Student Loan Settlement

The solution to the problem is educational loan. Education loans are being offered by many banks and financial institutions in India. These loans are offered at competitive interest rates ranging anywhere between 9.5% and 15.75% and with repayment tenure of 5 to7years. (Repayment tenure begins after one year of completion of course or six months after securing a job whichever is earlier).
Educational loans are unsecured loans up to an amount of Rs 4 lakh.  Loan above Rs 4 lakh up to Rs 7.5 lakh requires collateral in the form of third party guarantee. At times the bank could also waive third party guarantee for above amount if satisfied with the net worth of the parents who acts as joint borrowers. For amount above Rs 7.5 lakh banks ask for collateral in the form of tangible security along with assignment of future income of children for successful repayment of instalments.

Avail an educational loan

Higher studies pursued from renowned institutes like the IIMs, IITs, could be a costly affair starting with a minimum of Rs 10 lakh. Overseas studies could be even more costly with a minimum of Rs 20 lakh.  To avail such a huge amount one can look for scholarships and grants. A lot of merit based scholarships are available both for courses in India and abroad. However, at times even scholarships available, partly fund the course leaving the rest to be managed from own resources. In such a scenario educational loans could always be your saviour.

Availing educational loans from banks is not an easy task. Although educational loans come under priority sector lending availing one is like running from pillar to post unless one fulfils all the necessary requirements put forward by the lending institution.  Every lender has a list of specified courses and institutions for which the loan is readily available. Also the rate of interest differs if the selected institute is a renowned one. Thus before applying for an educational loan it is indispensable to work on few factors like your loan eligibility, lenders interest rate, loan repayment period, documentation required, security required etc. Also check for any late payment fees and prepayment fees for educational loan.

Time factor

The maximum loan amount one can avail for higher education in India is Rs 10 lakh and for overseas is Rs 20 lakh. For a lender to approve a loan application it would take, on optimistic basis around 30-35 working days provided all documents required are readily available with the borrower. If all the loan requirements and documentation formalities are successfully fulfilled it would take another 15-30 days for loan disbursal.