Are you an aspiring student looking forward to higher education abroad, or are you a doting parent who wants to provide world-class education to your children? Saving fixed deposits in the bank account and investing in mutual funds also cannot be sufficient to bear the cost of education, which is staggering nowadays.

 You should be familiar with the concept of an education loan because it is the ultimate solution to bridge the gap between the required amount and the shortfall. With the advent of internet banking throughout the financial system, you just need an online bank account for the entire process of application to approval.

Who can apply for the loan?

  • The prime applicant has to be the student planning to pursue any degree or course, parents, spouses, or siblings can be co-applicants, but the one liable to repay the loan is the student only. If the student cannot repay, then the co-applicants will be held responsible for the repayment and repayment can be made easily through the digital bank

What are the prime eligibility criteria for approval of the loan?

  • The chances of approval depend on the credibility of the courses the students want to take and the reputation of the college/university they plan to enroll in. The lending institutions may scrutinize these details on their level to ensure that the applicant acquires a stable job or source of income after completing their course.

What type of courses is applicable for the loan?

  • Banking organizations have a flexible approach to signing off credit amounts to aspiring students who fall short of funds. Almost all the undergraduate, postgraduate, and doctoral programmes are applicable, and some banks also offer loans for vocational and certificate courses such as diplomas, IT, nursing, teaching, etc. The students deprived of bank accounts need to apply for instant account opening before seeking a loan.

Is it a secured loan?

  • An unsecured loan requires no security from the borrower, whereas a secured loan requires a guarantee from the borrower. As for an education loan, the lower slab of the loan doesn’t require any third-party guarantor, and the banks may ask for any form of security for the higher amount. So, if the applicant fails to repay the loan, the banks can still recover the amount.

What is the process of repayment?

  • The repayment period of this type of loan, like any other loan, depends on fundamental factors like the amount borrowed, the EMI, and other terms and conditions. However, the students have the liberty to wait for the repayment till the end of their educational timeline. Some lending institutions provide a few months to let the applicant acquire employment. It depends on the principles and protocols of the lending organizations.

Are there other charges incurred?

  • There are minor costs associated with any lending process, including processing fees, pre-payment charges if you opt for an early closure of the loan, and penalty charges for the late payment of the EMI. These charges may vary depending on the rules and regulations set by the banks.

The application process is simple as most banking institutions require a few valid identification documents, the applicant’s educational certificates, and the co-applicants financial records. These requirements may vary from bank to bank and lower amounts of education loan can be applied through any online bank account opening app.