Education Loan

Education loan

If you are dreaming to study abroad, you might require to take up the education loan to bridge the gap of available finance and the required funds. Whichever course or the university you may choose to study abroad,STC can surely guide you to avail of the Education loan to fulfill your dream.

About Education Loan

Basically the concept of education loan is to bridge the finance till the student completes the studies and then let the student pay back the same to the financiers in the form of EMI. The student is expected to get the employment on completion of the course and pay back from the salary. Accordingly, the education loan is generally in the name of the student. However, the money is always co-borrowed by the parents in order to securitize the loan extended to the student.

There are 2 types of Education loan available for the students.

  • The education loan by the public sector banks.
  • The private companies providing education loan.

Education loan by Public Sector Banks:

Most of the study abroad programs are covered by the public banks for providing education loan. Generally they prefer to know the customers before they provide the loan and accordingly, you should approach the branch of your own bankers. There are 3 slabs of education loan which are popular among most of the banks:

Rs. 4 Lacs Based on parents income proof
Rs. 7.50 Lacs Based on Guarantor’s income proof
Rs. 20 Lacs Additional collateral security

The tenure of repayment is very convenient for the students such as 10 years for Rs. 7.50 Lac loan and 15 years for Rs. 20 Lacs amount. Also, the scheme have 1 year of moratorium period after completion of the study / course. This period allows the student gives time to get the employment.
Till the loan repayment is started in the form of EMI, the parent needs to pay the interest rate. Generally the interest rate is around 12% (changes constantly) for boys and a discount on interest rate for 11.5% for girls.
Generally, the education loan product has high NPA (Non-Performing Asset) meaning the repayment problems. Accordingly, the bank managers are not very anxious to give education loan. The responsibility for allotting sanction of education loan remains with the bank manager. The risk taking ability of the bank manager is limited especially for education loan and

Education loan by Private companies

Nowadays, there are few companies offering the education loan in the market. HDFC Credila is one of the pioneers in the field of providing education loan for study abroad to the students. The schemes for individual type of programs and for parents with varied financial back ground are customized. It is the first company to launch education loan for many students looking to study abroad

  • MBBS in USA. MBA
  • MS programs in various countries including Germany
  • MBA abroad in various countries

Generally the interest rate of the private companies providing education loan is higher than the public sector banks of India. However, their professional services and quick loan sanction process makes them a preferred choice among the students.

HDFC Credila

Who can apply for a loan?

Indians, planning for higher education in Abroad.

What if I am applying to other countries too?

The product given under is for Abroad. We have specialized products for other countries too. You may apply to us even before finalizing your country of education. However, the final loan product shall be as per the Country finalized by you for your higher education.

In what currency do I get/repay the loan?

  • This is an Indian Rupee denominated education loan for following students
  • Indian students attending colleges in India.
  • The loan will be disbursed in India in Indian Rupees wherever required by student.
  • Repayments of the loan to be made by the borrower in Indian Rupees only
  • Study in Europe for various Career programs
  • Eligibility
  • Co‐applicant Requirements
  • What Costs Are Covered?
  • Loan Amount
  • Rate Of Interest
  • Loan Disbursement
  • Loan Re‐payment Terms
  • Collateral

Eligibility

  • Borrower must be an Indian citizen
  • Co-applicants must be an Indian citizen
  • Co-borrower(s) must have a bank account in any bank in India with cheque writing facilities
  • Confirmed admission in the colleges before disbursement 

Borrower and Co‐applicant(s) to meet HDFC Credila's credit and underwriting norms as applicable from time to time

Co‐applicant Requirements

  • It is mandatory to bring in an earning co‐applicant(s) based in India to support the Education Loan application.
  • Co‐applicant(s) may be any of the following relatives, viz Father / Mother / Brother / Sister (married) /Spouse, where such Co‐applicant's income would be considered in determining the loan eligibility per HDFC Credila's credit and underwriting norms;
  • Co‐applicant's liability is co extensive with the Student;
  • Co‐applicant(s) to provide documentary proof to establish their relationship with the student, to the satisfaction of HDFC Credila;
  • In case the collateral to be provided is not provided by one of the above relatives, then the collateral could be provided by one of the following relatives provided they are brought into the arrangement as Co‐applicant(s) viz: Father‐in‐law; Mother‐in‐law; Sister‐in‐law; Brother‐in‐law; Maternal or Paternal Uncle or Aunt, Grandparents & First Cousins.

What Costs Are Covered?

All of the tuition fees as determined by the college/University 
Up to 100% of other expenses including living and hostel expenses, travelling expenses, examination fees, library/laboratory fees; purchase of booksequipment's/instruments/uniforms; passage money for studies into India; purchase of computers / laptops considered necessary for completion of the course as decided by HDFC Credila. Travel fare restricted to one economy class return ticket between India and the country of study.

Loan Amount

  • Minimum Loan Amount Indian Rupees 1,00,000
  • Lifetime Maximum Loan Amount: HDFC Credila does not have an upper limit on the loan. We process loans exceeding Indian Rupees 25,00,000 also, subject to the case meeting HDFC Credila's credit and underwriting norms as applicable from time to time.

Rate Of Interest

  • Rate of interest will be floating rate of interest linked to HDFC Credila's Benchmark Lending Rate (CBLR)
  • The interest will be calculated using Simple Interest Rate
  • Floating rate of interest to be (HDFC Credila's CBLR + Spread)% per annum
  • For HDFC Credila's current CBLR Click Here
  • A Spread is determined on the risk profile of the case which vary on account of a number of factors such as student's academic background, employability of the selected course from a selected college and country of study, financial strength of the co‐borrower, loan repayment capability, credit history, collateral offered or not, serviceability of the loan through HDFC Credila's branch network, cost/s associated with underwriting and servicing the loan, etc.

Loan Disbursement

  • The loan amount will be disbursed in Indian Rupees
  • HDFC Credila will disburse the tuition fee to the educational institute either directly or through an authorized servicer
  • The tuition fee will be disbursed in installment as per the requirement of the specific educational institute
  • The loan amount related to other expenses will be disbursed in installments spread over the duration of the study as per HDFC Credila's underwriting norms as applicable from time to time

Loan Re-payment Terms

  • Loan interest re-payment will start immediately after disbursement of the first installment of the loan
  • Tenure of an education loan consists of Duration of Study + Grace Period after the Study + Repayment Period
  • HDFC Credila offers maximum tenure of 12 years
  • The loan tenure is however, subject to the factors such as the repayment capacity of the customer/s, future prospects of the course, age of the co‐applicant, etc. and further subject to HDFC Credila's credit and underwriting norms as applicable from time to time. However, HDFC Credila would endeavour to determine the repayment period to suit your convenience.
  • Monthly repayment amount will be deducted from the bank account of the borrower/co-borrower using Electronic Clearing System (ECS)

Collateral

The following types of collateral are accepted

  • Residential Flat
  • Residential House
  • Non‐Agricultural Land
  • A Fixed Deposit, assigned in favour of HDFC Credila

Loan for Study Abroad programs

You can apply for the Education loan by simply submitting the following documents:
  • Admission letter
  • Cost to study for the entire course duration including travel cost
  • Residential proof
  • Income Proof
  • Guarantors if any (All the personal and income proof of Guarantors)
  • Copy of the documents for immovable property towards Collateral Security

The documents are assessed for the initial screening and the confirmation of the loan is given within 1 week on submission of all the required documents.
You may either contact our office or directly the education loan provider for further information.

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