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How To Get Education Loan After 12th?

How To Get Education Loan After 12th?

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Explore education loan options for students after 12th grade. Learn about eligibility, lenders, and tips to fund your higher studies

GyanDhan
Rohit Gidwani
Updated on:  28 Oct 2024  | Reviewed By:  Aman  | 1.19K | 15  min read

Getting started on your journey to higher education just got easier! Want to know “How to Get a Student Loan After 12th? Look no further. This guide is your key to unlocking the world of student loans, offering a clear path through the financial obstacles that stand between you and your academic dreams. Whether you are looking to join a prestigious university in India or abroad, financial constraints should not hold you back. Here, we bring you essential information and practical tips to help you get the funding you need effortlessly. Ready to change your educational desire into reality without making money a disability.

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What are Education Loans?

An education loan is hope for the lighthouse. These loans cover different education costs so that students can focus on learning without worrying about the financial burden. These loans cover a variety of educational expenses, so students can concentrate on studying without worrying about the economic burden. Educational loans can be used by various banks and financial institutions, and each provides different conditions and advantages to meet the various needs of students. The importance of student loans goes beyond simple financial aid; they are an investment in the future, allowing students to reach their full potential and achieve their academic and career goals.

 

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Types of Education Loans

Education loans can broadly be categorized into two types: secured and unsecured loans. Here’s a comparative overview to help you understand the differences:

Feature Secured Education Loan Unsecured Education Loan

Collateral

Required

Not Required

Interest Rate

Generally lower

Higher than secured loans

Loan Amount

Can be higher, depending on the collateral value

Usually has a cap or limit

Repayment Terms

Flexible, can be extended

Relatively less flexible

Processing Time

May take longer due to the valuation of collateral

Quicker processing time

Secured loans require collateral, such as real estate or a fixed term deposit, and are often offered with lower interest rates and more flexible repayment terms, making them a lower risk option for lenders. Unsecured loans, on the other hand, do not require collateral, but represent a higher risk for lenders, and therefore generally have higher interest rates and stricter repayment terms.

 

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Education Loan Options After 12th

Several education loan providers will help you understand how to avail an education loan after completing class 12. How to secure the funds you need for class 12 and beyond. The main factor that will determine which financial institution you choose is whether you intend to continue your studies in India or abroad. To help you understand better, we have listed some lenders keeping both scenarios in mind.

 

Education Loan for Indian Institutes:

Lender Name Maximum Loan Amount (INR) Interest Rate Range

State Bank of India

Up to 1.5 Crore

8.55% to 11.15%

Punjab National Bank

No upper limit, varies

Up to 12%

ICICI Bank

Up to 1 Crore

9.50% – 15.85%

Axis Bank

Up to 40 Lakh

13.7% - 15.2%

HDFC Bank

Up to 20 Lakh

9.55% - 13.25%

Bank of Baroda

Up to 1.50 Crore

9.15% to 12.50%

Canara Bank

Varies, up to 50 Lakh

9.25% – 11.35%

South Indian Bank

Up to 1.5 Crore

12.90% – 13.65%

 

Education Loan for Abroad Institutes:

Lender Name Maximum Loan Amount (INR) Interest Rate Range

SBI

Up to 1.5 Crore 

10.15% - 10.65% (males)

10.65% - 11.15% (females)

UBI

Up to 1.5 Crore

9.25% - 9.75%

Axis Bank

85% of Collateral 

9.99% - 11.50%

ICICI Bank

Up to 20 Lakh

9.50% - 11.25%

HDFC Credila

Up to 40 Lakhs 

12% - 13%

Avanse

Up to 40 Lakhs 

12% - 13%

MPOWER Financing

Up to 100,000 USD

12.99% - 15.99%

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Eligibility Criteria for Education Loans After 12th

When it comes to availing an education loan, the eligibility criteria can vary from one lender to another. However, there are some common requirements that most banks and financial institutions consider:

 

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    The applicant must be an Indian citizen.
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    Must have secured admission to a recognized university or course, either in India or abroad.
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    The age of the applicant typically falls between 18 to 35 years at the time of application.

 

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Documentations for Education Loan after 12th

To apply for an education loan, the following documents are generally required:

 

Application Documents:

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    Duly filled loan application form
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    Passport-sized photographs
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    Academic records (mark sheets and certificates)
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    Admission letter from the educational institution
 

Co-applicant Documents:

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    Identity proof (Aadhar card, Passport, Voter ID)
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    Residence proof (Utility bills, Passport)
 

Income Documents:

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    Latest salary slips or income tax returns
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    Bank statements of the last 6 months
 

It's important to note that the required documents may vary depending on the lender’s policy and the specifics of the loan.

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Preferred Top Institutions in India for Education Loans

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    Indian Institutes of Technology (IITs): A group of autonomous public technical universities known for their rigorous engineering, technology, and research programs. Education loans for IITs cover tuition, lab fees, and living expenses, acknowledging their pivotal role in shaping future innovators.
 
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    Indian Institutes of Management (IIMs): Premier institutions offering post-graduate, doctoral, and executive education programs in management. Loans for IIMs often include course fees, study materials, and hostel charges, supporting students aiming for leadership roles in business.
 
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    All India Institutes of Medical Sciences (AIIMS): Esteemed public medical colleges that set benchmarks in medical education, research, and patient care in India. Education loans for AIIMS cater to a wide range of expenses, including tuition, equipment, and hostel fees, facilitating the journey of future healthcare professionals.
 
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    National Institutes of Technology (NITs): Centers of excellence in undergraduate and postgraduate engineering and technology education. Education loans for NITs are designed to cover tuition, books, and living costs, making premier engineering education accessible.
 
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    University of Delhi (DU): One of the country's leading universities offering a wide array of undergraduate, postgraduate, and doctoral programs. Education loans for DU students can include tuition fees, living expenses, and other academic costs, supporting diverse academic pursuits in humanities, sciences, and commerce.
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How to Apply for an Education Loan through GyanDhan?

Understanding how to get education loan after 12th is easy with GyanDhan. All you need to do is follow the given steps -

 

 
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    Consult Education Loan Counselor: Get personalized advice by consulting with an education loan counselor.
 
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    Submit Documents: Provide all the necessary documents for processing your application.
 
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    Get Approval and Sign Agreement: Once approved, review and sign the loan agreement.
 
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    Disbursement: The loan amount will be disbursed as per the requirements stated in the admission letter.
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Expenses Covered under Education Loans

Education loans are designed to cover a wide range of expenses to ensure that students can pursue their education without financial hindrances. These typically include:

 

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    Interest rate: The amount of interest you'll pay on top of the principal loan amount.
 
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    Processing fee and time: The cost and duration required to process your loan.
 
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    Margin money: The percentage of the total expense that the bank will not cover.
 
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    Moratorium period: A grace period during which you are not required to make loan payments.
 
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    Tax benefit: Potential tax deductions available on the interest paid on the loan.
 
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    Loan duration: The total time you have to repay the loan.
 
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    Covered expenses: What the loan will cover, such as tuition, living expenses, books, and other academic fees.
 
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    Prepayment terms and conditions: Rules around repaying the loan early, including any penalties or benefits.
 

Careful consideration of these aspects will enable students to make informed decisions that are aligned with their financial and educational goals, laying a solid foundation for future endeavors. Now you have an easy-to-follow guide to understanding how to get an education loan after grade 12 and navigating the world of education loans. From choosing the right lender to understanding the ins and outs of your loan options, we’ve got you covered. Remember, the right financing can put you on the path to academic and career success without the burden of financial worries. If you're ready to take the next step towards securing your education loan, why not start with GyanDhan? Check your eligibility and find the best education loan tailored to your dreams. Let's make your educational journey as rewarding as it should be!

 

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Frequently Asked Questions

Can I apply for an education loan before getting my admission letter?
 

Yes, you can start the loan application process before receiving your admission letter. Many banks offer provisional loan sanction based on your entrance exam scores and the institutions you aim to apply to. However, the final approval and loan disbursement will require the admission letter.

How does my course and institution affect my loan approval?
 

The course and institution you choose significantly impact your loan approval chances and terms. Loans for courses and institutions with high employment rates often have better terms, reflecting the lower risk to the lender.

Can I get an education loan to study part-time or distance learning courses?
 

Yes, some lenders offer education loans for part-time or distance learning courses. However, the availability and terms of such loans can vary widely between lenders, and they may have different criteria compared to full-time courses.

What happens if I fail to complete my course on time?
 

If you fail to complete your course within the scheduled time, you should inform your lender immediately. Many banks provide an extension for the repayment period, but this is subject to the bank's discretion and may vary based on the reason for the delay.

How does co-applicant's credit score affect my education loan?
 

The credit score of the co-applicant plays a crucial role in the approval process of your education loan. A higher credit score can improve the chances of loan approval and may result in more favorable loan terms, including lower interest rates.

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