Education Loan for MA Students: Eligibility Criteria and Banking Option

Education Loan for MA Students: Eligibility Criteria and Banking Option

A Master of Arts is a two-year postgraduate degree that allows students to specialise in various fields and enhance their careers. Graduates can find opportunities in Media and Communication, Social Services, Government and public policy, etc. An education loan for an MA course helps students cover the costs of their studies, such as tuition, books, and living expenses if studying abroad.

Learn the eligibility requirements, documents, and the banks that provide education loans for MA, along with their interest rates.

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Education Loan for MA: Highlights

Here are the common features of an education loan for MA:

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Education Loan for MA Interest Rates

Here are some of the top banks offering education loan for MA degrees, along with their interest rates and processing fees:

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Calculate the EMI using the Education Loan EMI Calculator to estimate their EMI based on their college fees and the interest rate of the bank's education loan. 

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Education Loan for MA: Loan Repayment

An education loan repayment starts 12 months after finishing the course or 6 months after getting a job. Once the repayment period starts, you can repay the loan amount through:

1. Internet Banking

Pay the EMIs online through the bank’s website or app from where you took an education loan for the MA course.

2. Cheque

Drop off a cheque at the bank. 

3. Direct Debit

Make automatic payments from your bank account on the due date.

4. Demand Draft

Make payment using a demand draft issued by the bank.

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Essential Terms for Loan Repayment

1. Moratorium Period

You can start repaying the loan 12 months after you finish the course or when you get a job. There is no need to make any payments during this period, though interest may still build up.

2. Part-payment of the Loan

Reduce the loan amount by making partial payments or paying a lump sum to reduce the overall repayment period and the interest.

3. Pre-payment of the Loan

You can do so if you have enough money to pay off the loan early. However, some lenders might charge a fee for early repayment. Check with your lender to confirm any extra costs.

4. Collateral-free Loans

Many education loans don’t require any security or collateral. This means you don’t have to pledge assets, like property, to get the loan, making it easier to access funding for your studies.

5. Flexible Repayment Plans

Some lenders offer flexible repayment options, like gradually increasing EMIs or paying just the interest while you study. This helps make repayment more manageable as you get started in your career.

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Explore the guidelines for Education Loan Repayment Rules in India 2024. This resource provides information on the loan repayment process rules and regulations. 

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Education Loan for MA: Eligibility Criteria

To qualify for an education loan for MA, students must meet the following eligibility criteria set by a bank or financial institution.

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Documents Required for Education Loan for MA

When applying for an education loan for MA, students must submit the following documents to provide their identity, residence, and academic record. Below is the list of documents required:

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How to Apply for an Education Loan for MA?

Below are the steps to apply for an education loan in India:

STEP 1: Choose a Bank

Various banks provide education loan schemes, including those with low interest rates. Some popular banks are SBI, HDFC Banks, and ICICI Bank.

STEP 2: Check Eligibility Criteria

Each bank has specific eligibility criteria based on which education loan is provided. You must ensure these criteria before applying.

STEP 3: Required Documents

Provide all the necessary documents required to process the education loan.

STEP 4: Fill the Application Form

Complete the application form with the details. 

STEP 5: Submit the Application

Submit the completed form along with the required documents. The bank will process your application and may call you for verification.

STEP 6: Loan Approval

After loan approval, the bank will disburse the loan amount directly to the college or university according to their fee structure.

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Factors to Consider Before Applying for an Education Loan for MA

Before applying for an education loan for MA degree, it is important to consider the factors that will make the approval process easy. Here are some of the key factors:

1. Admission Letter

Ensure you have a valid admission letter from a recognized university/college.

2. Good Credit score

A strong credit score (above 700) will increase the chance of getting a secured loan. 

3. Age of applicant

The student must be 18 years to 35 years old.

4. Application form

Complete the application form accurately, providing all the necessary information and documents to avoid processing delays.

5. Select Recognized college

Choose a recognized college or university, as banks prefer to provide loans for established institutions only.

6. Appropriate visa for studies abroad

If you plan to study abroad, ensure you have the appropriate student visa.

7. Choose lender carefully

Research and compare different banks to find the best loan options, considering their reputation, loan limit, and repayment options.

8. Interest rate

Choose the bank that provides loans at low interest rates, as this may affect the repayment amount over time.

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Benefits of Education Loan for MA

Opting for an education loan will reduce the pressure on family savings and avoid using investments like fixed deposits or mutual funds. Additionally, the interest on education loans qualifies for a tax deduction under Section 80E of the Income Tax Act 1961.

Here are some of the benefits of taking education loan for MA:

1. Flexible Repayment

Candidates don’t have to start paying EMIs immediately. Repayments begin after completing the course, which gives them time to plan and manage their finances effectively.

2. Covers Multiple Expenses

Education loans cover tuition fees, living costs, travel, study materials, and even laptops, reducing financial strain.

3. Flexible Repayment Terms

Banks offer reasonable interest rates on education loans, especially for top-ranked institutes. Flexible terms for collateral and co-borrowers make repayment smoother.

4. Develop Financial Independence

Taking an education loan gives students the chance to finance their own education, helping them build a strong credit history, which will be beneficial for future loans.

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Getting a Master of Arts degree is a valuable step for your future; education loans can help cover the costs. By knowing the eligibility criteria and required documents and comparing loan options from different banks, you can make intelligent choices and find the proper financial support for your studies. 

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Why Propelld?

The following are the primary benefits of Propelld.

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FAQ for Education Loan for MA 

Can I get an education loan to study at a foreign university? 

Yes, you can. However, the lender may require additional documentation, such as a visa, admission letter, and proof of funds to cover living expenses.

Are there any specific government-sponsored schemes for education loans for foreign studies? 

Yes, there are government-sponsored schemes like the Education Loan Scheme (ELS), which provides financial assistance to students pursuing higher education abroad.

What are the repayment options available for an education loan? 

Education loan repayment options may include monthly, quarterly, or yearly instalments. You can choose the repayment option that best suits your budget and repayment capacity.

What is the moratorium period for an education loan? 

The moratorium period is a grace period during which the borrower is not required to make any principal repayments on the education loan. This period is typically 6 months to 1 year after completing the course.

What are government-sponsored education loans? 

Government agencies or institutions provide government-sponsored education loans at subsidised interest rates or with other benefits.

How can I apply for a government-sponsored education loan? 

You can apply for a government-sponsored education loan through the designated government agency or institution. The application process typically involves submitting documents and attending an interview.

What is the maximum loan amount that can be obtained for MA? 

The maximum loan amount that can be obtained for MA varies depending on the lender and the course fees. However, it's generally sufficient to cover the tuition fees, accommodation, and living expenses.

Can I extend my education loan for MA?

Students can contact the bank with an education loan extension letter to extend the loan. The approval depends upon the eligibility and other loan extension conditions.

Who is not eligible for an education loan for MA?

A score of 700 or higher is the benchmark for securing an education loan. If the score is below 700, you may face education loan rejection when applying for the loan.

What is not covered in an education loan?

Education loans do not cover pre-admission costs like study visas, entrance exam fees, and college application fees.

Do education loans cover total fees?

Very few banks cover the entire fee. For example, Axis Bank offers full-fee coverage but at a high interest rate.

What is the period of the education loan?

The Maximum repayment period for the education loan is 15 years (180 months) for students and scholars.

How much time does education loan approval take?

The time required for an education loan depends upon several factors, such as

1. Research - 1 to 2 months
2. Application submission - 1 week
3. Bank processing - 2 - 4 weeks
4. Disbursal of funds - 1 - 2 weeks

Is education loan Tax-Free?

If you are repaying an education loan, the interest paid can be deducted from your total income under Section 80E. However, this deduction applies only to the interest component of the EMI. There is no tax benefit for the principal repayment.

What is the difference between student loans and education loans?

There is no difference between a student loan and an education loan. Both are used for higher studies. Many students have taken student loans to upgrade their skills, diplomas, certifications, or short-duration courses.