Education loans are a type of financial aid provided to students—to meet all their study-related expenditures.
The ever-rising education costs should not discourage students from fulfilling their academic aspirations. Students who don’t want to seek monetary assistance from their families to finance their education typically opt for education loans. Many choose to independently bear the expenses of their higher education through student loans that cover expenses associated with higher education for studying abroad or in India.
One can apply for education loans using funding, financing, scholarships, and rewards—and it is accorded in cash—which should be repaid to the bank with a rate of interest. Let us now discuss six forms of education loans available to students in India.
Students who aspire to pursue an educational course from top-grade Indian educational institutions can seek monetary aid by applying for a domestic education loan. If you want the bank to grant your request—first, you have to enroll in a university or college that the lender acknowledges. Therefore, the first step should involve contacting your education loan provider to discuss if they can grant a loan for your preferred university or course.
Study abroad loans are specifically designed to allow students to fulfill their goal of studying in a reputed university or institution in a foreign country. To secure this overseas education loan, you have to first enroll yourself in an institute or course that the lending bank acknowledges.
After completing your secondary education—if you aspire to opt for an undergraduate degree— you can seek financial assistance from banks that grant undergraduate education loans. Upon completion, undergraduate courses typically help students seek various job opportunities—apart from creating opportunities for further studies. These courses may span three to four years, and many banks in India can grant you a loan for the same.
After graduation, many students opt for a professional course or a postgraduate course or degree instead of applying for a job or sometimes alongside a job. If you are eager to pursue a professional course (like a PhD or Executive MBA)—either abroad or in India—to enhance your career prospects, you may apply for a post-graduate or professional educational loan.
You may already be familiar with the concept of receiving a loan by submitting an asset as security to the lender. The same concept applies when applying for a collateral-based education loan.
One can acquire an education loan by maintaining collateral. Collateral-based loans get approved easily because they are more secure. The lenders receive an asset (security) against the borrowings—which makes the deal a lot safer. In India, you may opt for collateral education loans against securities, and deposits, or opt for third-party guarantee loans.
This form of loan is available to parents who need monetary aid to support their child's education. This form of education loan in India can be divided into two broad categories: Loans for parents and college parents loans.
The first form of loan allows parents to apply for a loan, to cover their child’s education-related expenses. On the other hand, college parents loans are a form of joint loan that is granted to students and their parents. The parents can co-sign the application if their child is working or studying somewhere else.
Education loans help every aspiring student to fulfill their dream of studying or pursuing a professional course within or outside the country.
