Education Loan: Take a loan to Pay Fees of Your Childrens



Education loans have a lower interest rate compared with personal loans. You could also get a further concession if you provide a collateral.”

It’s very likely that the fee your parents paid to educate you from kindergarten till graduation is less than the annual fee that you pay for your child’s playschool today. In a metro city, a playschool can make you poorer by Rs 35,000-1 lakh a year, while primary and secondary education in a private school can cost between Rs 50,000 and Rs 5 lakh a year.

Paying such high fees could be a problem if you face a financial crisis, but there’s no way you can remove your child from school, can you? Now, you can resolve this dilemma by simply stepping into a bank. Yes, banks have started offering education loan for children’s school fees, a phenomenon that took off about a year ago.

Loan criteria

Earlier, education loans were offered only for professional courses. Now, you can take them to pay the school fee for classes ranging from nursery to senior secondary. The banks that offer this facility include public sector entities, such as Bank of Baroda, Central Bank of India, State Bank of Hyderabad and J&K Bank. The loan amount usually varies from Rs 30,000-1 lakh, but the Bank of Baroda has an upper limit of Rs 4 lakh. Though you don’t need an account with these banks to avail of the facility, accountholders are given preference. As a senior official from the Central Bank of India affirms, “We will give a loan to a customer even if he does not have an account with us, but serving an existing customer will be our first priority.” Another condition is that the school should be affiliated to ICSE, CBSE or any state education board.

The loan is primarily meant to fund the tuition fee, but it can also be used to pay for other expenses, such as buying a laptop or any apparatus that may be required for projects. However, in such a case, the equipment will remain in the bank’s name as security till the total amount is paid.

Cost of loan

Another option to tide over the difficult period is taking a personal loan , but this comes with a high rate of interest, which ranges from 14-19% and can go up to 24% in certain situations. On the other hand, an education loan is available at 12-13%. Despite the fact that both are unsecured loans, the one for education is cheaper. If you are taking a loan to finance your daughter’s education, you will be able to get an additional concession of 0.5-1% on the existing rate.

“Generally, education loans are based on the parent’s/guardian’s income level and their capability to repay. The interest rates also depend on the income as well as the credit profile of the borrower. You could also get a concession if you provide a security or a collateral,”.

Funding for coaching

Coaching classes, which help students prepare for various entrance exams, have become a vital part of the education system. Ranjana Sharma, who scored 95% in her higher secondary, aspires to become a doctor, but her father cannot pay the hefty fee demanded by the coaching institute. He can now approach the banks as they provide loans for coaching taken for professional courses. So, students appearing for entrance exams for civil services, medicine, chartered accountancy, engineering, etc, can opt for this loan.

Education loans: From India or US?

Interest rates are favourable in the US. However, either the university or a green card holder should be a guarantor.

Planning to study abroad? Most students’ first thought would be to take an education loan. And, the cheaper the rate, the better.

For students applying to US universities, there is another option to garner funds. Provided they have a guarantor – a green card holder or, in some cases, if the university stands the guarantee – they can avail the loan in the US itself.

According to data from the Open Door Report published by the Institute of International Education, US were the preferred destination for Indian students, with 104,897 of them opting for courses in 2010.

According to Karan Gupta, an education consultant, countries like UK, Australia and New Zealand require students to make a partial or complete payment of fee as a visa requirement. Therefore, the funding has to be done from India itself.

Most US universities have tie-ups with banks like Citibank and institutes like Sallie Mae which provide student loans. The university is the guarantor to the loan. However, after the 2008 recession, the numbers of universities offering such facilities and the courses for which the loans can be availed have come down.

The other option is to directly approach these institutes for a loan. However, one needs to have an American citizen as a guarantor in such cases.

COMPARISON
Opting for loans from US banks works because of the low interest rate they offer. Currently, loans sanctioned through US universities charge interest at around 7 per cent. In contrast, education loans from Indian bank are expensive. For instance, State Bank of India and Axis Bank extend loans at 12.75 and 14.75 per cent, respectively.

Loan repayment tenure is longer in the US. According to educational consultants, management and technical courses for which loans are offered cost around Rs 45-50 lakh and the equated monthly installments for these works out to at least Rs 1 lakh. Thus, the students would either need high paying jobs on the completion of the course or be given the option of longer tenure to repay the loans.

While university backed loans have a tenure of 20 -30 years, those availed directly through banks are shorter, at 15 years.

In comparison, most Indian banks have repayment tenure of around 7 years. If you opt for a loan through Credila, an education loan company by HDFC limited, the tenure is longer, at 10 years. Also, the quantum of loan disbursed in India is capped at Rs 20 Lakh. However, officially, there is no cap on the amount in the US. “Lenders fix their own parameters depending on the course and degree level,” says Gupta.

GUARANTORS AND CO-BORROWERS
Most Indian banks ask the parents to sign up as co-borrowers and pledge collateral in case the loan amount is higher than Rs 7.5 lakh. However, some banks may be willing to forego the collateral, says S Govindan, GM (personal banking), Union Bank of India. “This could differ on a case to case basis. Depending on the family’s standing, just a guarantee could also be sufficient,” he adds.

In the US, banks will look at your guarantor’s credit history before giving a loan. In case you plan to return to India, you will have to foreclose the loan, else, your guarantor will be held liable.

LOWERING LIABILITY
Whether in India or the US, students are expected to start repaying six months after completing the course. “However, there is nothing that stops them from making early payments, at least, the interest component, to reduce liabilities,” says V N Kulkarni, chief Counsellor, Abhay Credit Counselling Centre.

While the course is underway, banks charge only the interest component and that too, on a simple interest basis. There is no compulsion to pay off this portion while still studying, but doing so would help as once the repayment begins, calculations are done on a compound interest basis. The additional interest burden could mean a huge payout.

HDFC Education Loan | Features Benefits Interest Rates | Apply

HDFC Education Loan: Compare and Choose Best Education Loans with lowest Current Interest Rates, Documents, Eligibility and Apply Online. With HDFC bankstudent education loans, pursue your dream higher studies without worrying for financial assistance. We provide student education loans for all Graduate, Post-Graduate, Engineering, Medical, MBA , Vocational Courses (Multi-Media, ERP) offered by recognized institutions in India. No more running from pillar to post for availing student loans! Our friendly sales managers will guide you in every step to make your dreams into reality.

Features & Benefits –
Student Loans Upto Rs. 15 Lakhs for education In India
Unsecured Lending Upto INR 7.5 Lakhs
No Collateral Or Third Party Guarantee**
Wider Range Of Collateral For Loans Above INR 7.5 Lakhs
Residential Property
HDFC Bank Fixed Deposit
LIC/NSC/KVP
Loan available upto tenure of 7 years including moratorium period
Repayment to start 1 year after course completion / 6 months after obtaining employment (whichever is earlier)
Loans available for short duration/ job oriented courses also
Avail the tax rebate, offered under section 80-E of the Income Tax Act 1961* for the entire interest amount paid towards your education loan.
Click here to view the income tax circular.
E-mail loansupport@hdfcbank.com to receive interest certificate for FY 09-10.
Loans available for other course related expenses also!


Special privileges
Eligibility
Service At Your Door Step
You need to be a Resident Indian
Loans disbursed directly to the educational institution as Per the Fee Schdule.
You should be aged between 16 – 35 yrs.
Insurance Protection from HDFC ERGO
Collateral is required for all loans greater than Rs. 7.5 Lakhs.
Gateway To Other Banking Products And Services.
All Loans require a co-applicant. For co-applicant eligibility
Savings Account
For complete documentation click here

Click to Know – Fees and Charges



Insurance Protection from HDFC ERGO General Insurance Company Ltd
HDFC ERGO General Insurance Company Limited is a 74:26 joint venture between HDFC Limited, India’s premier Housing Finance Institution & ERGO International AG, the primary insurance entity of Munich Re Group.

HDFC ERGO focuses on providing the “Right Insurance Solution” for all. They offer customers complete range of general insurance products ranging from Motor, Health, Travel, Home and Personal Accident in the retail space and customized products like Property, Marine and Liability Insurance in the corporate space.

The organization has been expanding its presence across the country and is today present across 46 cities with 52 branch offices with an employee base of over 650 professionals. The company has a right balance of distribution channel comprising of Dealerships, Brokers, Retail and Corporate Agents, Bancassurance and Direct Sales Team.

Fees & Charges for Education Loan HDFC

HDFC Education Loan Fees and Charges: Compare Fees and Charges of HDFC Education loan online and Apply Online HDFC Education Loan.


Description of ChargesEducation Loan
Loan Processing ChargesUpto a maximum 2% of the loan amount
Prepayment (upto 6 months of repayment )No pre-payment permitted
Pre-payment charges (after 6 months of repayment)Upto 4% of the Principal Outstanding
No Due Certificate / No Objection Certificate (NOC)Nil
Solvency CertificateNot applicable
Charges for late payment of EMI@ 24 % p.a. on amount outstanding from date of default
Credit assessment chargesNot applicable
Non standard repayment chargesNot applicable
Cheque swapping chargesUpto Rs. 500/- per event
Loan Re-Booking / Re-Schedulement ChargesUpto Rs. 1000/-
Bounce Cheque ChargesUpto Rs. 450/- per Bouncing
Legal / incidental chargesAt actual
Stamp Duty & other statutory chargesAs per applicable laws of the state

IIFL to enter educational loan segment



Financial Services provider India Infoline (IIFL) is planning to enter the educational loan segment by this financial year.

“The education loan segment would cater to higher institutions. IIFL has also entered the healthcare loan segment recently,” Mukesh Kumar Singh, senior vice-president (Gold loans), IIFL, said addressing the media here on Tuesday.

India Infoline Investment Services Limited (IIISL), an NBFC subsidiary of India Infoline (IIFL), is coming up with the secured nonconvertible debentures (NCDs) of a face value of Rs 1,000 each, aggregating Rs 375 crore, with an option to retain over-subscription of up to Rs 375 crore, which would make the total issue size of Rs 750 crore.

In the last three years, the loan book of the company has been growing at 56 per cent, along with the housing andgold loan sector. The mortgage loan segment has grown by 15 per cent in the first quarter this year, and comprises 60 per cent of its loan-book of Rs 3,200 crore, he added.

The loan to GDP ratio in India is 60 per cent, which is much lesser compared with the developed countries, where it is 100 per cent. The mortgage loan to GDP ratio is only 9 per cent, as against around 17 and 20 per cent in Thailand and China. A lot of potential lies in India in these segments, he adds.

For the financial year 2011, IIFL reported Rs 519 crore income and profit after tax of Rs 92 crore (15 per cent growth over the previous year).

Allahabad Bank Education Loan| Interest Rates| Eligibility| Apply



Allahabad Bank Education Loans Schemes – Compare Eligibility, Interest Rates, Offers, EMI and Procedure of Education loan from Allahabad Education Loan.

Eligibility:
Indian National who has secured admission to professional/ technical courses in recognized institutions in India or Abroad through Entrance Test/ Merit Based Selection Process after completion of H.S.C. (10 plus 2 OR equivalent).

Courses Eligible:

Courses eligible for study in India:
Approved courses leading to Graduate/ Posy-Graduate degree and P.G. Diplomas conducted by recognized Colleges/ Universities recognized by UGC/ Govt./ AICTE/ AIBMS/ ICMR etc.
Courses like ICWA, CA, CFA etc.
Courses conducted by IIMs, IITs/ IISc, XLRI, NIFT, NID etc.
Regular Degree/ Diploma Courses like Aeronautical, Pilot Training, Shipping etc. approved by Director General of Civil Aviation/ Shipping, if the course is pursued in India.
Approved courses offered in India by reputed Foreign Universities.

Courses eligible for Study abroad:
Graduation: For Job oriented professional/technical courses offered by reputed Universities.
Post Graduation: MCA, MBA, MS etc.
Courses conducted by CIMA London, CPA in USA etc.
Regular Degree/ Diploma courses like Aeronautical, pilot training, shipping etc., the Institute duly recognized by the Competent University/ State Body/ Local Aviation/ Shipping Authority.
Education Loan Interest Rates
(i) For IIT/ IIM/ ISB (loan upto 10.00 Lacs)
(ii) For Others
(a) Loan upto 4.00 Lacs
(b) Loan above Rs.4.00 Lacs 10.75%+2.25% = 13.00%



10.75%+3.00% =13.75%
10.75%+3.00% =13.75%
@ For girl students, rebate @1% will be allowed under each slab.
Rebate of 1.00% on the interest charged in the moratorium period will be provided if the interest is serviced during the study period when repayment holiday is specified for interest / repayment under the scheme.


Quantum of Loan:

Need based finance subject to repaying capacity of the parents / students with following ceilings:
Studies in India: Maximum Rs. 10.00 lac
Studies abroad: Maximum Rs. 20.00 lac.

Expenses Considered for Loan
Fee payable to College / School /Hostel
Examination/Library/Laboratory Fee
Purchase of Books / Equipments/ Instruments/ Uniforms.
Caution Deposit/ Building Fund/ Refundable Deposit supported by Bills/Receipts of the Institution, subject to the conditions that amount does not exceed 10% of the total tuition fees for the entire course.
Travel Expenses/Passage Money for studies abroad.
Purchase of Computers essential for completion of the course at reasonable cost.
Insurance premium for student borrower.
Any other expenses required to complete the course, such as- Study Tours, Project Work, and Thesis etc.
Reimbursement of the fee paid at the time of counseling if applied within 60 days from the date of such payment.

Repayment:
Repayment Holiday / Moratorium is “Course Period + 1 year” or “6 months after getting job”, whichever is earlier.
Loans up to Rs.7.50 Lac to be repaid within a maximum period of 10 years & those above Rs.7.50 Lac within a maximum period of 15 years after commencement of repayment period.

Education Loan Interest Rates Reduced by 1 Percent: SBI



India’s largest lender, State Bank of India (SBI) on Monday said it has reduced the interest rate on education loanby up to one percent across different segments.

“In order to extend financial assistance to students pursuing higher education in India and abroad at affordable rate,SBI has reduced the rate of interest for education loans,” the bank said in a statement.

The new rates are applicable from Monday. The base rate of the bank is 10 percent.

Loans up to Rs.4 lakh will get an interest benefit of 0.25 percent at 13.5 percent while loans between Rs.4 lakh and Rs.7.5 lakh will become cheaper by one percent at 13.25 percent.

Loans beyond Rs.7.5 lakh will get 0.25 percent relief at 12 percent.

Under the student loan scheme, loans up to Rs.10 lakh for studies in India and upto Rs.20 lakh for studies abroad are given.

Besides, under SBI scholar loan scheme, loans are extended to students joining elite institutions like IIMs, IITs, NITs and others.

At present, 111 institutes are covered under this scheme and loans up to Rs.15 lakh are given.

Loans are sanctioned without any security except the parent or guardian as co-borrower. The rate of interest under this scheme has also been reduced by 25 basis points.

Thus, the new rate of interest is 200 bps above base rate, currently 12 percent per annum. In addition the bank would offer 0.50 percent additional concession for girls.

Education Loan India | Interest Rates | Eligibility | Documents | Apply

Education loan – Get Instant Quotes on education loan interest rate, eligibility, payment options, waiver, subsidy of all Banks.Instant Apply for Education loans in India Online.
Special Education Grant

Special education generally refers to students who are differently-abled. However, it can also refer to students who require special education needs in other ways. For example, students with emotional difficulties that make it difficult to study may qualify for certain types of special education grants and loans. Students who are not able to attend regular classes for a specific reason may also qualify for special education loans and special consideration when pursuing a college degree. If, for example, you are hospitalized, you may qualify for special aid. Special education grants exist from a number of sources. These types of aid do not have to be paid back but allow students to pay for their education.

Grants for special education should be sought out earnestly by those were qualified for them. When it comes to grants, special-education students do qualify for both regular grants and special education grants. Students will want to apply for both types of grants to ensure that they get the funding they need.

Know About: Education Loan Eligibility and Documents

Click here to Apply Education loan online
Special Education Financial Aid options:

If you have a condition that prevents you from attending classes or taking part in degree programs regularly — for example, you are differently-abled or seriously ill and cannot leave the hospital room — then special grants andloans exist to help you pay for education. Students with special needs often find that they require extra money for school. They may require Braille translated textbooks, for example, or they may require special computer equipment that allows them to study. Grants designed especially for special-education hope to address these additional costs for students while at the same time encouraging students with different abilities to apply for degree program.
Criteria for Special-Education Scholarship, Grant, or Loan:

If you have trouble with school because of the physical, emotional, or mental challenge, then chances are pretty good that there are financial aid options available for you. Some types of special-education scholarships or grants are designed for people with specific types of challenges. Others are simply earmarked for anyone who faces special challenges when pursuing an education.

Depending on the grants or scholarships to apply for, you may find that you require additional application materials. Often, you will need to provide a doctor’s note or some other confirmation of your condition. You’ll often also be asked to describe how your condition affects your ability to function.
Types of Special-Education Financial Aid Options:

If you have special needs when it comes to education, there are many places that you can turn to for financial aid:
– The American Council on Education’s HEATH Resource Center Offers Financial Aid and Advice and Resources for Students
– Special Government Grants and Scholarships Exist for Students with Special Needs
– Private Scholarships Created Specifically for Students with Special Education Needs – Your school’s financial aid office will have a list of such private scholarship and grant opportunities. Most schools have their own scholarships and grants designed for differently-abled students. If your school has a special education office or center, that center will be able to give you additional help and resources.
Special Education Loans

If you require additional money because of special needs, special-education borrowing can help you make up the difference between your needs and your financial aid package. Federal student loan programs as well as private lenders will be able to lend you money that you can use toward your schooling. Once you finish your schooling or no longer enrolled, you will need to pay back your debt — with interest.



Distance Education Loans



Distance education is more popular than ever today. It allows students to study remotely, without having to attend classes at a university. This allows students from all walks of life to pursue a college education without disrupting their family or work life. While there is no doubt that distance education makes education more accessible to many, students often find that they require distance education loans in order to pay for their remote education. Distance learning education loans are more available than ever before. Students can now turn to a number of sources in order to get the money they need to succeed in school.
Alternative Education Loans

Alternative education loans are also known as private education loans. These loans are simply amounts of money lent by private lenders. They may be offered by banks, private companies, or other financial institutions or persons. The loans are attractive to distance education students because they are so flexible. You do not need to be a full-time student, in many cases, to qualify for some form of loan. You often do not need to be a United States citizen in order to apply for such loan. You can also apply this type of education loan to any school you attend.
Financial Institution Loans – Flexible Loans

Do you need a loan for education, because you’re going to college, university, or some other form of school?

You should consider private loans from financial institutions. Student loans from financial institutions are very flexible, have competitive rates, and can be used for a wide variety of school related expenses.
Bank Loans

If you’re looking for online distance education loans, you may wish to seek out traditional loans as well. Traditional lines of credit, credit cards, personal loans, and other types of loans can provide a good alternative to distance education loans. These loans can help you pay off your education, and do not require an extensive application process. As long as your credit is decent, you can get approved with competitive interest rates. Of course, you will need to start repaying your loan right away. However, since many people pursuing distance education work full time as well, this is rarely a problem. An advantage of this type of loan is that it does not leave the student with a large debt after graduation. Plus, since many people pursuing distance education do so one course at a time, it is possible to get out one or two small loans in order to pay for education. In many cases, students find that this is enough.
Employer Education Loans

Some employers offer their employees financial assistance in order to go to school. Often, this is because extra education can make an employee more productive and more valuable to the workplace. Some employers are willing to offer private loans, or offer loans based on employers retirement contributions, in order to allow the employee to attend distance education courses.

NOW we have all the options in front of you to make the educational journey backed by proper financial assistance if you need any. Happy studying…