or six months after getting job, whichever is earlier. The student can repay loan in equated monthly installments (EMI)
Banks have certain documentation requirements to get the loan they are:
- Completed Education Loan Application Form.
- Mark sheets of last qualifying examination for school and graduate studies in India
- Proof of admission scholarship, studentship etc
- Schedule of expenses for the specified course
- Copies of letter confirming scholarship, etc.
- Copies of foreign exchange permit, if applicable.
- 2 passport size photographs
- Borrower’s Bank account statement for the last six months
- Income tax assessment order, of last 2 years
- Brief statement of assets and liabilities, of the Co-borrower
- Proof of Income (i.e. Salary slips/ Form 16 etc)