Education Loan in Tamil Nadu For Students
Tamil Nadu has long been a leader in education, with a 100% Gross Enrollment Ratio (GER) in primary and secondary schooling. To support students pursuing higher education amid rising college costs, the state offers various education loan options. These loans cover tuition, accommodation, and related expenses.
Eligible students can access loans through state-backed schemes and banks, provided they meet specific criteria and submit the required documents. If you're planning to study further, understanding the loan process and requirements in Tamil Nadu is essential. Here, we’ll guide you through how to apply for an education loan, along with the eligibility criteria and necessary documents.
Top Education Loan Providers in Tamil Nadu- Best Banks and NBFCs
If you are a student from Tamil Nadu, you must first know which bank is best for education loan in Tamil Nadu. 8.98% of the total education loans disbursed by the public sector of India were for the students of Tamil Nadu in the financial year 2023-24. This is why the government of Tamil Nadu is highly considerate about providing education loans to its students. Private banks have also joined the race and together account for huge education loan disbursals. Here are some of the best banks for education loan in Tamil Nadu you must know:
For Studying in India
For Foreign studies
When exploring top education loan providers in Tamil Nadu, it's essential to consider Axis Bank education loan features and benefits, as they offer competitive interest rates, flexible repayment options, and coverage for both domestic and international studies.
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Education Loan Interest Rates to Students in Tamil Nadu
The interest rates on education loans in Tamil Nadu vary from 9% to 14%, contingent upon the loan type and the lending institution.
Studies in India
Studies Abroad
When considering studies abroad, it's essential to explore education loan options for studying in Canada, as they provide comprehensive coverage of tuition fees, living expenses, and other associated costs, along with competitive interest rates and flexible repayment terms.
What is Margin Money in Education Loans?
Margin money in education loans refers to the portion of expenses students must fund themselves, with the rest covered by the bank. For instance, with a 10% margin on a ₹10 lakh education cost, the student contributes ₹1 lakh, and the bank provides ₹9 lakhs.
The margin percentage typically ranges from 5%–15% for studies in India and 10%–20% for studies abroad. However, some private banks and NBFCs offer up to 100% financing, eliminating the need for margin money altogether.
Understanding education loan for MBA interest rates is important for planning your finances effectively. Interest rates may vary based on the bank, institute, and whether the program is in India or abroad, with some banks offering special rates for premier institutions.
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Expenses Covered Under Education Loan
Most lenders cover the following expenses in the education loan:
- Tuition fees for college/university
- Examination fee
- Lab/library fee
- Books, uniform, equipment fee
- Computer/laptop fee
- Travel expenses
Education Loan Eligibility in Tamilnadu
Before you apply for an education loan, the emphasis on eligibility criteria can not be neglected. Let us have a look at education loan eligibility in Tamil Nadu:
- You should be a resident of India.
- You should have a co-borrower who will take the responsibility for your liability. It can be your immediate family member like parents or siblings.
- You have received the admission letter from the institute you applied for.
- If you are not sure about college but decided to move ahead with higher studies, then you can get the loan based on scorecards of competitive exams like GRE, GMAT, TOEFL or IELTS.
Documents Necessary to Avail Education Loan in Tamil Nadu
The education loan process requires a set of documents to properly authenticate your identity and other information. Whether it's a secured loan or an unsecured one, each process is different and requires different documents. We understand that arranging documents is quite overwhelming. So, we have compiled all the necessary documents according to the types of loans and entities for an easy loan process.
For Unsecured Loans
Student Document
- The application form must be attested with your two passport-size photographs, signature, and information from the financial officer.
- Identification documents such as adhaar card, passport, and PAN card
- Admission letter from the college/university
- Electricity bills or house tax bill
- 10th, 12th, degree/diploma mark sheet
- Gap certificate, if applicable
- Work experience certificate
- Scores from competitive exams
Co-Applicant Documents
- For salaried individuals: Bank statements of the last six months, salary slips of the last 3 months, the company ID, Form 16 of the last 2 years, and the previous 2 years of ITRs.
- For self-employed individuals: ITRs of the previous 3 years, last 6 months of bank statements, balance sheet, last 3 years of P/L account, and address proof of business.
Other Documents
- Authenticated letter citing that co-applicant is responsible for any lapse in loan repayment.
- Standard bank statement manifested with student and co-applicant
- Expenses invoices such as laptop and travel if the loan promises to cover those expenses
- Receipts for advance transactions.
- Loan statements from previous years
- Gap certificate, if applicable, on ₹100 stamp paper
- Letter explaining lack of co-applicants ITR
For Secured Loans
- The income certificate of the co-applicant
- Ownership document property
- Gift deed, registered sale agreement, or will that proves property ownership
- Original receipt of ownership
- An allotment letter from the government, like CMDA approvals for Chennai and Manai Patta with DTCP from Coimbatore, Madurai, and Salem.
- A photocopy of a building/plot layout approved by the municipality
- Latest property bill and electricity bill
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How to Apply for an Education Loan in Tamil Nadu?
Pursuing higher education in Tamil Nadu often requires significant financial investment, and education loans are a popular way to bridge this gap. Here’s a step-by-step guide with added details to help you apply for an education loan in Tamil Nadu:
1. Check your eligibility as discussed
2. Compare the lenders, their interest rates and other factors, choose the one that suits your requirements.
3. Collect documents as required.
4. Submit your application online or offline.
5. After processing, if everything is in order, bank disburses the loan amount directly to your institute.
Applying for an education loan in Tamil Nadu is a structured process, and careful preparation will help you secure funding smoothly and pursue your academic goals with confidence.
When considering how to apply for an education loan in Tamil Nadu, it's beneficial to explore the IDFC FIRST Bank education loan application process, which offers a streamlined online application, competitive interest rates, and flexible repayment options tailored to students' needs.
What Collaterals Can Be Accepted for Education Loans in Tamil Nadu ?
The following are the types of collateral that can be accepted for education loans in Tamil Nadu:
- The title deed or patta(a type of document that grants ownership of the land) is a mandatory document.
- Commercial properties accepted by private lenders
- Agriculture lands
- Fixed Deposit (FD), Insurance policies, and government bonds
It comprises both private and government education loan details in Tamil Nadu.
Education loan by Government in Tamilnadu
In Tamil Nadu, the government supports education through state schemes and partnerships with banks, including targeted support for minority communities via TAMCO. Banks like SBI, TMB, and others provide loans with rates from 9% to 14%, often requiring no collateral for loans up to ₹4 lakhs.
Go through a quick comparison of schemes, loan amounts, collateral needs, subsidies, and eligibility.
Education Loan for MBBS in Tamilnadu
Students can avail of education loans for MBBS easily in Tamil Nadu. This allows students to opt for a program of their choice and choose to apply for an education loan without any restrictions. Some of the most popular MBBS colleges in Tamilnadu are Madras Medical College in Chennai, Christian Medical College in Vellore, Coimbatore Medical College in Coimbatore, Stanley Medical College in Chennai, and Tirunelveli Medical College in Tirunelveli.
Up to INR 10 lakh can be borrowed for MBBS in India, while up to INR 40 lakh can be borrowed for study overseas. The majority of NBFCs offer loans with no maximum but do demand collateral.
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Education Loan for Engineering Students in Tamil Nadu
Engineering students in Tamil Nadu can access education loan for engineering from various lenders like banks and NBFCs. These loans typically cover tuition, hostel, books, and related expenses, with interest rates ranging from 9% to 14% in public banks and up to 17% in private institutions.
Loan amounts usually go up to ₹10 lakhs for domestic studies, with higher limits for international education. Repayment terms span 5–7 years, starting after a moratorium covering the course plus 6–12 months. Applications are simplified through the Vidya Lakshmi portal for easy access.
Education Loan for Arts and Science in Tamil Nadu
Students in Tamil Nadu pursuing Arts and Science courses can access education loans from banks and NBFCs with interest rates typically ranging from 8% to 12%. These loans cover tuition, hostel fees, books, and other academic expenses, and are further supported by state initiatives such as education loan camps to ease access.
Eligibility requires Indian citizenship, admission to a recognized course through merit or entrance exams, and a co-applicant—usually a parent or guardian. Loans up to ₹10 lakhs are available for domestic studies, with repayment periods extending up to 15 years. Tax benefits under Section 80-E of the Income Tax Act also apply.
Benefits and Features of Education Loans in Tamil Nadu
Applying for education loans in Tamil Nadu offers its own set of benefits. It also offers access to additional features such as:
- Expenses Covered: The loans cover tuition fees, test fees, books, equipment, dormitory fees, accommodation, and food.
- Moratorium Period: The moratorium period, which often lasts between six and twelve months after the course is over, might vary in duration depending on the lending bank and the terms of the loan.
- Loan Margin: There are private banks in Tamil Nadu that offer a 0% loan margin.
Rejection of Education Loan in Tamil Nadu
There are multiple factors that can lead to rejection of education loans in Tamil Nadu.
- Firstly, most students provide Kotu Patta which is not applicable during loan application. Instead, you should provide a Patta, an individual property.
- Secondly, the property should have some mandatory approvals such as CMDA in Chennai or DTCP in Coimbatore, Madurai, Tiruchirappalli, and Salem so that you become eligible for a secured loan.
- Thirdly, not ensuring that collaterals provided are not constructed as per the approved building plan will result in an FSI deviation, leading to loan rejection.
Whether studying in Tamil Nadu or abroad, the expenses associated with education are enormous in this era. Applying for an education loan is the easiest way to finance those educational expenses and chase your dreams. However, applying for an education loan is a tedious and complex process.
Propelld not only helps you get through this process easily but also with minimal documentation and processes that are 10X faster than banks.
Check out more reasons why Propelld can be a wise choice for your education loan:
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