How to Get Education Loan After 12th: Complete Guide!

How to Get Education Loan After 12th in India

Navigating the path to secure an education loan after completing your 12th can be a pivotal step towards achieving your academic dreams. In India, with the rising cost of higher education, an education loan not only becomes a necessity but also a gateway to opportunities for students aspiring to pursue further studies, both domestically and internationally. Understanding the nuances of how to get an education loan after the 12th is crucial, as it lays the foundation for a successful application process. This guide aims to demystify the process, providing a comprehensive overview to secure your financial future as you embark on your educational journey.

Securing an education loan after the 12th is the first significant step for students planning to further their education. With financial institutions in India offering loans at competitive interest rates, the process has become more accessible. How to get an education loan in India involves a detailed assessment of eligibility criteria, including academic performance, the course of study, and the institution's reputation. Researching and choosing a loan that best suits your educational needs and financial circumstances is essential to ensuring a seamless transition to higher education.

‍

Key Factors for Securing an Online Education Loan

Equipping yourself with the right education can unlock a world of opportunity. But sometimes, the initial cost can be a hurdle. This is where education loans come in, offering financial aid to bridge the gap. A staggering 20.6% surge in education loans was witnessed between April-October 2023 itself, highlighting the increasing demand for financial aid. But before diving in, it's crucial to understand the key parameters that define your loan:

Loan Limit

This determines the maximum amount you can borrow. It typically varies based on the chosen course, university, and your (or your co-applicants) financial profile. In India, loan limits for education loans can range from ₹4 Lakhs to ₹1.5 Crore.

Expenses Covered

Education loans go beyond just tuition fees. They can cover a range of expenses such as hostel fees, books & study materials, examination fees, and even laptop costs (depending on the lender).

Interest Rate

The interest rate you pay will significantly impact your overall loan cost. It's essential to compare rates offered by different lenders to secure the most favorable deal. Interest rates for education loans in India can currently range from 6.80% to 11.50% depending on the lender, loan amount, and your credit profile.

Moratorium Period

The moratorium period typically includes the course duration plus an additional 6 months to 1 year after course completion, allowing the borrower time to secure employment before beginning to repay the loan. SBI and HDFC Bank both offer such provisions, aligning with industry standards to support students post-graduation​.

Repayment Duration

The duration determines how long you have to repay the loan. A longer duration translates to lower monthly installments but also means paying more interest overall. The repayment duration for education loans in India can typically range from 5 to 7 years.

Repayment Policies

Understanding the repayment options offered by the lender is crucial. Explore flexible repayment options that suit your future earning potential. Many lenders offer online repayment portals and automated ECS debit for convenient repayment.

‍

Education Loan Eligibility

Eligibility Criteria for Applicants

1. Must be Indian nationals.
2. Should have secured admission to recognized higher education institutions in India or abroad.
3. The age limit is typically between 18 to 35 years at the time of loan application.
4. A consistent academic record is required.
   

Co-applicant Salary Requirements

1. A co-applicant (parent, guardian, or close relative) is mandatory.
2. Must have a stable source of income for loan repayment.
3. Salary requirements vary by lender and are based on loan amount and repayment capacity.
4. Stricter income criteria for unsecured loans.
   

Specific Eligibility for Secured and Unsecured Loans

Secured Loans:

• Require collateral (property, fixed deposits, gold).
• More flexible eligibility criteria.
• Typically offer lower interest rates.

Unsecured Loans:

• Do not require collateral.
• Stricter eligibility requirements on income and credit history.
• The financial stability and creditworthiness of the co-applicant critically assessed.

‍

Click here for Higher Chances of Approval than Banks - Propelld Education Loan

‍

Types of Online Education Loans

Unsecured Education Loan After 12th

If you're looking to study further but don't have property or assets to use as collateral, an unsecured education loan could be the right choice. These loans help you cover your education costs without needing to secure them against property.

‍

Secured Education Loan After 12th Class

For students who have assets like property and are looking for a loan with lower interest rates, secured education loans are an option. Using your assets as security, you can get a loan with better terms to help pay for your education.

‍

Preferred Top Institutions in India for Education Loans:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.

‍

Documents Required for Education Loan

When applying for a loan, the documentation process varies based on the borrower's profile. Here is a detailed breakdown of the types of required documents for two specific borrower profiles:

Working Professionals

1. Proof of Income: Recent pay stubs, tax returns, and employer verification letter.
2. Identification Documents: Government-issued ID and Social Security card.
3. Proof of Address: Utility bills or lease agreements.
4. Financial Statements: Profit and Loss statement, bank statements.
5. Loan Application: Completed form with personal details and loan purpose.
6. Ownership and Affiliations: Disclosure of business interests.
7. Business License: Proof of license and business checking account details.
8. Business Plan: Detailed plan for business loans.

Individuals with Existing Loans

1. Current Loan Documents: Details of ongoing loans and financial commitments.
2. Collateral Documents: Proof of collateral if required.
3. Loan History: Information on previous loans and repayment history.
4. Financial Documents: Profit-loss statements, balance sheets, and additional financial statements.

High School Graduates

1. Proof of admission to higher education institutions.
2. Academic records highlighting past educational achievements.
3. Government-issued identification and residence proof.
4. Income proof of guardians, to establish financial stability.

According to the Reserve Bank of India, the adequacy and accuracy of submitted documents significantly affect the approval rates of education loans.

Documents Specific to Secured and Unsecured Loans

Secured Loans:

• Documents related to the collateral, such as property deeds or fixed deposit certificates, are required.

Unsecured Loans:

• Focuses more on the applicant's academic achievements and the financial stability of their family. No collateral is needed.

‍

‍

How to Apply for an Education Loan After 12th

Step-by-step Guide for the Online Application Process

1. Research and Compare: Start by researching various banks and financial institutions. Compare their interest rates, loan terms, and the expenses they cover.
2. Check Eligibility: Visit official websites to check your eligibility for an education loan. Criteria usually include age, academic performance, and the institution you plan to attend.
3. Gather Required Documents: Prepare necessary documents, including academic records, admission letters, and KYC documents.
4. Apply Online: Fill out the application form on the lender's website. Upload the required documents and submit your application.
5. Follow-up: Keep track of your application status through the website or customer service.

How Online Processes Simplify and Accelerate Loan Approval

1. Automated Processes: Online applications are processed faster due to automation, reducing manual entry errors and wait times.
2. Immediate Document Verification: Digital platforms enable quick verification of uploaded documents, speeding up the approval process.
3. Direct Communication: Many institutions offer direct communication channels through their portals, allowing for quicker resolution of queries.
4. E-signature and Online Sanction Letters: E-signatures and digital sanction letters further reduce the processing time, making funds available sooner.

‍

Education Loan for Courses After 12th

BBA

Thinking of running a business or leading a team one day? A BBA can be your first big step. You can get a loan to help pay for this course, and it’ll cover your classes, books, and even some of your living costs while you study.

BDS

If you dream of becoming a dentist, then BDS is where you start. Loans for this course will help you handle the fees, buy all the tools you need, and cover other costs.

B Pharmacy

Fascinated by medicines and how they help heal us? A B Pharmacy degree is your gateway to the pharmaceutical world. Getting a loan for this course means you won’t have to worry about tuition or the costs of labs and books. 

Diploma Courses

Want to get skills fast and jump straight into work? Diploma courses are perfect for that. They focus on giving you the practical skills you need for jobs in engineering, design, IT, and more. Loans for these courses are usually easier to get and pay back since these courses don’t take as long and cost less. A smart choice if you want to start working soon!

Engineering

Engineering is all about solving problems and creating new things. Loans for engineering can cover everything from your class fees to the money you need for projects. 

‍

What expenses are covered under an education loan

While applying for an education loan you should look for the best. One that covers a host of expenses including college fees, hostel fees, exam fees, study materials, and transportation costs. Read the article below to learn more.

Several banks and non-banking financial institutions provide loans for financing education in India. These loans are usually collateral-free and come with lower interest rates. As a student, you can apply for the best education loan in India to cover various expenses related to your higher education. Let's explore these in detail.

Tuition fees

You must pay a tuition fee to your college or university to pursue a course. It forms a major chunk of your total higher education expenses. That is why most education loans cover these expenses. The primary purpose of an education loan is to help students pay their tuition fees without any hassles.

Accommodation fees

Accommodation fee is another major expense you may incur while pursuing your higher education. It refers to the amount you may spend on a hostel or a rented flat to live in another city or country.

Travel expenses

You may incur significant expenses on travel tickets to your college from your hometown. Besides, you may also have to spend some amount to commute from your place of residence to the college. The best education loan in India usually covers all such expenses.

Exam fees

Few colleges ask their students to pay exam fees to appear in university examinations. Even this minor expense can burn a hole in your pocket and add up to a lot during the degree. But thanks to the best education loan in India, you can get this expense covered.

Study materials

You may have to buy study materials like books, laptops, cameras, and stationery items, among others. The best education loan in India covers these expenses as well.

Other miscellaneous expenses

If you plan to pursue higher education in a foreign country with a stronger currency than India, you may require additional funds to meet your day-to-day expenses. You may also need money for miscellaneous costs, such as travel and health insurance, phone bills, socialising with friends, etc. The best education loan in India covers all such expenses.

‍

List of Banks and Financial Institutions Offering Online Education Loans

• Leading Banks: State Bank of India (SBI), HDFC Bank, ICICI Bank, and Axis Bank offer tailored education loans with flexible terms.
• NBFCs: Avanse Financial Services and InCred are known for specialized education loan solutions.
• Research and Comparison: Applicants must compare offers and understand terms by visiting official websites or contacting banks directly.

‍

‍

Why Apply Online through Portals like Propelld

Benefits of Applying Through Online Platforms

• Streamlined Application Process: Online application with fewer documents and no physical verification.
• Access to Wide Range of Opportunities: Partnerships with over 2500+ educational institutions across India.
• Tailored Loan Solutions: Customized financing options for a diverse customer base, including students and parents.

Lower Interest Rates, Faster Process

• Competitive Interest Rates: More affordable loans compared to traditional banks.
• Quick Loan Disbursement: 10X faster than banks, with university loans disbursed in as little as 7 days and almost instant disbursement for skill-up courses.

Negotiation Support and End-to-End Assistance

• Personalized Service: Negotiation support and comprehensive assistance throughout the loan application process.
• Agile Approval Process: Considers future employability and academic performance, extending loans to deserving candidates beyond traditional financial metrics.

Cashback and Other Incentives for Using Specific Platforms

• Additional Benefits: Offers like cashback and incentives when using specific platforms or partner institutions.
• No-Cost EMI Options: Available at selected partner institutions, reducing the financial burden on students and parents.

Propelld's Unique Positioning

• Specialization in Domestic Loans: Focus on financing education across all levels within India, from KG to PG and beyond.
• Innovative Financing Solutions: No-cost EMI, tranche facility for semester-wise disbursement, and high approval rates for a variety of educational programs.
• Commitment to Accessibility: Propelld aims to make quality education accessible by providing affordable and flexible loan options, with a customer base of over 2 Lacs and a pan-India presence.

Frequently Asked Questions

Is it possible to avail of an educational loan without a guarantor?

Yes, obtaining an unsecured education loan after the 12th is feasible in India for amounts below a certain threshold, typically around ₹4-7.5 lakhs, depending on the lender's policy and the applicant's profile.

Can we get an education loan at 0% interest?

While true 0% interest education loans are rare, government-subsidized schemes and some private lenders offer significantly reduced rates for qualifying students, especially for those showing exemplary academic performance or coming from economically weaker sections.

How long does it take to process an education loan in India?

The processing time for an education loan can vary from a few days to a few weeks, depending on the lender and the completeness of the application. Providing all required documentation promptly can expedite the process.

Is collateral necessary for all education loans after the 12th?

Collateral is not required for all education loans. Unsecured loans are available for lower amounts, while larger loans may require collateral, depending on the lender's policy and the loan amount.

What is not covered in education loan?

Education loan insurance may not cover pre-existing health conditions or diseases. This means that if the student has a medical condition at the time of taking the loan, related expenses may not be covered.

Can I use an education loan for other purposes?

A student loan can be used only for the purpose for which it is taken. Besides, a student loan has specific eligibility criteria, and you must fund 15% of the expenses. A Personal Loan for education is easy and quick to get, and you can fund up to 100% of your expenses.

Do education loans cover living expenses?

Education loans are unsecured loans that can be used to cover expenses related to education, such as tuition fees, books, living expenses and other such expenses as transportation costs, etc.