Define Education loan, eligibility criteria
If insufficient funds or poor financial condition is shattering your dream of higher education then you just need not to worry. Now, most of the commercial banks in India are providing the education loan to complete your whole education. To apply for the education loan you have to fulfil certain eligibility criteria which are set by each bank for providing you the education loan.
What is education loan?
In simple language, we can define this loan as the financial assistant provided by the bank to the students to complete their whole education if the students fulfil certain criteria. The main objective of this loan is that each deserving student in India can fulfil his or her dream of study irrespective of his financial status. The main criterion which makes this loan different from home loan or other types of loan is the easier terms and conditions for education loan.
In other words, this loan is meant to provide the basic education for poor and to provide the higher study to the deserving students on nominal interest rates.Education loan eligibility criteria
The government has set certain eligibility criteria for this loan so that only deserving candidates can avail this facility of this loan. Eligibility criteria for this loan can be broadly divided into following categories.Courses for education loan in India
Here is the list of courses eligible for education loan in India.Courses eligible for education loan abroad
Student's eligibility for the education loan
A student fulfilling the following conditions are eligible for this loan.Expense covered in the Education loan
This loan covers the following expenses of a student during the course of the study.Security required for the education loan
For a loan amount of upto 2 lakhs there is no need of any security.But, for the loan amount of more than 2 lakhs, a collateral security equal to 100% of the loan amount and a guarantee of the third person known to the bank for 100% loan amount is required. If the land or home of the student is already mortgaged then unencumbered portion can be taken as security provided it covers the required amount of this loan.
The security can be in the form of a land or building or public sector bonds or units of UTI, NSC, KVP, LIC policy, gold, shares or debentures, bank deposit in the name of student or any other third party with suitable margin. There is one more regulation regarding the security that if the loan is given for the purchase of a computer then the same to be hypothecated to the Bank.
For the detailed knowledge of disbursement and repayment of the education loan, you can read the given article- Disbursement and repayment of education loan