Educational Loan Scheme and Apply Now!
There are many things in our life that demand financial expenses. Things like marriage, education, and buying a home are planned but things like medical conditions are not planned. We take loans for these big decisions of our life. Because saving alone is not sufficient to afford them.
Today, we’ll discuss Education Loan Scheme in broadway.
Students and their bright future are the highest priority of the Indian government. That’s why several Indian banks give loans to students so that they can chase their academic goals.
Education Loan Schemes are given for higher education in India/abroad. With the increasing competition, students are looking for better prospects and want to study abroad or in India.
A Brief Intro To Educational Loan Scheme!
The expenses of education are increasing with time. Thus, it is problematic for a student to bear the fee of the institution alone.
Indian Banker Association (IBA) has formulated the ‘Model Education Loan Scheme’. It provides financial support to all students who wish to seek higher education in India or abroad.
The Reserve Bank of India (RBI) has encouraged all Scheduled Commercial banks to accept the Educational Loan Scheme of IBA.
What Are The Expenses That Are Covered Under the Educational Loan Scheme?
- Hostel Fees
- Tuition Fees
- Expense of Travel
- Cost of books/equipment/ instruments/uniform
- Library fees/examination/laboratory
- The expense of a computer/laptop
- Other expenses such as study tours/project work/thesis that is important to complete the course
List Of Documents Required For Educational Loan Scheme
To take advantage of the Education Loan Scheme, you need to apply for it. For this, you will need these documents:
- Identity Proof
- Address Proof
- Proof of Age
- Letter from an educational institute
- Marksheets from previous institute-college/school
- Salary Slips of Parents
- Statement of your bank account (current)
- ITR with income computation of co-applicant in some cases
- An audited balance sheet of co-applicant in some cases
- Latest passport-size photographs
- Appropriate Visa for studying abroad
- Proof of Turnover (sales receipt/service tax return)
- Complete the application form with your signature
Some Of The Advantages Of The Educational Loan Scheme
Lower Interest Rates
The interest rate is high on a personal loan. So, if you take a personal loan to finance your study in India or abroad, it will cost you much.
Education Loan Scheme have lesser interest rates. For female students, banks provide an additional concession of 0.5%.
Finance Necessary Expenses
The loan for a student who is studying abroad covers several expenses. It includes tuition fees, travelling tickets, university fees, rent, cost of food, living expenses, a laptop, etc.
Education Loan Scheme covers all the requirement that students need to pay to complete their education.
Education Loan Scheme is different from a personal loan. It comes with a moratorium period*.
*It is the time given to the student in which they don’t have to pay a monthly instalment of loans. The moratorium cycle grants 6 months of relaxation after the completion of the course. This span can be extended to 12 months.
Less Dependency On Parents For Fees
Education Loan Scheme reduce your dependency on your parents for fees. You can easily pay your loan after the completion of your course.
No Need To Sell Valuable Assets
CIBIL is the overall history of your credit. It is believed that a good CIBIL score is above 750. The general CIBIL score ranges between 300-900.
The well-timed repayment of the EMIs in the Education Loan Scheme will build the required score. Thus, you can easily take loans in the future.
Education Loan Subsidy
The Government launched a variety of subsidy schemes for Education Loan Scheme. These schemes offer loans to those who require loans. These subsidies are as follows:
- Dr Ambedkar Central Sector Scheme of Interest Subsidy
- The Padho Pardesh Education Loan Interest Subsidy Scheme
- Central Sector Interest Subsidy Scheme
According to section 80 E of the Income-tax of 1961
- The applicant and co-applicant of the loan can declare some percentage of the interest as non-deductible.
Eligibility of Educational Loan Scheme
Student Eligibility for Education Loan Scheme
- The students should be an Indian residents.
- The NRI students are eligible.
- The OCI (Overseas Citizens of India) holds the eligibility.
- The PIO (Person of Indian Origin) are eligible
- The student must have cleared their entrance exam from a recognised university in India or abroad after clearing the 10+2 exam
- Those candidates with Indian origin, but grew up outside India and have a keen desire to study in India.
Course Eligibility To Study In India
- Undergraduate Programs or Postgraduate Programs from recognised colleges or universities approved by UGC/AICTE/IMC/.
- The regular technical and professional Degree/Diploma offered by colleges/universities & approved by UGC/AICTE/IMC. Autonomous bodies like IIT and IIM organise regular Degree/Diploma Courses.
- Medical/medicines-related courses or PhDs.
- Teacher training or other training courses approved by the Central Government/State Government.
- Approved Regular Degree/Diploma courses like shipping, pilot training, etc.
Course Eligibility To Study Abroad
- Career-focused Under Graduate courses.
- Post Graduation courses in MCA, MBA, M.Sc, etc.
- Degree/Diploma courses like pilot training, aeronautical, computer engineering, etc. recognised by competent regulatory bodies abroad.
- Courses by CIMA-London, CPA in the USA, etc.
Process Of Application For Educational Loan Scheme?
Applicants can apply for the Educational Loan Scheme both ways-online and offline. Let’s discuss each one individually.
A. Online Process
- Fill the application form online.
- Attach all documents that are needed.
- Submit the form.
- The lender will call you to discuss T&C.
B. Offline Process
- Visit a bank branch. Remember to keep essential documents with you.
- Call the lender and discuss the Terms & Conditions of the loan.
How Can I Repay The Educational Loan Scheme?
The time of repayment starts generally after 12 months of completion of your course or 6 months after employment. Students can pay their loans in EMIs.
The several modes of repayment are as follows:
- Internet Banking
You can pay online through a mobile app or the website of lenders.
Drop a check to pay your repayment.
- Demand Draft
Students can pay through demand draft (DD).
The Central Sector Interest Subsidy Scheme Of MHRD
This Education Loan Scheme was launched by MHRD (Ministry of Human Resource Development) in 2009.
Those students are benefited from this Education Loan Scheme whose family’s annual income is up to ₹4.5 lakhs.
Education Loan Scheme Of The NBCFDC
NBCFDC stands for National Backward Classes Finance and Development Corporation. It provides educational loans to students:
- Those who belong to Backward Classes.
- Students whose family’s annual income is below 3 lakhs.
Educational loan of the NBCFDC provides only ₹10 lakh in India and ₹20 lakh for studying abroad.
Padho Pardesh is implemented by the Ministry of Minority Affairs. This is a Central Sector Scheme. It is for those students who belong to minority communities* and want to do Overseas studies.
*Those who are declared as people of minority communities under Section 2 (c) of the National Commission of Minorities Act, 1992.
This loan is for those candidates who wish to study abroad at Masters and M.Phil/Ph.D. levels.
Tax Benefits On Educational Loan Scheme
As per the Income Tax Act of 1961, the interest that students pay on their educational loans is deducted. The tax rebate is offered to both those who study in India/ abroad.
Let me tell you that tax deduction will only be applicable for the interest amount, not the principle amount. To claim your tax deduction, present a certificate with the help of a bank. This certificate categorises the interest and principal of your EMIs.
If you want to study abroad or in India but can’t due to financial issues, you can borrow a student loan. The Educational Loan Scheme pushes you to achieve your dream career.
Educational Loan Scheme helps you to pull off your goal. In addition, it eases your parent’s burden.
Students can also connect with GST Suvidha Kendra® for part-time jobs and become loan providers. With the help of the Digital Loan Portal of GST Suvidha Kendra®, you can help applicants apply for loans and earn good commissions.
- Personal Loan
- Housing Loan
- Business Loan
- Loan Against Property
- MSME Loan
- Vehicle Loan
You can earn recurring and stabilized income.