Education Loan
An education loan is a monetary assistance that students avail to meet the expenses associated with their studies. Students who wish to avail of education loans are advised to borrow, based on their needs as the repayment periods for these loans can vary to a great extent depending upon the lender agreement and the amount borrowed.
Most of the student loans available to individuals in India are granted at a relatively low rate of interest, and interest payments need not be made immediately. Students are usually granted a period prior to the time they take the loan to the time they start making repayments.
Education loans are a type of unsecured loan that can be used to cover expenses related to education, such as tuition fees, books, living expenses, and other such expenses as transportation costs, etc. If a student wishes to avail of an education loan but is unemployed or still studying, a co-signer / guarantor may be required to apply for an education loan, like an eligible adult such as a parent or relative. The repayment of the loan starts once the student has completed his/her course/degree the loan was intended for. The terms and conditions associated with the repayment of an education loan are usually flexible and availing of one is fairly simple and straightforward.
The following are the type of education loans provided based on the security of collateral or guarantee:
- Loan against deposits: Education loans can be availed against recurring deposits or fixed deposits or gold deposits.
- Loan against property: Banks and NBFCs also provide education loans against immovable assets such as residential land/agricultural land/houses/flats, etc.
- Loan against securities: The borrower can avail of education loans against debentures/bonds/equity shares.