Student Loan
Student education loans from various banks and other financial institutions in India are inspiring more and more students to take up higher studies in spite of their financial shortcomings. Many nationalized banks have come up with various educational loan schemes that students can benefit from. The amount of loan ranges from Rs 7.5 lakhs to Rs. 10 lakhs for studies in India and Rs. 15 lakhs to Rs. 20 lakhs for studies abroad. The actual amount depends on the bank, rate of interest and other factors.

1. Student Loan in India
The basic requirements before applying for Student Loan

• The applicant should be an Indian National.
• The applicant should have secured admission to the professional/technical course in India or abroad for which the loan is sought.

2. The Process
Application can be done directly to the Banks for student loans. Online student loan forms are available with most of the banks. The major steps involving the disbursal of education loans can be summarized as:

• Apply for the Loan complete with all documents required by the bank
• Verification of the documents furnished, age proof, residence proof and other formalities.
• Credit Appraisal for deciding if the applicant is legitimate for the loan
• Disbursal of the loan.

3. Repayment Option
The repayment options vary from bank to bank. But it is worth to ensure the repayment plans accordingly before agreeing to the loan. Maximum loan tenure varies according to the plan of repayment opted. The interest rate & EMI depends on the tenure and amount of the loan. But in general Repayment holiday/ postponement is course period (for the loan) + 1 year or 6 months after getting job, whichever is earlier.

4. Types of interest rates for the Caloans (Student Loan rates)
In general the rate of interest is 12% p.a. for loan amount. Simple interest is calculated during the period of repayment holiday/ moratorium. Some banks offer concession for woman applicants' to a certain percentage (0.50% p.a.).

5. Security
In general no security is required for loan amount up to Rs. 4 lakh. For loan amount ranging from Rs.4 lakh & Rs.7.5 lakh a collateral security of a third party guarantee is required. Parents/ Guardians of students can be the guarantor. Above Rs.7.5 lakh a collateral security of suitable value or suitable third party guarantee along with the assignment of future income of the student for payment of loan installments is required.

6. Documents Required
The following documents are required by almost every bank or financial institution:

• ID Proof
• Documents for proof of age/date of birth
• Proof of residential address.
• Signature Proof.
• Agreement with the student.
• Guarantee of father/guardian
• Guarantee of 3rd party.

7. Tenure
Banks offer secured as well as unsecured loans for Student education loans in India. Secured loans are repaid in seven years by mortgaging residential properties or shares as security. The unsecured loans can be repaid in four years.
The loan is repaid in 5-7 years after commencement of repayment.