Allan bloom quoted that Education is the movement from darkness to light. To make sure financial conditions of the student does not hamper the education of a student, Banks offer loans for `1education which can be repaid after the student graduates.
Banks offer several types of loan such as scholar loan, skill loan, global ed-vantage, take over education etc. which caters the need of different students. There are various terminologies and condition attached to every loan. They include: –
* Rate of interest – the rate of interest of banks varies
* Margin amount
* Repayment penalties
* Processing fee
Every bank has some eligibility criteria for education loan.
The loan is sanctioned to those only who fits in the eligibility criteria. The eligibility criteria are determined by bank policy prevailing at the time of loan application. Tough the eligibility criteria varies from bank to bank. Yet the criteria generally involve –
- The person who is having Indian citizenship fits in the eligibility criteria.
- Secured at least 50% Marks in intermediate and graduation.
- Who have obtained admission to career – oriented courses. i.e. – IIT, JEE, medical, management at graduate or post graduate level.
- Secured admission in India or abroad through entrance test/merit based selection process post complete of intermediate.
- Documents displaying regular income is mandatory for the co – applicants (parents/sibling/ guarantor)
Documents required in the process of sanctioning the education loan are –
- Age proof (birth certificate, passport, aadhar, pan card, driving licence)
- Address proof
- Marks sheet/ passing certificate of degree courses.
- Bank statement/ pass book of last month.
- Optional guarantor form
- Copy of admission letter of the institute along with fee schedule.
- Income statement (salary slip, income – tax return of the last 2 year)
- Dully filled loan form
- Passport size photo
Above are the documents required for the education loan sanction. You might be concerned about the repayment. Even banks provide a relaxation period after securing a job or after the completion of the course. The banks use the marginal cost of fund based leading rate (MCLR) plus. As per the Reserve Bank of India guidelines, there are no restriction on the age limit, but some bank may have it. So if you are confused what to pursue next seeing your financial condition, you can go for education loan to complete your academic journey.
And as the COVID-19 pandemic has disrupted the economic activities all across the country, there are chances of layoffs in many sector and people have risk of losing their jobs. Financial crisis is ought to occur and many people will suffer from them, if a person has graduated this year and has taken a loan which does not have relaxation period after passing out or if a person whose suffers from this has dependents who are looking for higher studies it will be hard to get loans due to current bank regulations. Thus it will be necessary for banks to revise their guidelines post-pandemic so that education of those suffering from the aftermath of the pandemic changes in rate of interest is declared till now .