It aims to provide the much needed financial support to deserving students for pursuing higher professional or technical education in India and abroad. It not only covers your tuition fees but also other fees like library charges, hostel and mess charges, the cost of books and equipment, maintenance, caution fund/building fund/refundable deposit and cost of passage (for studies abroad), etc.
The most important part before applying for a loan is the education loan eligibility. Every banks and finance company has certain verification procedure under which if the loan amount is too high (especially in case of foreign studies) they will check your co- signer's credit score and repayment capacity. Based on this the bank or private finance company will offer a certain amount towards education finance.
Some important education loan eligibility criteria followed across all banks & finance companies are as follows:
• You must be an Indian national
• You must be in the 16-26 age groups or any other range specified by the bank
• A good academic record (first class throughout, with no gaps or breaks in education, etc)
• Your parents/ guardian should have a regular source of income so that they are able to repay the loan if the need arises
• The institute you have applied for must be a recognized one
• Minors are ineligible for educational loans, as banks assess the individual's repaying capacity while disbursing the loan. But you can avail of the loan if your parents/ guardians satisfy the eligibility criteria.
There is education loan eligibility calculator that will help the prospective borrower to calculate the approximate amount of loan that he or she will be eligible, interest rate, processing fees, prepayment charges, etc.
For higher studies, government banks may demand margin money costs of around 15-20%. But some leading private finance firms have designed study loans without setting any cap on finance and also they are no margin money costs involved in it. They provide 100% coverage of education costs, making such young talents of India free from such burden. Factors such as academic score, recognition of the university applied for, gross income, credit worthiness of the loan seeker, course fees, and monthly expenditure are taken into monitored under the education loan eligibility parameter while sanctioning the loan. The loan gets disbursed directly to the university account so the student must have confirmed admission in the institute before the disbursement of the loan.