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Education is one of the most vital parts of our life. Nowadays, the funding required from nursery education to higher education and pursuing a full-time course from foreign universities come with an excessive load of finances. People from different backgrounds and income groups find it tough to acquire funding for their children's education.
Today, Byju’s, Unacademy, and Upgrad are one of the largest edtech players globally, that makes adaptive, engaging, and effective learning programs for students. These major players have become a part of a rare and exclusive club: the Unicorn club.
India holds a major role in the global education industry. The education sector in India was estimated to be worth US$ 117 billion in FY20. Edtech startups raised over $4.7 billion in the year 2021.
We are lucky to live in the digital era where getting multiple types of loans has become effortless. Nowadays, the cost of education in India and abroad is increasing and it becomes difficult for students to get a quality education.
Hence, NBFCs and financial institutions in India realized the need for educational loans and introduced short-term loans for funding education.
Benefits of getting an Education loan
Education loans are accessible to everyone due to the simplified processes offered by financial institutions to support students' careers.
A student's Education loan covers different costs like travel, living, study material, laptops, insurance, etc.
Interest on Education loans is comparatively lower than the other types of loans.
By taking an education loan, parents get relieved of the financial burden and the student gets a great chance to pay for their own education.
Another important aspect is that the financial institution provides a flexible repayment option making it simpler for students to pay back the loan themselves once they get a job.
Education Loan: Product offerings
Education loan is taken by students to continue their education with the least financial load. Here are the standard offerings of loans:
Domestic Education Loan: A student would get a loan only if he/she gets admission to an Indian educational institution.
Study Abroad Education Loan: This loan is provided to Indian students as well as non-residents of India to complete their education from outside the geographical area of the country.
Graduate Student Loans: These loans are directed for the student who are planning to go for post graduation degree within India only.
Career Education Loan: This loan can be availed by students who want to join career-oriented programs at technical colleges etc.
Refinance loan: This loan is generally taken to pay out one or more outstanding loans.
Education Institution loan: This loan focus on building the education infrastructure of the country more prominent.
Top Education Loan Providers in India
There are many Education loan providers which provide a variety of options to students and helped them to finance their studies. The highest quality of education should be available for all students regardless of someone’s financial background. That’s exactly the reason why these loan providers have made the availability of Student Loans as easy as possible. Here is the list:
ICICI Education Loan
TATA Capital Education Loan
HDFC Education Loan
Mpower Financing
Prodigy Finance
PNB Education Loan
Bank of Baroda Education Loan
Necessary documents required to get Education Loan
Education Loans are allowed to a student only after they submit the required documents.
Marksheet and passing certificate of 10th and 12th exams
Admission Letter from the respective college/university
Fee structure
KYC document of the applicant and co-applicant
Income proof in some cases
Address proof
Identification card
Collateral Security documents.
Conclusion
Education loan is the most cost-effective means to fund education. As we have seen Education sector plays a major role in today’s era. Education loan is the most cost-effective means to fund education. An educational loan is a good way for parents and students itself to finance their higher studies in case of a shortage of funds. Major Fintechs and financial institutions are standing out and providing education loans with great efficiency. Though most banks provide an education loan, in today's era there are certain fintech players giving attractive offers on the same.
SynoFin is building India's holistic technology for NBFCs and banks offering vast experience in the implementation of technology software and solutions for 50+ NBFCs and banks. A vast range of leading software is available to manage this education loan management system, offering too many features. SynoFin offers complete loan management software solutions that will drive your system effectively and efficiently.
FAQs
How does the Repayment Schedule Work?
Generally, financial institutions don’t expect to do repayments for the loan during the course of the program. Generally, all education loan provides a moratorium duration while there may be no want to pay anything to the bank. The repayment commonly begins six to 12 months after the course completion.
Do education loans have any Income Tax benefits?
Who is eligible for an education loan?
Does an education loan require security or collateral?
Is the loan disbursed in favour of the borrower or the institute/college/university?
Can a student avail another loan for further studies? When will the repayment of the new loan commence?
Is there a maximum limit on an education loan that a lender can disburse?
What is the tenure of an education loan?
Who can avail an education loan?