A student loan is a sum of money borrowed from the government or a private lender to finance graduation or post-graduation courses or other higher studies. Government loans tend to have lower interest rates and can be paid back until after a certain period of time or after the student starts earning a certain amount.
Likewise, can I get 20 lakhs education loan?
The Credit Guarantee Fund for Education Loans (CGFEL) Scheme provides a guarantee for education loan dispersed by banks under the Model Education Loan Scheme of Indian Banks’ Association (IBA). … Under the CGFEL scheme you can get a loan up to Rs 10 lakh for study in India and up to Rs 20 lakh for studying abroad.
Considering this, how do I pay my education loan?
The most common method to keep your education loan repayment organized and self-driven is EMI (easy-monthly-installment). EMIs are fixed amount of sum decided at the time of taking a loan which students can pay every month to repay the study loan step-by-step.
How does the student loan work?
Student loans can include a tuition fee loan and a maintenance loan to help with your living costs. Tuition fee loans, to cover the full cost of your course, are paid directly to the course provider, and you won’t have to pay it back until after your course, when you’re earning above a certain level.
They are most useful when it comes to courses at premier institutions that cost a lot. Parents can afford to send their children for higher education and students can also pay for their own education. These loans can be funded by jobs that they get after completing the course.
– No, education loan is not interest-free in India. However, student loan without interest is a possibility in India with scholarships and subsidies. You can negate the effect of interest on your education loan by availing 0% interest scholarships or subsidies with Government subsidy schemes.
In either case, an education loan is a good idea and a commonly sought after resort. Pursuing higher studies usually involves high fees and an education loan comes in handy at this point. Banks provide education loans for graduation/PG, diploma or professional courses, at attractive interest rates.
One of the easiest ways to pay off education loans early is to pay more. And you can do so by choosing a shorter repayment tenure or loan prepayment. However, the EMI can be higher when choosing a shorter tenure. So, don’t cut short the loan tenure to a point that can make monthly payments hard to execute.
Students should decide the institute and course based on their appetite and ability. Some students take an education loan for graduation and then avail of the top-up facility to complete their post-graduation. “Taking a top up on education loan is bad, because it will increase the liability further.
Cons of Student Loans
- Student loans can be expensive. …
- Student loans mean you start out life with debt. …
- Paying off student loans means putting off other life goals. …
- It’s almost impossible to get rid of student loans if you can’t pay. …
- Defaulting on your student loans can tank your credit score.
– If you do not pay your education loan in India, the lender will start sending notices to you and your guarantor, if there is one. If you fail to comply with the warnings, you will default on your loan, and your credit score will take a huge hit. You would not be able to secure any loan in the future for a long time.
Let your lender know if you may have problems repaying your student loan. Failing to pay your student loan within 90 days classifies the debt as delinquent, which means your credit rating will take a hit. After 270 days, the student loan is in default and may then be transferred to a collection agency to recover.
Banks offering Education Loans and Collaterals Required
|Bank||Loan Amount and Collateral Required|
|HSBC||Loan up to Rs.5 lakhs do not require collateral|
|State Bank of India (SBI)||Domestic Education – Up to Rs.15 lakhs Foreign Education – Up to Rs.20 lakhs For loans up to Rs.7.5 lakhs no collateral is required|