8 FAQ on education loansEditorial Team1169|15Last Updated:06:00 pm, June 29, 2012
Students should check exactly what is covered in an education loan...
What is covered in an education loan?
An education loan usually covers: Tuition fees, examination fees, hostel fess and canteen fees.
Some bank loans may also include textbooks, instruments and equipment.
Certain banks include one-way airfare for overseas education loans. This money is given directly to the airlines.
How is the money disbursed?
The loan amount is directly given to the institute, hostel or canteen.
What courses are covered?
All courses must be over 12 months. Loans for college and further studies depend whether the course falls under Professional or Others.
- Professional courses refer to areas such as Engineering, MBA, MBBS, CA etc
- Other courses refer to programs offered by schools, reputed institutes, government bodies and other courses not included in the Professional category
What is the difference between a ‘reputed institute’ and a ‘recognised institute’?
Reputed institutes: This list of institutes changes according to the bank. Check with the bank for details.
Recognised institutes: Colleges, institutes and universities that are recognised by the University Grants Commission or All India Council on Technical Education.
Will I get an education loan if I do not have an outstanding academic record?
It depends on your relationship with the bank. You should be able to get a loan if you have the collateral security required. First class is usually required for General Category but in some situations, may not be compulsory.
Can I get loan ‘payment seats’?
Yes you can get a loan. But there are a limited number of loans for each course. Check with the bank to make sure you meet the eligibility criteria.
Can I get a loan for a part-time, correspondence or online program?
It is difficult to get a loan for these programs as chances of getting a good job and repayment are uncertain. You may be able to get a loan if you have good relationship with the bank. State Bank of India does finance some part-time courses.
What if I don’t finish the course?
Check with the bank before applying. Certain banks may require you to pay back immediately others may allow you some time to either continue your studies or start repayment.
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