Finding the right college and figuring out how to finance your education is exciting and tedious at the same time. Thus, getting an education loan makes it easier for aspiring students to pursue academics within India or abroad. Banks and NBFCs offering education loans after 12th can help you get the type of financial assistance you need. Continue reading this blog as it provides a roadmap and the process of getting an education loan after 12th grade.
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Overview of Education Loan After 12th
Getting an education loan after the 12th is super easy and hassle-free. Many banks and NBFCs in India offer secured and unsecured loans. While you can get need-based financing with secured loans, unsecured loans can be availed up to INR 1.5 crores at competitive interest rates starting from 10.25% p.a.
Some of the top banks are the State Bank of India, Bank of Baroda, ICICI Bank, HDFC Bank, and Central Bank of India. Various education loan schemes offer a quick and safe online application process. You can apply easily via the bank’s official website or Vidya Lakshmi Portal. To know the complete process of applying for an education loan after 12th, read further.
How to Get Education Loan After 12th?
How to get an education loan after 12th is one of the frequently asked questions. To answer this, students must calculate the total cost of studying. Now, thoroughly research the types of loans available, and eligibility requirements, and compare costs. You must gather the necessary academic, financial, and identity documents. The final step is to apply for the loans. Let’s see how you can get an education loan after 12th-
Do Your Research
Rigorous research is important. First of all, understand which country, city, and college you plan to study in and then ascertain the overall costs of studying in that area. For example, the average cost of living in Canada is around CAD 18,340 (INR 11,14,258) but comes with additional hidden costs of living in Canada.
Types of Loans
Once you have identified the total expenses required in one year, explore the loan options available. This step is more about identifying the type of loan you require- secured or unsecured loans from private, and public banks or loans specifically offered by your chosen university.
Government loans typically have lower interest rates but might have stricter eligibility criteria. Private banks might offer more flexible terms but may have higher interest rates.
Also Read: Read out this blog to know which is better- education loans from private banks or public banks?
Eligibility Requirements
The basic eligibility criteria for education loans remain the same. You must be an Indian citizen and secure admission to the university through entrance or merit basis. However, each bank might have varying interest rates, repayment tenure, and eligibility criteria.
In this step, you must understand what factors lenders consider when approving loans. Based on your eligibility such as academic qualifications and record, chosen course, future earning potential after graduation, or co-signer, the amount of the loan is determined.
Compare Costs
Don’t just focus on the loan amount– compare interest rates, processing fees, and repayment terms offered by different lenders. You can compare education loan interest rates of different banks and NBFCs and see what suits your financial conditions and needs.
Higher loan amounts, longer repayment periods, and unsecured education loans usually have higher interest rates. To avoid this, make sure to opt for secured loans like education loans against fixed deposits, property, mutual funds, or gold.
Gather Your Documents
An education loan is provided if you prove your identity, academic qualifications, and financial conditions to the lender. Banks verify these documents on submission. Once they are verified successfully, the banks issue an education loan sanction letter, promising the applicant to fund their higher education.
Here’s the list of documents you need to attach along with the duly filled education loan application form from the bank-
- KYC Documents for Identity Verification- These include documents like an Aadhaar Card and PAN Card.
- Academic Documents- Mark sheets, certificates, and entrance exam results (if applicable) will be required as proof of your academic standing.
- Financial Documents- Your income tax returns (or your parent’s/guardian’s) and bank statements might be required to assess your financial situation.
- Admission Proof- An acceptance letter or enrollment confirmation from your chosen college is crucial.
Also Read: Check out the given link on documents required for education loans to understand the checklist in detail.
Applying for the Loan
This is a crucial step as you are almost on the verge of getting an education loan after the 12th. This step involves preparing the list of shortlisted banks- government banks, private banks, and NBFCs. Check out the given pointers to keep in mind before applying for an education loan-
Government vs Private Banks
Many public sector bank education loans are offered up to INR 1.5 crores to study abroad at competitive interest rates with banks like SBI, Band of India, and Karur Vysya Bank.
Many private banks like HDFC and ICICI and NBFCs (Non-Banking Financial Companies) like Auxilo, Prodigy Finance, and MPower Financing provide need-based financing without an upper limit on the loan amount. They offer convenient services, flexible terms and conditions, and hassle-free loan disbursement which is completely online.
How to Apply?
Once you are through with the above steps, the next step is to understand how to apply for an education loan after 12th. Applying for education loans is easy. Many banks allow online applications, while some might require you to visit a branch in person.
You may visit the nearest bank branch and carry the list of documents discussed above. While this may require you to stand in a queue, it does offer the convenience of clarifying doubts immediately and proceeding with the education loan application.
The alternative is to apply for loans online through their official website. One can also apply for education loans via Vidya Lakshmi Portal. The process is straightforward and quick. You simply need to register yourself on the portal and proceed by filling out the application form online. You are also required to upload the necessary documents online.
Make sure to be careful while filling out the loan application form and provide all the details accurately to avoid education loan processing.
Also Read: Know all about the IBA Model Education Loan Scheme and learn about the eligibility criteria, documents required, maximum loan amount, interest rates and much more.
Evaluate and Finalize
Once you have offers from different lenders, review the loan offers very carefully. Compare the interest rates, repayment terms, and any hidden fees to choose the most suitable option for you.
Also, depending on your creditworthiness or chosen bank, you might have some room to negotiate interest rates or fees.
For better services and best financial assistance, you can connect with Fly.Finance to apply for education loans. Our dedicated loan expert will help you figure out the best lender and negotiate on your behalf, ensuring that you receive the lowest interest rate and the most favourable terms for your education loans. The best part is you get this at zero fees.
Benefits of Education Loan
An education loan can be a game-changer for students aspiring to pursue higher studies. It provides you with the necessary financial assistance by covering tuition fees, living expenses, and other educational costs, allowing you to focus on your studies.
- Flexible Repayment: Most loans offer a moratorium period, allowing you to start repaying after completing your course or finding a job.
- Career Boost: A higher education often leads to better job prospects and higher earning potential, making loan repayment easier.
- Tax Benefits: Interest paid on education loans is often eligible for tax deductions.
- Build Credit History: Responsible repayment of an education loan can help establish a good credit score.
Top Banks for Education Loans After 12th
Several leading banks in India offer competitive education loan schemes like the SBI Global Ed-vantage to study abroad and the Central Bank of India’s Cent Vidyarthi loan scheme. Besides, other top banks include Punjab National Bank, Bank of Baroda, Axis Bank, HDFC Bank, ICICI Bank, etc. These institutions provide a range of benefits, including flexible repayment terms, competitive interest rates, and streamlined application processes.
- Cosmos Bank Education Loan to Study Abroad
- Central Bank Education Loan to Study Abroad
- IOB Education Loan to Study Abroad
- HSBC Education Loan to Study Abroad
- Bank of Baroda Education Loan to Study Abroad
- ICICI Bank Education Loan to Study Abroad
- HDFC Bank Education Loan
- IDFC Bank Education Loan
- IDBI Education Loan to Study Abroad
- Union Bank of India Education Loan to Study Abroad
This was all about how to get an education loan after 12th. Always remember that education loans are a long-term commitment, so borrow responsibly and only what you need. Always plan your repayment strategy and explore scholarship opportunities that can significantly reduce your loan burden.
To know more about education loans, the best bank accounts for students, forex cards, and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.
FAQs
Yes, students who have completed or are about to complete their 12th grade can apply for education loans to pursue higher education in India or abroad.
To be eligible, you must be an Indian citizen and secure admission to a recognised university through entrance or merit-based selection. Each bank may have varying criteria, such as academic record and co-signer requirements.
You can consider government loans, private bank loans, or loans offered by your chosen university. Each type has different eligibility, terms, and interest rates.
Yes, many banks offer 100% education loans covering tuition fees, accommodation, travel expenses, and more. Some NBFCs like Avanse, MPower, Prodigy etc also offer 100% coverage on education loans.
Education loans offer flexible repayment options, allowing you to start repaying after completing your course or securing a job, making it easier for students during their studies.
You can apply through the bank’s website, Vidya Lakshmi Portal, or visit a branch. You’ll need to submit documents like identity proof, academic records, and admission confirmation.
Documents required include KYC (Aadhaar, PAN card), academic qualifications (mark sheets, certificates), financial documents (income tax returns, bank statements), and admission proof (acceptance letter).
Secured loans require collateral, like property or fixed deposits, while unsecured loans do not. Unsecured loans generally have higher interest rates as they are considered riskier.
Interest rates on education loans start from around 10.25% per annum. Rates vary based on whether the loan is secured or unsecured and the lending institution.
Some of the major banks for education loans in India are the State Bank of India (SBI), ICICI Bank, HDFC Bank, Bank of Baroda, and Central Bank of India. All these banks offer various loan schemes for higher studies.
Yes, depending on your creditworthiness and the bank, you may be able to negotiate the interest rates and other terms.
The loan amount depends on the type of loan. Secured loans may offer higher amounts, while unsecured loans typically cover up to INR 1.5 crores for studying abroad.
Yes, interest paid on education loans is eligible for tax deductions under Section 80E of the Income Tax Act.
The loan processing time depends on the bank and your documentation. Online applications are generally quicker, while in-branch applications may take longer.
Yes, you can apply for an education loan through the Vidya Lakshmi Portal, which allows a streamlined application process with multiple lenders.
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