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Education Loan Interest Rates in India 2017 - 2018

Last Updated 24th Jun 2017

Education Loan for Courses in India, US, France and Australia

  • Anyone in the country who wants to get higher education in India and abroad can apply for Education Loan
  • Repayment of the Education Loan starts after the completion of the course for a tenure of 5 to 7 years
  • Minimum amount to get Educational Loan should be Rs. 50,000. No guarantor or collateral is required for loans below Rs. 4 lakh
  • Some banks offer discounts or lower interest rates for female students on Education Loan
Apply Education Loan @ 11.10%*
Rs.
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Education Loan

  Courses in India Courses Abroad IIT, IIM, ISB Courses
Max Loan Amount No ceiling No ceiling No ceiling
Interest Rates      
Loans upto Rs. 4 lakh % - % % - % % - %
Loans Rs. 4.0 - 7.5 lakh % - % % - % % - %
Loans > Rs. 7.5 lakh % - % % - % % - %
Max Funding as Proportion of Cost      
Loans upto Rs. 4 lakh 100% 100% 100%
Loans above Rs. 4 lakh 100% 100% 100%
Max Tenure Post Moratorium      
Loans upto Rs. 7.5 lakh years years years
Loans above Rs. 7.5 lakh years years years
Co-Applicant required (Y/N) Yes Yes Yes
Third Party Guarantee      
Loans upto Rs. 4 lakh
Loans Rs. 4.0 - 7.5 lakh
Loans > Rs. 7.5 lakh
Collateral Security (Fixed deposit/ Property, LIC)      
Loans upto Rs. 4 lakh
Loans Rs. 4.0 - 7.5 lakh
Loans > Rs. 7.5 lakh
Prepayment Charges (Y/N)
Moratorium Period (lower of the two)      
After course period months months months
After getting job months months months

Student Loan Eligibility

Determinants of Eligibility for Education Loans

Age of the Applicant
  • Upto 35 years for non-employed personnels
  • Upto 45 years in case of working employees/ executives
Age of the Applicant
  • An Indian National having secured admission to professional/technical courses in recognized institutions.
  • Students seeking admission for higher studies.
  • Permanent employees who are employed for not less than three years with any organisation and who intend to acquire higher professional qualifications and have secured admissions in a reputed institute.
Maximum Loan Amount
  • No ceiling for studies in India; with minimum margin money (own contribution by student/ family) of % of total cost for loan above 4 Lakh. No Margin for loan less than 4 Lakh
  • No ceiling for studies abroad with minimum margin money (own contribution by student/ family) of % of total cost for loan above 4 Lakh. No Margin for loan less than 4 Lakh
  • No ceiling for studies at IIT's, IIM's and ISB's with minimum margin money (own contribution by student/ family) of % of total cost
Which Cost Heads/ Expenses are Funded by Bank
Co-borrower/ Guarantor/ Security
  • Loans upto Rs. 4 lakh: Parents or guardian or husband/ in-laws in case of married woman required as co-borrower
  • Loans above Rs. 4 lakh and upto Rs 7.5 lakh: Parents or guardian or husband/ in-laws in case of married woman required as co-borrower,
  • Above Rs. 7.5 lakh: Parents or guardian or husband/ in-laws in case of married woman required as co-borrower
Repayment Frequency
  • Quarterly or monthly rests.
  • Repayment typically starts 1 year after completing the course or six months after getting a job, whichever is earlier.
  • Loan interest re‐payment will start immediately after disbursement of the first installment of the loan.
Repayment Period
  • Tenure of an education loan consists of Duration of Study + Grace Period after the Study + Repayment Period.
  • For Indian courses repayment tenure is maximum of 5 years after the commencement of repayment.
  • For Abroad courses repayment tenure is maximum for 7 years after the commencement of repayment.
  • There is no prepayment penalty or charge on early prepayment or foreclosure.
Key Appraisal Criteria
  • Good academic record with atleast 50% marks in the qualifying examinations.
  • Admission letter from bonafide educational institution.
  • Passport/visa/i-20 form for studies abroad.
  • Net-worth and credit history (CIBIL) of the guarantors.
Tax Benefits
  • Interest paid on education loan can be claimed as deduction from income of borrower (student) as per Section 80E of the Income Tax Act, 1961.
  • Rebate can be claimed without any upper ceiling or cap.
  • Rebate is available for full time courses, part time courses and vocational courses pursued in India and abroad.
  • Rebate can be claimed within eight (8) years post moratorium period subject to actual payment of interest.
  • Rebate is available for interest paid on loans for education of self, spouse, children or for the student of whom he/she is the legal guardian.
  • No rebate is available for principal repayment.

Education Loan Interest Rate – Alternatives

  • In case you or your parents have availed a home loan and the property is registered, you may opt for a top up loan with balance transfer of the home loan . In this case, you don’t to provide any additional security and the rate of interest will be close to home loan rate (currently 8.60%). This will also be longer tenure loan (upto 15 years) and will result in lower EMI. However, you will not be able to claim income tax benefit available on education loan in this case.

online Education Loan – Things to check

  • You have a valid offer letter from a recognized educational institution.
  • You meet the eligibility criteria of the bank that you are applying to.
  • You have not defaulted on loans or credit card dues in the past and have not delayed payments. If you have, these will reflect in your CIBIL report, hurt your CIBIL score and may result in rejection of your education loan application. Estimate your CIBIL score for free by using CIBIL score estimate calculator.
  • Your CIBIL report does not erroneously show defaults or delayed payments. This can be due to inadvertent error in data shared by banks with CIBIL.
  • You have made own arrangement for margin money and for expenses that are not covered by banks under education loan.
Hdfc Credila Education Loan

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