Define Student Loan
A student loan is basically a sum of money which is borrowed from the government or other financial institutions like bank to finance schooling, graduation or post-graduation courses or other higher studies. Loans offered by the government are comparatively lower in interest. These can be paid after a specific period of time or after the students starts earning a particular amount. This waiting period is called moratorium period.
This loan basically cover tuition fees, books, supplies, accommodation fees, travel expenses and other miscellaneous expenses. Majority of India banks provides student loans for studying in India or abroad. Some banks provide the facility of credit cards to their respective education loan borrowers. Interest rates tend to be lower for student loans in comparison to the other loans.
There are certain requirements that needs to be met to avail student loan in India. Firstly the applicant is required to be an Indian citizen. There is also a limitation of age to avail student loan. The age should be between 18-35 years. Also the applicant should have a good record in the studies and should have already secured admission to a recognized university/institutions. The course selected by applicant should also come under the loan requirements. As shared above this loan can be availed for both studies in India and abroad. Student can apply for a loan for maximum amount of 1 crore.
Student Loans repayment schedules –
The repayment time period is generally up to 15 years and also interest rates generally starts from 7.3%. The moratorium period is up to 1 year after the completion of the course or up to 6 months after securing the job.
Students can avail tax benefit for the interest paid under Section 80-E of the Income tax act. Applicant have to give some collateral to avail student loans. It may be a commercial property, fixed deposits and insurance. Applicants can repay the amount through monthly installments.
Female students are given special concessional interest rates to promote their education. Applicants have to fill the application form and have to submit their photograph with age proof, identity proof, address proof, signature proof, admission proof, latest mark sheet, income proof of the co-applicant along with other documents to avail this loan.