Kalvimalar

Education loan has become handy to students as well as  parents to ensure to fullfil  the education dream of a  family or an individual. But, many are not aware of  the intricate process of education loans. Here it is  for you ....!   

31. Does students need security or collateral to obtain education loan?

The term Collateral varies from one company to another, however, the following are general rules:

No security or collateral is required for availing education loan upto INR 4 lakh 

Loans up to INR 4 lakhs to INR 7.5 lakhs require no Collateral but 3rd Party guarantee is a must.

Collateral is a must for loans above INR 7.5 lakhs. Major collaterals accepted by banks are LIC/NSC/KVP, Fixed Deposits, and Property documents of the guarantor. 

32. Are there income tax benefits for education loan borrowers? 

Yes. Education loan borrowers have income tax benefits under Section 80E of the Income Tax Act. Income Tax benefits can be used by the student as soon as they start paying the loan interest. 

33. From when the student can repay the bank loan? 

The interest rate will be taken into account right from the following month of obtaining loans. Hence, students may start repaying the interest immediately. For those students starting to repay interest immediately rebate of 1/2 % is applicable. 

34. What happens to the student loan if the student drops out of studies halfway through for any personal reasons?

Students should immediately inform the bank. They must repay the principal amount and the interest claimed until drop out. 

35. If a student doesn't get a job after completing his higher studies. Should he repay the loan? 

The student will be given a grace period of one year to repay the loan. However, they must start repaying the loan amount even if they don't get a job. 

36. What are the consequences if a student fails to repay the loan amount even after obtaining a job?  The interest rate on the education loan will increase after the student completes his higher education. It will further increase if there is a delay in repayment.   So, it will be good for the student to start repayment after the education is over. 

37. Are there any special relaxations for students belonging to SC/ST and Minority categories to avail of education loan?

Yes. There are some relaxations for students belonging to Adi Diavidar/Tribal and Minority categories to avail of education loan in India. For example, the personal contribution margin is reduced or made to zero. For further details, please contact the Bank or check on the VidyaLakshmi website. 

38. Is there any benefit in education loans offered to female students? 

Yes. The interest rate is 1/2% less for female students.

39. Are there any special facilities for differently abled students availing education loan?

There are no separate loan facilities for differently abled students availing education loans.

40. If the student's father cannot sign, can the mother sign?  Are there any exceptions?

The student's mother may sign if the father is unable to due to sickness or in a situation of living overseas. 

41. If the relatives of the applicant are residing abroad, can they be considered as co-applicant for the education loan? Yes. If they have an NRI account in India can be considered a co-applicant. Some banks require more co-applicant. 

42. Can education loans be availed for minors and orphans?

Yes. The guardian of minors and home-schooled men may be considered a co-applicant. Education loans may be provided based on their documents. 

43. Can students in refugee camps qualify for education loans? 

No. As students in refugee camps are not citizens of India, they cannot avail of education loans.

44. Can a student avail education loan without parents?

Yes. They do so with a co-applicant having a suitable source of income.

45. Are there any special benefits if the woman receiving an education loan is a single girl child?

Yes. A rebate of 0.5% interest is available.