Need an education loan? Ask these questions
The criteria to get an education loan are actually quite simple and basic. The first one is that you must be a citizen of India. Also, you cannot say you are tentatively/ probably going to get entry into a course. You should have already got admission. Once you secure admission to the course you wish to pursue, you are free to approach a bank or financial institution to avail of funding. Picking the right education requires a certain amount of research. Here are a few questions you must ask when looking for an education loan.1. How much will i have to pay?
Whenever you take a loan, the bank or financial institution will not fund the entire amount of your education. You will be expected to fund a part of it. Let’s say your fees total to Rs 10 lakh (Rs 1 million). The bank may offer to give a loan of 80% of the amount (Rs 8,00,000); you will have to put in the balance 20% (Rs 2,00,000). This is referred to as the margin amount. If the loan amount is not too large, the bank may offer to fund the entire amount.
There will always be a maximum amount that is given as loan. For instance, the maximum loan amount for studies abroad may be capped at Rs 20 lakh (Rs 2 million) by the bank. If your tuition fees amount to Rs 30 lakh (Rs 3 million), you obviously have to cough up the balance on your own.
Some banks may charge a processing fee, others may not. If they do, check whether it is a fixed amount or a percentage of the loan amount. Let’s say you are doing a course abroad that costs Rs 30 lakh. The bank is only going to fund Rs 20 lakh and will charge you a 1% processing fee. That will be another Rs 20,000 over and above the Rs 10 lakh you have to scout for. Or, let’s say, your course fee amounts to Rs 20 lakh and the bank funds 80% of the amount. Rs 16 lakh (Rs 1.6 million) will be picked up by the bank. You will have to come up with Rs 4,16,000 (Rs 4,00,000 margin amount + 16,000 processing fees).