Everything You Need to Know About Education Loan
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Banks and NBFC institutions offer educational loans to students to cover the cost of studying abroad. Before you start the application process for a student loan, it's important to understand the key factors that can impact your loan, such as interest rates, repayment options, and loan amount.
The easy application process for student loans has helped many students finance their higher education. Education loans help students to meet the financial requirements to complete their dream of studying abroad or domestically. Loan providers, such as banks and NBFC institutions, offer students to repay the loan after completing their overseas studies. NBFCs like HDFC Credila provide loans up to 100% of educational finance. In some cases, NBFCs may sanction a loan amount higher than the specified limit if certain conditions are met. Educational loans have made higher education dreams accessible for many students over the years.
As most of the students do not have a previous credit history, the parent or guardian has to co-sign for an education loan as a co-borrower or guarantor. Moreover, education loans also require collateral such as property documents, fixed deposits, etc. against education loans to minimize risks. Before submitting the application process for a student loan, it's crucial to understand every possible detail related to student loans. Besides being a reliable way to fund higher education, education loans offer numerous advantages. This article will help you to understand the basic details of student loans.
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Also Read:
- Education Loan Interest Rates
- How to Repay Student Loans Faster?
- SBI Education Loan for Study Abroad
- Studying Abroad attracts tax collected at source (TCS) of 0.5 and 5%
Shiksha has partnered with India’s topmost and trusted loan providers who will assist you in getting an education loan. Find out more!
Tenure of Education Loan
The average tenure for an education loan is between 5-7 years in case of most banks. However, some NBFCs can offer a longer tenure of up to 12 years in case of higher loan amounts. Since the tax benefits on interest paid on the education loan can be availed for a total of 8 years from the beginning of repayment, you are advised to repay your loan in a period of 8 years to maximize tax benefit on your education loan.
Factors that Influence the Amount of Loan an Applicant
The maximum amount of loan an applicant is eligible for is determined by a variety of factors. These factors include, among others:
- Credit Worthiness: Credit worthiness is a factor determined by evaluating a person’s credit history. Lenders check an individual’s credit worthiness to determine his/her ability to repay the loan on time. This is done to minimize the risks associated with an education loan. Individuals with a clean credit history tend to get higher loan amounts and quicker approvals.
- Credit Score: Credit score plays a crucial role in determining your eligibility for loans, credit cards etc. Timely payment of credit card bills and EMIs on existing loans reflects positively on your credit score and help in improving your chances of getting an education loan.
- Value of Collateral:Education loan lenders generally ask for collateral for loans exceeding Rs. 7.5 Lakh to minimize their risk. In case a borrower fails to pay the loan, the collateral is used to recover the loan amount. Applicants who offer collateral of good value stand a better chance of getting high amount education loans.
- Academic History of Student:The academic track record of a student plays a very important role while sanctioning the education loan. Meritorious students with an exceptional academic background exhibit seriousness towards their education and career and hence, have a better chance of getting well-paying jobs in the future.
Despite the specified limit, you must carefully calculate your expected expenses and apply for an appropriate amount that covers all your needs without becoming a financial burden in future. While contemplating the education loan amount you must consider the salary you expect to draw after your completion of course since it will significantly impact your loan repayment capability.
Apply for an education loan through Shiksha Study Abroad partners
Related Articles:
- The A to Z of Study Abroad Loans: All Terms and Their Definitions
- How to choose your bank for Education Loan to Study Abroad
- Education Loan Vs. Self Funding to Study Abroad
- Collateral for Education Loan: Everything You Need to Know
- Step by Step Guide to Education Loans
About the Author
Q: Is university of West of Scotland good for international students?
The University of the West of Scotland has five modern and diverse campuses in United Kingdom. The University has welcomed more than 3,000 international students which are representing 1/3 of the globe. They also have 130 European partners who are actively in global study and exchange options through the Commonwealth universities programmes. The University also offers study abroad opportunities for UWS who are eligible for the same and also have more than 20 transnational education partners worldwide which helps them deliver UWS Bachelors and Masters Degrees around the world.
Q: How to prepare for UK 10th board exam 2025?
Those who are preparing for the UK Class 10 exam 2025 are recommended to follow the tips below.
- Know the exam pattern
- Make a proper time table as per the syllabus
- Solve previous year question papers
- Make short notes of important formulas and theorems
- Revise regularly
- Figure out weaker areas and learn them well
With proper planning and hard work, students can easily clear the UK 10th board exam.
Q: Why indian students choose to study at Hult International Business School - UK?
Indian students choose to study at Hult International Business School in the UK for several reasons, including its highly ranked programs, global outlook, and career support. Hult offers a range of full-time master’s degrees, immersive bachelor's programs, and MBA options that prepare students to excel in the global job market. The school is the largest and top-ranked global business school, providing students with an incomparable universal outlook. Additionally, Hult's focus on experiential learning, extensive career support, and the opportunity to study at multiple campuses around the world are attractive to Indian students seeking a global business education. Furthermore, the school's emphasis on innovation and meeting the needs of students and employers may also contribute to its appeal to Indian students
Q: What rank is Wolverhampton University in UK?
The University of Wolverhampton is one of the best universities in the United Kingdom. The university is consistently ranked among the best universities nationally and globally. For nearly 200 years, the University of Wolverhampton has been consistently providing a quality of education to students and producing highly skilled graduates. The national rankings of the University of Wolverhampton are given below:
| Ranking Body | Ranking |
|---|---|
| The Guardian University Guide 2024 | #101 |
| The Complete University Guide 2024 | #117 |
Q: How to download UK Board 12th date sheet 2024?
Following are the steps to download the UK 12th date sheet 2024.
- Open the Uttarakhand Board's official website at ubse.uk.gov.in
- Click on 'Examination Scheme' available on the homepage
- A new window will appear on the screen containing a link of the UK Board 12th date sheet 2024
- Click the link and download the Uttarakhand 12th date sheet 2024
Q: How can I get a 100% scholarship to study in UK?
Yes, it is possible to get 100% scholarships to study in the UK. There are various external funding agencies that offer 100% scholarships to international students to study in the UK. Three main UK government scholarships for international students are;
However, to get 100% scholarships to study in the UK, international students must meet all the eligibility criteria and apply within the deadlines.
Q: How to prepare for UK 10th board exam 2025?
Those who are preparing for the UK Class 10 exam 2025 are recommended to follow the tips below.
- Know the exam pattern
- Make a proper time table as per the syllabus
- Solve previous year question papers
- Make short notes of important formulas and theorems
- Revise regularly
- Figure out weaker areas and learn them well
With proper planning and hard work, students can easily clear the UK 10th board exam.
Q: Does the University of Essex require IELTS?
International students whose native language is not English must meet the University of Essex English language requirements to get admission. The university accepts IELTS scores as proof of English language proficiency. Mentioned below are the IELTS scores required for UG and PG admission at the university:
English Language Test | Score |
|---|---|
IELTS | Overall score of 5.5 to 8.0 with minimum of 5.5 to 7.5 in each section |
The university also accepts the score of other English language tests such as TOEFL and PTE for admission to undergraduate and graduate programs:
English Language Test | Score |
TOEFL iBT | Overall score of 72 to 114 |
PTE | Overall score of 59 to 84 with minimum of 59 to 80 in each section |
Also read: Required IELTS Score for UK Universities
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