Are you going to complete your elementary school education soon and happen to be a meritorious student? Do you have dreams to see your child or yourself as a scholar with flying colours?
But wait! When you look at your accounts you feel disheartened! We say, don’t be.
India has emerged as a huge market for banking and finance with many government and private banks coming out to your rescue.
Gone are the days when higher education was limited to just a few elite or the ruling class. You just have to ambitious enough fuelled with passion to excel and prove your mettle in academics and there are numerous helping hands for your aid to make your higher education dreams come true!
Indians students are regarded to be the one of the best minds in the world and every top university abroad offering higher education is willing to not let at least the money come in the way. That you can be sure of!
So let’s have a look at how education loan for Indian students work?
It is noteworthy to know that Indian Government collaborated with Reserve Bank of India (RBI) and Indian Banker’s Association (IBA) drafting a Comprehensive Educational Loan Scheme making sure that no worthy Indian student shall be denied of higher education. It covers every discipline including professional courses in Indian universities and abroad.
The key features of the scheme for education loan for Indian students are enlisted as:
- Loans up to Rs.7.5 lakh and Rs. 15 lakh for higher education in India and abroad respectively.
- No collateral or margin required for loans up to Rs. 4 lakh and the interest rate not exceeding the Prime Lending Rates (PLR) whereas it is PLR plus 1 percent for loans above Rs. 4 lakh.
- Repayment of the loans over a period of 5 to 7 years with a grace period provision of one year after completion of higher studies.
Let us talk about the Tax Benefit if you are applying for your higher education loan:
- Under Section 80E of the Income Tax Act governs the deduction of repayment of an education loan. The annual limit for deduction is Rs. 40,000 for both the principal and the interest.
- Deduction can be claimed only for loans taken for higher education which includes full time studies in any graduate, post-graduate, professional pure and applied science courses.
- The deduction is available for a maximum of eight years beginning from the day you start your repayment.
The Reserve Bank of India (RBI) issues guidelines to all commercial banks in India to launch higher education loan schemes which are available with almost all the banking institutions of your choosing.
So much for your Higher Education Loans!
It does relieve you, doesn’t it?
Let us look at document pre-requisite for Indian students seeking higher education abroad:
- Mark sheets of school and graduate studies in India.
- Admission proof to the course.
- Expense schedule for the course.
- Copy of letter affirming scholarship, if any.
- Copy of Foreign Exchange permit (if available).
- Two passport size photographs.
- Last six months’ Statement of borrower’s bank account.
- Income Tax assessment order not older than two years
- Brief statement of Borrowers Assets and Liabilities.
- Proof of identity and residence.
We are sure you ended reading with a sigh of relief with all your queries solved regarding higher education loan and its requirements for Indian students.