13 Things to know

before applying for

Education Loan
 Best time to apply for
Education Loan

While applying for an Education

Why to start Early?
Loan, students should be aware of
all the factors involved in it so as Co-Applicant or Co-
Signer
to make an informed decision.
ExpensesCovered by
We will be discussing most of Education Loan

them in coming slides.

Repayment Conditions

Factors Affecting Education

Loan
 ●The best time to start with the
Education loan process is when you
are done with the university
application process.

Best time ●No Need to wait for Admits to come

for starting your loan process
to apply for ●

Get your funding sorted before

Education admits

Loan
 Why to start Early?

Assured Funds ( Chances of Check Eligibility ( Come to

getting an admission to your know your loan eligibility in
dream university increases ) advance )

Apply to multiple loan Negotiate on ROI and

providers and save time and compare options & Avoid
choose the best deal last minute funding issues
during VISA
 Co-Applicant
or Co-Signer
A co-applicant in education loan is a person with a good
financial profile who co-signs the education loan
agreement with the student
If loan applicant (student) fails to repay the education
loan on time, Lenders can turn to Co-applicant for their
repayment
Moreover, in some cases Co-applicant needs to serve
interest on disbursed amount while student is studying
 Expenses Covered by
Education Loan
Tuition Fee payable
Accomodation Costs (On Campus/ Off Campus)
Examination/ library/ laboratory fee &Travel expenses
Health Insurance Charges
Purchase of books/ equipments/ uniforms/ instruments
&Purchase of computer/ Laptop
Any other expense required to complete the course like
study tour, project work, thesis.
Loan Amount
Loan Amount Applied: Amount which student has calculated
and applied for while filling up the loan application
Loan Sanctioned amount: Loan amount approved by the
lender. This amount is mentioned on the loan sanction letter
issued by lender.
Disbursed amount: Disbursed amount is the amount that is
actually used by the student from his sanctioned limit.
Interest and repayment calculations are done on this amount
only
Rate of 01 While applying for any loan
Rate of Interest is one of the

Interest
most important factor to be
considered

02 In case of Education Loan

the ROI varies according to
the lender and type of loan

03 Typically ROI ranges

between 9-13% p.a.
Serving the 01 Some lenders will ask you
to pay the Interest during

Interest moratorium period.

02 This Interest is calculated

on disbursed amount

03 In some cases Partial

Interest option is also
given by some banks
 Processing Fees

Processing fees is the Generally PF is charged

amount charged by the @ 0.5% to 1.5%
lenders to process your loan (+applicable taxes)
application.

Student needs to pay the PF after

getting the loan sanctioned. Banks
issue the Loan sanction letter only
after receiving the PF
Repayment Conditions
Repayment of an Education Loan begins one year after the
course completion
Depending upon the lender, repayment tenure of loan
generally ranges between 10-15 years
However this tenure can be adjusted according to student’s
convenience.
 Margin Money

The margin money in terms of Education loan is

the amount that is paid by the borrower while
rest of the amount is provided by the lender

Margin Money generally is 10-20% of total

requirement

Many lenders provide 100% funding, in such

cases there is no margin
CIBIL 01 Your CIBIL score is a three-
digit number ranging

Score
between 300 and 900 that
denotes your
creditworthiness

02 In case of an Education
Loan, Student’s as well as
Co-applicant’s CIBIL is
considered

03 A CIBIL score of 650+ is

considered to be a good
one.
 Factors Affecting
Education Loan
●Student’s Academics and University Rankings
●Co-applicant’s annual income
●CIBIL Score
●Existing Obligations of student/ Co-applicants
●No. of Backlogs in past academic records
Tax Benefit U/s 80 E
Section 80E provides you tax deduction on the “interest
component” paid on loan taken for higher education in India
or Abroad.
Both students and parents can avail this deduction for a
period of 8 years after repayment begins.
There is no limit of amount that can be claimed as deduction.
Thank You

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