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Education Loan

Now education is becoming so expensive that you have to invest a lot for getting a quality education.  Many people take an educational loan to graduate from a top institution. But, it is a fact that the cost of studying at reputed institutes is increasing very rapidly. 

To whom is the loan offered?

The educational loan is offered to students who want to study in India or want to pursue higher education in foreign countries. The educational loan provided to the student for studying in India and for foreign education is different. That’s why; educational loan plays a very vital role in creating a bridge, which fills the gap between the shortfall and the required amount. 

Types of Courses Covered Under the Loan 

The educational loan can be taken on a full-time basis, part-time basis or vocational course and graduation or post-graduation in different fields like engineering, management, hotel management, medical, architecture, etc.  

Loan Financing, Collateral Requirement

The bank can finance your educational loan up to 100% depending upon the amount you are lending. According to current status, up to Rs 4 lakh, there is no need for margin money. For study in India, only 5% of the required amount has to be financed by own. And for studying overseas, the required amount increases to 15%.


Usually, the banks utilize the marginal cost of funds based lending rate (MCLR) with an extra addition of interest rate. Currently, the additional spread amount is in between 1.35 to 3%. 


The educational loan is repaid by the applicant only. Normally, the repayment begins when the course is finished. Some banks provide even a relaxation period of about 6 months after securing a job or one year after the completion of the course for repayment. 


While applying for an educational loan, one should be cautious for bank charges like the related to processing, pre-payment, and late payment of EMIs, etc. Most of the lenders charge the processing fee near about 0.15 percent of the loan amount. Meenakshi associates helps and assist you in the whole process of lending educational loan so that you can achieve your goal smoothly. 


Under the section 80E of the I-T Act allows for a reduction on the interest paid on the repayment from the students. This reduction is allowed only for those individuals, who are paying interest on the loan for himself.