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Things you should know about education loan




Practical tip : Education loan depends on Bank Manager’s Business focus as according to managers I interacted with, their experience with education loan repayment is not as positive as compared to home loan repayment. So start application early and apply with more than one banker so that you do not face problem when you need money.

I. Repayment starts six months to one year after completion of the course and simple interest charged during the moratorium period.

II. Education loans are available to Indian nationals who have secured admission to professional or technical courses in India or abroad through a merit based selection process.

III. Banks offer loans of up to Rs 10 lakh for courses in Indian colleges and up to Rs 20 lakh for studies abroad, in line with the Indian Banks/’ Association norms.

IV. For an education loan, a co-applicant is a must and can be either parents, spouse or siblings.

V. No security is required if the loan amount is less than Rs 4 lakh. For loans above Rs 4 lakh, a personal guarantee is required from a person whose income and repayment capacity is acceptable to the lender. For loans above Rs 7.5 lakh, the lenders will require an acceptable collateral security such as a residential house, jewellery, securities etc.

VI. Repayment starts six months to one year after completion of the course and simple interest charged during the moratorium period.




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