Education Loan for PhD: Banks, Eligibility and Collateral
While getting a PhD is an excellent investment in your future, it may also be costly. Fortunately, there are many options for education loans for PhD students in India.
In this article, you can learn more about the education loan for PhD in India and overseas, the education loan for PhD interest rate, and other details such as collateral requirements and popular banks.
Education Loan for PhD in India: Key Highlights
Depending on the lender's terms and the student's financial circumstances, students can get an education loan for PhD in India with or without collateral.
Category
Details
Limit of loan amount
• Up to Rs.40 lakh unsecured • Up to Rs.2 crores secured
Expenses covered by the loan
Academic:
• Examination, Library, or Laboratory fees
• Tuition and Fees payable to the institute
• Living expenses, including hostel fees
• Purchase of books, Equipment, or Uniforms
Additional:
• Overseas Insurance
• Travel expenses
• Purchase of computers or laptops
• Cost of health insurance
Moratorium Period
Duration of the course plus 12 months
Interest rate
• Collateralised: Starts from 8.55% approximately
• Non-Collateralised: Starts from 9.55% approximately
Repayment Duration
15 years, including the moratorium period
Co-applicant
Parents, spouse, siblings, and parent-in-law
Value of collateral
• Liquid security: 1.1 times the requested loan amount
• Immovable property: 1.25 times the requested loan amount
Eligibility for Education Loan for PhD
The standard qualifying requirements for an education loan for PhD from various banks are listed below:
Criteria
Details
Citizenship
Indian
Program
Full-time PhD in a recognised university or institution in India
Age Limit
18 to 35 years
Minimum Qualification
Graduation degree
Overview: Education Loan for PhD Abroad
While pursuing a PhD abroad might provide students with invaluable experiences, it also comes with a hefty price tag. Many students look to education loan for PhD abroad to lessen this load.
Category
Details
Limit of loan amount
• Up to Rs.75 lakh without collateral • Up to Rs.1.5 crores with collateral
Expenses covered by the loan
Academic:
• Course tuition fee
• Cost of books, uniforms, and equipment
• Examination fees
• Library and laboratory charges
• Living expenses, including the accommodation fee
Additional:
• Cost of laptop or computer
• Travel expenses
• Cost of medical insurance premium
• Premium of overseas insurance
Moratorium Period
The total duration of the course plus one year
Interest rate
• Collateralised: Starts from 8.55% approximately
• Non-Collateralised: Starts from 9.55% approximately
Repayment Duration
The moratorium period of 24 months
Co-applicant
Parents, spouse, siblings, and parents-in-law
Repayment Policies
• If the university is included in the prime list, then payment of interest is optional
• If the university is not on the prime list, then simple interest will have to be paid
You can take two types of education loan for PhD. Let’s compare both of them:
Criteria
Secured Education Loan
Unsecured Education Loan
Collateral Requirement
Requires collateral, such as property, fixed deposits, or assets
No collateral required, some banks might require a co-applicant
Loan Amount
Higher loan amount depending on the value of collateral
Typically offers lower loan amounts
Interest Rates
Lower interest rates due to collateral
Higher interest rates due to increased risk
Eligibility
Based on the value of collateral and academic background
Based on credit score, financial standing, and academic background
Loan Approval Time
Longer approval process due to collateral evaluation
Faster approval process
Repayment Tenure
Flexible and longer tenure (up to 15 years or more)
Shorter repayment tenure (usually up to 7 years)
Risk
Lower risk for lenders, as collateral is involved
Higher risk for lenders
Preferred by Lenders
Preferred for high loan amounts (e.g., overseas studies)
Preferred for lower amounts (e.g., domestic education)
Eligibility for Government Schemes
Eligible for interest subsidy schemes (if collateral meets criteria)
May not always qualify for government schemes
Co-Applicant for Education Loan for PhD
If you are taking a collateral-free loan, you will need a co-applicant with the following requirements to take the education loan for PhD in India with you:
Aspect
Details
Loan Type
Without collateral
Co-applicant Requirement
Required
Co-applicant Relationship
Close family member (e.g., parent or spouse)
Co-applicant Credit History
Must be good
Co-applicant Income
Must be stable
Co-applicant Responsibility
Responsible for repaying the loan if the student is unable
Co-applicant Information Required
Personal and financial information, including proof of income
Potential Additional Requirement
Co-applicant may need to provide collateral (e.g., property or investments)
Important Note
The co-applicant is equally responsible for loan repayment and should carefully consider terms and the student’s ability to repay
The education loan for PhD interest rate is lesser for education loans with collateral than for loans without collateral. Here are the assets that can be used as a collateral for taking an education loan:
Aspect
Details
Collateral Requirement
Immovable property:
- Flat
- Non-agricultural land
- House
Documents for Education Loan for PhD Students in India
Here are the documents you will need for applying to an education loan for PhD in India:
Category
Required Documents
Basic Documents
• Education loan form provided by the lender
• Bank account statement for the last six months with co-signer signature
• One year of salary credit (for salaried co-borrower)
• One year of business transactions, self-attested documents, and liability and personal asset statement (for self-employed co-borrower)
• Identification proof (PAN card and passport)
Residential Proof (any one)
• Aadhar Card
• Voter ID
• Passport of the applicant
• Electricity bill
• Telephone bill
• Ration card
• Bank account statement Note: Provide two different address proofs if current and permanent addresses differ
Academic Documents
• Print out the university ranking form
• Scorecard of IELTS, GMAT, or GRE
• Marksheets and certifications (10th, 12th, and degree)
• Fee structure of the course
• Proof of enrollment into the institution or university
Income Documents (Co-applicant)
Salaried:
• Previous two years' ITR
• Salary slips of last three months
• Previous two years' Form 16
• ID card of the employer
Self-employed:
• Last three years' profit and loss account and balance sheet
• Address proof of the business
• Previous three years' ITR
Other Documents
• Letter confirming extra amount coverage by co-applicant
• Advance transaction receipts
• Invoice for expenses (travel, laptop)
• Previous year loan statement (if applicable)
• Letter explaining lack of income tax return (if applicable)
• Letter on Rs. 100 stamp paper explaining gaps in the loan application
Collateral Documents
• Gift Deed, Will, or Registered Sale Agreement
• Property Title deed
• Current electricity bill and newest property tax bill with the same address
• Link documents for 30 years or Past chain of sale deed establishing title or EC
• Previous sale deed (if the property has been owned for more than 30 years)
• Original receipt of registration
• Letter of allotment by authorised government authorities (if applicable)
Education Loan for PhD : Interest Rate & Other Details
The interest rate for education loans for PhDs differs across various lenders. You can expect a minimum interest rate of 8.5% and it can increase till 13.7%, depending on the lender.
Below are the interest rates and other details of Education loan for PhD offered by various banks and NBFCs:
Step 3: Fill in the details of your institute and complete a quick and easy KYC.
Step 4: The loan amount will be disbursed into the account in a TAT that is 10 times faster than banks.
While getting an education loan for PhD is easy and straightforward, most banks have a complicated procedure and long processing times. Get the best education loan for students with Propelld!
Propelld covers 100% of your expenses for any educational course in India. Unlike complex bank application processes offered by other education loan lenders, you can apply simply and straightforwardly. The 100% digital process and unique selection criteria are hassle-free and quick.
Here are some more benefits of applying for a loan through Propelld Education Loan:
Feature
Details
Max Loan Amount
50 Lacs
Collateral
Not Required
Moratorium
Available
Processing Time
10 Times Faster than Banks
Disbursal Time
7 Days
Approval Rate
Higher than Banks
Special USP
Marks Based Approval
% Financed
100% of Fees
Get an Education Loan for PhD from Propelld today!
Who is eligible for an education loan for a PhD in India?
To qualify, you must be an Indian citizen aged 18 or above and have confirmed admission to a recognised institution. A co-borrower, typically a parent or legal guardian, is also required.
What expenses does an education loan for PhD cover?
The loan covers tuition fees, examination and library fees, accommodation, research materials, travel expenses, and sometimes living expenses.
Are education loans for PhD available without collateral?
Yes, unsecured loans are available without the need for collateral, but they generally come with higher interest rates compared to secured loans.
What is the difference between secured and unsecured PhD education loans?
Secured loans require collateral such as property or fixed deposits, offering lower interest rates, while unsecured loans don’t require any assets but have higher interest rates.
Can I apply for a PhD education loan if I am studying abroad?
Yes, loans are available for PhD studies abroad, with some banks offering coverage up to ₹1.5 crore.
What documents are required for an education loan for PhD?
Documents include proof of admission, academic certificates, a fee structure, identity proof, and passport-sized photos. The co-borrower must also provide income proof and collateral documents if applicable.
What is the interest rate for a PhD education loan?
Interest rates typically range from 8.5% for secured loans to 10-12% for unsecured loans.
How long is the repayment period for PhD education loans?
Most loans offer a repayment period of up to 12 years, including a moratorium period (course duration plus 12 months.
Can I prepay my PhD education loan?
Yes, many financial institutions allow for prepayment, although some may charge prepayment penalties.
Is there a margin requirement for education loans for PhD?
For loans above ₹4 lakhs, a margin of 5% for studies in India and 15% for studies abroad may apply.
Can I get a tax benefit on the interest paid for my PhD education loan?
Yes, under Section 80E of the Income Tax Act, you can claim a tax deduction on the interest paid on your education loan.
What is the loan approval time for a PhD education loan?
Most banks convey their decision within 15 working days, provided the application is complete.
Can I apply online for a PhD education loan?
Yes, many banks and financial institutions offer the convenience of applying online with electronic submission of documents.
What happens if I miss an EMI payment on my PhD education loan?
Penalties for missed payments vary but typically include a late fee and penal interest of around 2% per month on overdue instalments.
Do I need to start repaying the loan while studying?
Many loans offer a moratorium period where repayment begins after completing the course. Some institutions encourage interest payments during this period to reduce the loan burden.
What is the role of a co-borrower in a PhD education loan?
The co-borrower is equally responsible for loan repayment and must meet income and documentation requirements. The co-borrower’s income is critical for loan approval.
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