Education Loan for MCom: Eligibility and Benefits
The cost of pursuing a Master of Commerce (MCom) can be substantial. If you're considering an education loan for MCom, this blog is for you. We've detailed everything from the types of loans available to the application steps, aiming to make your financial planning for higher education straightforward and stress-free.
Overview of Education Loan for MCom in India
When considering education loans for pursuing a Master of Commerce (MCom) in India, it's essential to understand various parameters that define the loan structure. Below is an overview of key parameters associated with education loans:
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Parameter
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Details
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Loan Amount
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It ranges from ₹1 lakh to ₹10 lakhs, depending on the institution and the lender's policies.
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Expenses Covered
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Tuition fees, examination fees, library and lab fees, insurance, cost of books, hostel charges, and other essential academic expenses.
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Moratorium Period
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Generally includes the course duration plus an additional 6-12 months after course completion before repayment starts.
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Co-applicant
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A co-applicant which can be a parent, guardian, or spouse is required , to strengthen the loan application and ensure repayment security.
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Interest Rates
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Education loan for MCom interest rate vary by lender but generally range from approximately 8.55% to 13.70% depending on the bank and loan amount.
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Repayment Tenure
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Typically, up to 10-15 years post the moratorium period, providing ample time for the student to start working and manage repayments effectively.
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Processing Fees
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Varies from bank to bank; some offer zero processing fees for education loans up to a certain amount, while others may charge a nominal fee that ranges from 0% to 2% of the loan amount.
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Repayment Duration
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The actual repayment starts after the moratorium period, extending up to 10-15 years, allowing for manageable monthly instalments.
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Students pursuing postgraduate studies can explore education loan options for MCom students in India to understand available schemes and eligibility before applying.
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List of Banks Giving Education Loan for MCom
Here is a comparison of public and private banks that will provide an education loan for MCom courses in India:
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Feature
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HDFC Bank
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Canara Bank
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Bank of India
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Punjab National Bank
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Union Bank of India
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Propelld
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Applicable Rate of Interest
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8.64% p.a. to 9.50% p.a.
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9.25% p.a.
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9.35% p.a. onwards
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8.20% p.a. to 11.90% p.a.
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8.10% p.a. to 9.25% p.a.
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12% onwards
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Max Loan with Collateral
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Up to Rs.10 lakh
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Up to Rs.1 crore
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Up to Rs.20 lakh
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Up to Rs.40 lakh
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Up to Rs.150 lakh
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Up to 2 Crores with collateral
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Max Loan without Collateral
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Up to Rs.7.5 lakh
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Up to Rs.40 lakh
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Up to Rs.7.5 lakh
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Up to Rs.7.5 lakh
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Up to Rs.7.5 lakh
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50 Lacs
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Processing Fee
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Rs.1,000 - 1% of loan amount
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0.50% of the loan amount, up to Rs.20,000
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Up to Rs.3,000 for studies abroad
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Nil for studies in India, up to Rs.10,000 abroad
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No charges for up to Rs.7.50 lakh, 1% above
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1-3% of the loan amount
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Repayment Period
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Up to 15 years
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Up to 15 years, excluding the moratorium period
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Up to 15 years, excluding moratorium period
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Up to 15 years
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Up to 15 years after the course and moratorium period
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15 Years
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Margin
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Nil up to Rs.4 lakh, 5% above
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5% for studies in India, 15% for studies abroad
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Nil for up to Rs.4 lakh, 5% above
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Scholarship or assistantship considered
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Nil up to Rs.4 lakh, 5% for studies in India
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1st year- 20% Margin
Other years- Nil
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Loan Security
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No collateral up to Rs.7.5 lakh, collateral above
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Depends on the loan amount
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Parental co-obligation or tangible collateral
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Parental co-obligation or tangible collateral
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No security required up to Rs.4 lakh
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Collateral is not required.
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Note: The above interest rates and particulars are subject to change and may vary based on the bank's policies at the time of application. Always check with the bank for the most current information.
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Eligibility Requirements for an Education Loan for MCom
Here are the eligibility criteria specifically for obtaining an education loan for pursuing a Master of Commerce (MCom):
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Eligibility Criteria
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Description
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Age
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Applicants must be at least 16 years old. However, most lenders prefer applicants between 18 and 35 years.
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Citizenship
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The applicant must be an Indian citizen.
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Admission Confirmation
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The applicant must have secured admission to a recognised university or institution, either in India or abroad. Proof of admission is mandatory.
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Co-applicant Requirement
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A co-applicant (usually a parent or guardian) is typically required, especially for loans above ₹4 lakhs. The co-applicant must have a stable source of income.
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Family Income
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Families with an annual income of up to ₹4.5 lakhs may qualify for interest subsidies under the Central Sector Interest Subsidy Scheme (CSIS).
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Academic Record
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A strong academic background can facilitate quicker loan approval, although it is not always mandatory.
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Course Eligibility
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The MCom programme must be from an institution that is accredited by relevant authorities such as UGC or AICTE.
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Collateral
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For higher loan amounts, banks might require collateral, such as property or fixed deposits. For loans under a certain limit (commonly up to ₹7.5 lakhs), the requirement for collateral may be waived under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL).
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Check your eligibility, compare interest rates, and apply effortlessly for an education loan today.
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Documents Required for an Education Loan For MCom
The documentation required for securing an education loan for an MCom program typically includes a variety of personal and academic records to establish identity, academic eligibility, and financial stability. Here’s a detailed list based on general requirements by Indian banks for educational loans:
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Documentation Type
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Details
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Proof of Identity
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Any government-issued identity card such as an Aadhaar card, PAN card, Passport, or Voter ID.
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Proof of Residence
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Recent utility bills, Aadhaar Card, Passport, or Bank statements showing the address.
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Academic Records
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- Mark sheets and passing certificates from 10th standard onwards.
- Bachelor's degree certificates and mark sheets.
- Entrance exam results, if applicable (such as CAT, MAT, etc., for MCom entrance).
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Proof of Admission
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- An Admission letter from the educational institution confirming the applicant's admission to the MCom program.
- The Fee schedule is provided by the institution.
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Income Proof
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Salary slips, income tax returns, or income certificates of the co-applicant or guarantor.
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Bank Statements
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Recent bank statements (last 6 months) of the student and/or co-applicant.
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Passport-size Photographs
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Photographs of the applicant and the co-applicant.
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Scholarship Documents (if applicable)
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Any documents attesting to scholarships or financial aid received.
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Collateral Documents (if applicable)
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- Documents related to the property or any other asset being pledged as collateral.
- Valuation certificate if required by the bank.
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Collateral Security Documents (if applicable)
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In the case of secured loans, documents pertaining to the collateral offered, such as land or property deeds, fixed deposit receipts, etc.
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Guarantor Form (if applicable)
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Some banks might require the person acting as the guarantor for the loan to fill out a guarantor form
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Applicants must ensure they have all documents required for MCom education loan such as admission proof, income certificate, academic records, and ID proofs ready before applying.
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Top Colleges for MCom in India with NIRF Ranking
The National Institutional Ranking Framework (NIRF) evaluates and ranks Indian colleges annually based on a comprehensive set of criteria, including faculty quality, infrastructure, and placement records. The fluctuating rankings reflect each institution's annual performance. The following table summarises the rankings of premier MCom colleges in India from 2021 to 2023, showcasing their academic excellence and consistency over time.
Check out the list of banks offering the lowest interest rates on education loans in 2024 here.
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Step-by-Step Application Process for an Education Loan
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Step
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Description
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Research and Compare Options
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Research various banks and financial institutions offering education loans for MCom, focusing on interest rates, loan amounts, and repayment terms.
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Check Eligibility Criteria
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Verify that you meet the bank’s eligibility requirements, including age, nationality, and enrollment in a recognised MCom programme.
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Calculate Loan Requirements
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Calculate the total loan amount needed, covering tuition, living expenses, and other costs.
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Prepare Documentation
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Gather necessary documents like ID proof, residence proof, academic records, admission letter, co-applicant info, and income proof.
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Submit Application
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You can apply online through the bank’s website if available or visit a branch to submit your application.
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Loan Processing & Verification
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Bank reviews documents and assesses eligibility. You may be contacted for clarifications or more documents.
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Sanction and Disbursement
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Upon approval, the loan is sanctioned and disbursed, often directly to the educational institution.
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Post-Approval Requirements
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Sign the loan agreement outlining the repayment schedule, interest terms, and other conditions.
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Additional Tips for Choosing the Best Loan Option
1. Look for Government Subsidies or Interest Waivers
Some banks offer government-backed interest subsidies or lower rates for economically disadvantaged students. Check if you qualify.
2. Compare Moratorium Periods
Some banks offer a longer grace period after graduation before repayment starts, easing financial pressure as you begin your career.
3. Consider Loan Repayment Flexibility
Choose a bank with flexible repayment plans or options for part-payments without penalties, which will be helpful in case your financial situation changes.
4. Check for Tax Benefits
Education loan interest payments often qualify for tax deductions under Section 80E in India. When comparing loan options, factor this benefit into your cost-benefit analysis.
5. Explore Specialised Education Financing Providers
Platforms like Propelld provide unique loan options designed around students' needs. They often offer lower interest rates and customised repayment terms based on career goals and institution reputation.
An MCom degree can open doors to a range of career opportunities, and an education loan can make it possible to start without financial hurdles. Take advantage of flexible financing options, low interest rates, and support from top banks. Get started on your MCom journey with the backing you need to succeed.
Why Choose Propelld for an Education Loan for MCom?
Propelld covers 100% of your educational expenses. Unlike complex bank application processes, you can apply simply and straightforwardly.
Here are some more benefits of applying for a loan through propelld Education Loan:
| Particulars |
Details |
| Max Loan Amount |
50 Lakhs |
| Collateral |
Not Required |
| Moratorium |
Available |
| Processing Time |
10 Times Faster than Banks |
| Disbursal Time |
7 Days |
| Approval Rate |
Higher than Other Banks |
| Special USP |
Marks Based Approval |
| % Financed |
100% of Fees |
Apply for a Propelld Education Loan today!
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