Apply for Education Loan
EMI Calculator
EMI Amount:₹
Education Loan Features
Pre Admission Sanction
Maximum Loan Repayment Tenure
Tax Benefit U/s 80 (E)
Education Loan - Benefits
1
Avail high value loans
Before applying for the loan, prepare a business plan, know your credit score, decide the loan amount, do some market research on available business loan options, and keep the documents ready.
2
Enjoy attractive interest rates
Proof of address & photo identity proof of the promoters, business proof, income proof, partnership deed for partnership firm, articles of association, memorandum of association, board resolution, PAN card, etc.
3
Pre Admission Sanction
Applicants should be aged between 21 to 65 years, having business vintage of a minimum of 3 years. The minimum business turnover and a minimum annual turnover as per the ITR will be required. The business should be profit-making for at least the last 1 year.
Features and Benefits of our Education Loan
- Moratorium Period : Repayment typically starts after the completion of the course, providing students time to secure employment.
- Co-borrower Option : Parents or guardians can be co-borrowers to enhance eligibility.
- Tax Benefits : Repayment interest might be eligible for tax deductions under Section 80E of the Income Tax Act.
- Multiple Courses and Institutions : Loans are available for various courses, from school education to higher studies, and for institutions in India and abroad.
- Collateral and Non-Collateral Loans : Depending on the loan amount, some may require collateral, while smaller loans might not need any security.
Education Loan Eligibility and Documents
Read on to know the criteria required to apply for our Education Loan.
Eligibility Criteria
Education loan eligibility criteria can vary depending on the country of study, the lender, and the type of loan you're applying for. However in a general overview the factors that often influence education loan eligibility are:
Age: Most lenders have a minimum and maximum age requirement for loan applicants. Typically, you need to be of legal age (18 or older) to apply for a loan.
Course/Program Eligibility: Education loans are often tied to specific educational programs or courses. Lenders may have a list of eligible institutions and programs that qualify for loans.
Admission Offer: Many lenders require proof of admission to an eligible educational institution before approving a loan application.
Academic Performance: Some lenders might consider your academic performance as part of the eligibility criteria. This could include factors like your high school or previous education grades.
Co-borrower or Guarantor: If you have limited credit history or income, some lenders might require a co-borrower or guarantor (usually a parent or guardian) who will share the responsibility of repaying the loan if you are unable to do so.
Credit History: Student's as well as their co-borrower/guarantor's credit history and credit score can play a significant role in determining your eligibility for an education loan. A good credit history can improve your chances of approval and may lead to more favorable loan terms.
Income/Financial Ability: Some lenders may consider your ability to repay the loan based on your income or your co-borrower's income.
Loan Amount: The loan amount you're requesting in relation to the cost of the program might affect your eligibility. Lenders may have specific limits on the loan amount they are willing to offer.
Collateral or Security: In some cases, lenders might require collateral or security against the loan, especially for larger loan amounts. This could be in the form of property, investments, or other valuable assets.
Documentation: You will likely need to provide various documents as part of your loan application, such as proof of identity, proof of admission, income documents, and more.
Documents Required to Apply for Education Loan
Documentation: You will likely need to provide various documents as part of your loan application, such as proof of identity, proof of admission, income documents, and more for both Student as well as the Guarantor or co-borrower.
- Student-Applicant
- Co-applicant/Guarantor
- Income Proof for Salaried Co-applicant/ Guarantor
- Income Proof for Self-employed Co-applicant/ Guarantor
Explore in detail by Visiting the Documents Required Page
Education Loan EMI Calculator
Using an Education Loan EMI (Equated Monthly Installment) calculator can help you estimate your monthly loan repayment amount.
Follow these steps to use a Education Loan EMI calculator effectively:
- Enter Loan amount, interest rate, tenure.
- Click Calculate.
- View EMI, total interest, repayment.
- Adjust tenure if needed.
- Consider extra costs.
- Check budget compatibility.
- Confirm with the lender before finalizing.
How is Education Loan EMI Calculated?
Education Loan EMI (Equated Monthly Installment) is calculated using the following Compound Interest formula:
EMI = [P * r * (1 + r)^n] / [(1 + r)^n - 1]
Where:
EMI = Equated Monthly Installment
P = Loan principal amount
r = Monthly interest rate (Annual interest rate divided by 12, expressed as a decimal)
n = Loan tenure in months
How to Calculate the Educational Loans EMI?
To use an Education Loan EMI Calculator:
Input Loan Details: Enter the loan amount you plan to borrow, the applicable interest rate, and the repayment tenure (in months or years).
Calculate: Click the "Calculate" or "Calculate EMI" button to obtain the estimated monthly EMI amount.
View Results: The calculator will display the monthly EMI, as well as a breakup of the principal and interest components for each payment.
Consider Variations: You can experiment with different loan amounts, interest rates, and repayment tenures to see how they affect your EMI.
Assess Affordability: The calculated EMI can help you determine whether the repayment amount fits within your budget.
Plan Your Finances: Use the EMI calculation to plan your monthly finances and ensure timely repayment of the loan.
Fees and Charges for Education Loan
The fees and charges of education loans usually vary from lender to lender and from case to case. The aforementioned table will give you a fair idea of the fees and charges related to education loans:
Particulars
Charges
Loan Processing Fees
0.5% to 4% of loan amount
Loan Cancellation
Usually around Rs 3,000
Stamp Duty Charges
As per actuals
Legal Fees
As per actuals
Penal Charges
Usually @ 2% per month; 24% p.a.
EMI/Cheque Bounce
Around Rs 400 per bounce
Education Loan Reviews
4/5
Ruloans personnel helped me in getting an education loan from axis bank for my son who wanted to complete his medical studies in UK. I was happy with the deal and rate of interest they helped me in getting from the bank.
KETKI SHARMA
4/5
Hdfc rejected my education loan application as I didn't had any collateral to provide and also my income was a little low than required. I got in touch with Mr. Rohan from RULOANS, he was successful in getting me the loan, the rate was a little higher than usual but I was okay with it as I was happy that atleast I got the loan.
DAKSHA KALE
Learn more about Education Loans
Let’s read about the 5 most important facts on Education Loan tax benefits:
Section 80E Income Tax Deduction
A person can claim the interest portion of a Loan under Section 80E of the Income Tax Act. Citizens can make use of Section 80E of the Income Tax Act, which is targeted solely at the educational sector. Only Education Loans are eligible for tax deductions under Section 80E. Maximum tax deduction amount
Under Section 80E of the Income Tax Act, you may claim the cost of Education Loans as part of the tuition fee you pay to any college, university, or other educational institution. On courses that you, your spouse, and your children enroll in, you can claim Educational Loan tax benefits. You can deduct such debts from your taxes in India whether you took out an Education Loan for a study in India or overseas. The only requirement is that the Loan must be obtained from the Banks and NBFCs that RBI has authorized.
Eligibility for tax deductions
Only individual taxpayers are eligible for Education Loan tax benefits. Under Section 80E of the Income Tax Act, Hindu undivided families (HUFs) are not eligible for tax deductions.
If the following conditions are met, you can claim tax advantages for an Education Loan:
- You have obtained a Loan for your child;
- You obtained the Loan for your own use;
- You obtained the Loan on behalf of your spouse;
- You are the borrower's legal guardian, according to the Loan application.
Tax deduction criteria
You must be aware that the tax advantages are only applicable to the interest portion of Education Loans, not the principal amount. There is no upper limit to your savings, and you can deduct all of the interest that is due in a given fiscal year.
Tax benefits from Banks and NBFCs
Section 80E tax deductions are only available if you borrowed money for your study from a legitimate Bank or Non-Banking Financial Companies (NBFCs). Therefore, if you borrow money to pay for your higher education from a friend or a relative, you will not be eligible for any tax benefits.
Moratorium Period:
The moratorium period is a distinctive aspect of education loans. This provision allows you to opt for a deferment of EMI payments for a maximum of 12 months after completing your studies or within 6 months of commencing employment, whichever comes earlier. However, the precise length of the moratorium period is subject to the policies of the respective bank.
Choosing the Right Time to Begin Education Loan Repayment:
While a moratorium period is available, it is advisable to initiate the repayment of your education loan at your earliest convenience. It's important to note that the moratorium period does not exempt you from interest charges. Particularly in India, education loan interest rates are notably high.
Interest continues to accumulate during the moratorium period, even though you aren't required to repay the principal amount. This results in a higher burden of interest and an increased overall loan cost. Moreover, starting repayment early can contribute positively to building a favorable credit score.
Process for Repaying Education Loans:
The process for repaying an education loan is relatively straightforward. Contact your bank's manager to establish an arrangement for automatic deductions from your account. Additionally, you may want to explore the variety of education loan repayment options that are available in India.
Additional Points to Consider:
The repayment duration can vary between different banks and is often contingent upon the amount of the loan you've availed. For students pursuing education abroad, the repayment period can extend up to 15 years, affording them ample time to gradually settle the loan through smaller installments.
In regard to prepayment of education loans, it's worth noting that banks generally do not impose charges. However, it's typically not recommended to prepay or fully settle the education loan ahead of schedule. This is primarily due to the fact that education loans offer potential tax deductions on the interest paid, as outlined in Section 80E of relevant tax regulations.
- Age: Most lenders have a minimum and maximum age requirement for loan applicants. Typically, you need to be of legal age (18 or older) to apply for a loan.
- Course/Program Eligibility: Education loans are often tied to specific educational programs or courses. Lenders may have a list of eligible institutions and programs that qualify for loans.
- Admission Offer: Many lenders require proof of admission to an eligible educational institution before approving a loan application.
- Academic Performance: Some lenders might consider your academic performance as part of the eligibility criteria. This could include factors like your high school or previous education grades.
- Co-borrower or Guarantor: If you have limited credit history or income, some lenders might require a co-borrower or guarantor (usually a parent or guardian) who will share the responsibility of repaying the loan if you are unable to do so.
- Credit History: Student's as well as their co-borrower/guarantor's credit history and credit score can play a significant role in determining your eligibility for an education loan. A good credit history can improve your chances of approval and may lead to more favorable loan terms.
- Income/Financial Ability: Some lenders may consider your ability to repay the loan based on your income or your co-borrower's income.
- Loan Amount: The loan amount you're requesting in relation to the cost of the program might affect your eligibility. Lenders may have specific limits on the loan amount they are willing to offer.
- Collateral or Security: In some cases, lenders might require collateral or security against the loan, especially for larger loan amounts. This could be in the form of property, investments, or other valuable assets.
- Documentation: You will likely need to provide various documents as part of your loan application, such as proof of identity, proof of admission, income documents, and more.
Education Loan is a credit facility offered by Banks/NBFCs and various other financial institutions to meet the business requirements of individuals, self-employed customers, business owners, MSMEs, and other business entities. Loan against property can be availed by startups, entrepreneurs, retailers, traders, manufacturers, self-employed professionals (CAs/Doctors), existing businesses, and several other business entities.
Education Loan is majorly classified into two types, such as Secured loan and Unsecured loan. Secured loans are types of loans that require collateral/security, that borrowers need to deposit with the lender to avail funds. However, in the case of unsecured loans, there is no need to submit any type of collateral/security with the Bank/NBFC, or any other financial institution.
Banks/NBFCs offer a range of both Secured and Unsecured Education Loans that include Term Loans (Short-term/Intermediate-term/Long-term), Working Capital Loans, Cash Credit, Overdraft, Letter of Credit, Bill/Invoice Discounting, Equipment Finance, Machinery Loans, Point-of-Sale (POS) Loans/Merchant Cash Advance, Fleet Finance, Loans under Bank Guarantee (BG), and Loans under Govt. schemes, such as Mudra Loans (PMMY), SIDBI, PMEGP, CGTMSE, Stand Up India, PSB Loans in 59 minutes, PMRY, etc. Financial institutions also offer Startup Loans, Small Home Loans, Instant Loan against property and Micro Loans of loan amount up to Rs. 10 lakh or more depending upon personal requirements.
FAQs on Education Loans
An education loan is a financial product designed to assist students and their families in covering the costs associated with higher education, including tuition fees, books, living expenses, and more.
Eligibility criteria vary by lender and country, but typically include factors like admission to an eligible program, citizenship or residency status, academic performance, and more.
A moratorium period is a grace period during which borrowers are not required to make loan repayments, usually after graduation or starting a job. However, interest might accrue during this time.
Repayment usually starts after the moratorium period ends, based on the terms of the loan agreement.
Repayment options include standard, graduated, and income-driven plans, each with different terms and monthly payments.
Most lenders allow prepayment without penalties, allowing borrowers to pay off the loan faster and reduce interest costs.
Loan forgiveness programs, often for specific professions or circumstances, can lead to a portion or all of the loan being forgiven.
Contact your loan servicer to set up repayment details, including auto-deductions from your bank account.
In some countries, education loan interest payments may be eligible for tax deductions. Check your local tax regulations for details.
Missing payments can result in late fees, damage to your credit score, and potential legal actions by the lender.
Depending on the lender, you might have the option to switch to a different repayment plan if your financial circumstances change.
Yes, some lenders offer education loans to international students, often with certain conditions or requirements.
Depending on your credit history and income, a co-borrower or guarantor might be required to secure the loan.
Contact various lenders, gather required documents (such as admission offer letters), and follow the application process outlined by the chosen lender.
Loan limits vary based on factors such as the lender's policies, the country's regulations, and the program of study.
