Banks and financial institutions in India help students fulfil their dream of pursuing higher education by providing them with financial aid. Applying for an education loan is one of the best ways for students to pursue their dreams of higher studies without financial constraints coming in the way. If you are thinking about applying for an education loan in India, scroll through this in-depth guide to acquire important information. 

Education Loan Amount

The amount that you can borrow from an education loan scheme will depend on multiple factors, including the following:

  • Type of Institution: Students who get admission to premier educational institutions are likely to get a higher amount of education loan. This becomes possible because most students in premier institutes get high-paying jobs after finishing their courses.
  • Course Duration: An education loan scheme will lend a higher amount for post-graduate or doctorate courses. You are likely to get a small amount sanctioned when you take admission in short-term or vocational courses. 
  • Institute Location: The cost of studying abroad is extremely expensive because of high tuition fees, living expenses, and currency exchange rates. Therefore, you will usually be able to borrow a high loan amount when you take admission in a foreign university. 
  • Security: While wondering how to apply for education loan, several students try to figure out whether they need to submit any collateral. While you can get an education loan without collateral, you will usually be able to borrow a higher amount when you provide collateral. 
  • Repayment Capacity: Banks and financial institutions figure out the repayment capacity of a student by checking out their potential income after completing the course. In some cases, the loan amount is influenced by the repayment capacity of the co-borrower. 

Education Loan Interest Rates and Charges

The interest rate of an education loan will vary according to the repayment capacity, loan tenure, and amount borrowed. Usually, the education loan interest rates are kept affordable for the convenience of students. Some other charges associated with an education loan are as follows:

  • Processing Fee: Students will have to pay the processing during the time of the educational loan application. Usually, the processing fee ranges between 0.5% to 2.5%. 
  • Pre-payment Charges: This small fee is applicable when a student tries to repay any additional amount along with the EMI. 
  • Foreclosure Charges: These charges are applicable when a borrower tries to repay their loan before the end of the tenure.  
  • Penal Interest: Students will have to bear a penal interest charge for failing to repay the education loan during the chosen tenure. 

Parting Words

If you are wondering how to get education loan after 12th, check out the IDFC FIRST Bank or its official website. The bank allows students to borrow up to Rs 1 crore to fund their higher studies. In fact, the bank offers collateral-free educational loans of up to Rs 50 lakhs for the increased convenience of students. So, check your eligibility and get your education loan today!