What can an educational loan be used for? In other words, for what courses can an educational loan be obtained?

Educational loans are available for higher education (full-time graduate or post-graduate course) in technology, engineering, architecture, medicine, management and applied or pure sciences, including mathematics and statistics.  
It is best to check with the bank you are interested in getting the loan from, if the course you are going in for is covered under their educational loans.

Who is eligible for the loan?

Only the individual opting for higher studies can go in for the loan.

 

What is covered under the loan?

Tuition fees payable to college/school Examination / library / hostel charges Travel expenses
Purchase of books /equipment /uniform Cost of two-wheelers (optional)

 

What is the interest applicable on Educational loans?

Again, the interest rates vary from bank to bank and depend on the amount of the loan taken. Typically, interest rates on educational loans range between 11.25% and 13.5%.

 

Are there any other fees applicable while taking this loan?

Banks charge you processing fees for approving the loan and basically doing all the paperwork. These fees range between 2.25% and 2.50%.
Another charge or more appropriately expense that you would most probably need to bear is the margin amount. Normally, banks do not approve the loan that would cover the entire cost of your education. For example, for a loan of Rs. 10 lakh, the bank would approve only 80% or Rs. 8 lakh. The additional Rs. 2 lakh that you would have to raise from your own sources is called the margin amount.

 

What are the documents required while applying for the loan ?

The required list of documents may vary from bank to bank. The most common documents would be:
Proof of admission (educational loan cannot be applied without proof that admission has been secured in the selected institution)
Schedule of fees from the institution
Mark sheet of the last qualifying examination
Photographs
If the applicant is earning then:
Bank account statement
Income tax assessment order of last 2 years

 

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