The Ministry of HRD, GOI has launched a scheme of Interest Subsidy on educational loans for economically weaker sections of the society. The students who satisfy all the following parameters would only be eligible for the interest subsidy: The scheme is applicable for inland studies only.
One may also ask, can you go to jail for not paying student loans?
Can You Go to Jail for Not Paying Student Loan Debt? You can’t be arrested or sentenced to time behind bars for not paying student loan debt because student loans are considered “civil” debts. This type of debt includes credit card debt and medical bills, and can’t result in an arrest or jail sentence.
Furthermore, how do I claim my education loan subsidy?
Education loan Interest Subsidy
Interest paid on education loan for study can be claimed as deduction under Section 80E of the Income Tax Act, 1961. Interest paid on education loan for study can be claimed as deduction under Section 80E of the Income Tax Act, 1961.
How do I get an interest free education loan?
However, can education loans in India be actually interest-free? The answer is no. Or at least, technically, you cannot avail of an interest-free education loan unless you have availed some economic benefits or academic subsidies from either the government or your institution.
Education Loan Repayment – How to repay your education loan
- Repay Education Loan by Cheque/DD (Demand Draft repayment)
- Education loan repayment by cash.
- Automated EMI payments (ECS/NACH) of student loans.
Government subsidy amount
The interest subsidy amount will not be the differential of interest amount (of actual and subsided rate) but will be the net present value (NPV) of the interest subsidy amount. It is to be calculated at a discount rate of 9 per cent.
It is important to note that this moratorium period is not interest-free. Simple interest is charged by banks for the entire duration. Borrowers of an abroad education loan are expected to repay this interest in addition to the educational loan amount in the form of easy monthly installments.
Education Loan Subsidy schemes are modes of financial assistance which help students to repay their education loan with ease. Student loan applicants can avail these subsidies in the form of interest rate subsidies, loan forgiveness or rebate on education loan repayment.
Details of the Scheme: The scheme envisages grant of loans to younger population of Goa to assist them in their pursuit of higher and technical education. It provides for exemption from the payment of interest charges, as long as the loanees adhere to repayment schedule strictly.
What is Interest Subsidy Scheme? Students from the economically backward sections can claim interest on their educational loans from the government as subsidy. The scheduled banks in the country provide the loans to students without the need of any collateral security against the loan.
UCO Bank Education Loan Scheme
Interest rate: 9.30% p.a. to 9.70% p.a. Collateral: For loans up to Rs. 7.5 lakh: No collateral.
The revised Repo linked UCO Float rate is 6.90% w.e.f. 27.05. 2020.
Compare Top Education Loan Offers 2021
|Name of Bank
|Interest Rate (p.a.)
|13.70% to 15.20%
|Up to 75 Lakh
|Bank of Baroda
|7.85% to 9.85%
|Up to 4 Lakh and above
|9.55% to 13.25%
|Up to 30 Lakh