Things you need to know about the educational loan before visiting an Education loan Provider in Hyderabad.

Education is one of the most important things in today's date. Quality of education is necessary to lead a good and prosperous life. But education is getting costlier day by day.

 

Parents these days leave no stone unturned to give their children quality education. They take up to various ways of investment like mutual funds (MFs), fixed deposits (FDs), for the long term.

 

But sometimes there might be a shortage of funds despite all the investment. That is when education loan is required.

 

What Educational Loan Covers? Who Can Apply?  And Documents Required

 

An education loan covers the necessary fee and other related expenses of the course that the child has taken up. Apart from that they also cover up for misc, costs and exams. The students can apply for this loan all by themselves. This loan is offered to them who aspire to study in India or abroad. The amount that is provided varies from one place to another. This loan covers up full-time courses and graduation and posts graduation programmes.

 

Students holding proper Indian citizenship can apply for the educational loans, and they should have secured the admission to a registered college which recognized by a competent authority India or Abroad. The student must be a high school pass out to be eligible to apply.

 

The student is required additional documents such as admission letter of the institution, fee structure, and X, XII mark sheet. If the student needs loans for post-graduation programme, then he would need the graduation mark sheet along with the income documents like salary slip or the ITR of the co-applicant.

 

 

Financing and collateral requirement

 

Banks finance 100% of the loan depending on the amount. There is no margin money required for loans up to 4 lakhs. The applicant has to pay 5% of the necessary amount by himself, and for overseas the margin money goes up to 15%.

The banks require collateral for an amount of about 7.5 lakh rupees. For loans above four lakhs to 7.5 lakhs need a third party.

 

After the acceptance of the loan application, the banks disburse the amount to the institution directly.

 

Interest Rates

 

The banks use MCLR and an additional spread to set an interest rate. The present spread is in the 1.35-3% range.

 

Repayment

 

The student makes the repayment of the loan. The repayment generally starts after the completion of the particular course the loan has been taken. But some banks provide relaxation period of 6 months after securing a job or a year after the end of the studies.

 

The repayment can be made between the course of 5-7 years, but with if asked can be extended beyond that.

 

The bank, however, charges simple interest during the course period.

 

These are few things which are very important while applying for an Education Loan in Hyderabad or any other city in the country. A student and a parent both need to know about these accurately before they apply for it.