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What is an Education Loan? Complete Guide for Students

What is an Education Loan? Complete Guide for Students

The best and most significant investment for parents is their children’s education, ensuring their children’s future is safe and secure. However, in today’s time, education has become prohibitively expensive, and even students with the means are unable to afford a good education. Therefore, with the government’s assistance, educational loans are now available to all capable students, enabling them to complete their education without financial difficulties.

Today, in this article, blog, we will talk about everything regarding education loans.

What is an Education Loan?

An education loan is a type of financial assistance specifically designed to help students pay for their educational expenses. Unlike regular personal loans, education loans come with favorable terms, lower interest rates, and flexible repayment options that make higher education accessible to deserving students. After completing your studies and when you start earning, you can repay the loan if you do not have the money to repay it in the days ahead.

Types of Education Loans

There are many types of loans that are provided to students for their studies.
  • Domestic Education Loans

This loan is available to students to study in their own country. With this loan, students can study in any state of their country and complete their undergraduate, postgraduate, and professional courses.

  • International Education Loans
This loan is given for studying abroad if students want to complete their studies in another country. This loan is more commonly available in MBBS-type courses. This helps students manage university tuition fees, hostel expenses, and expensive study materials.
  • Secured vs Unsecured Loans

Secured loans require you to provide property or a fixed deposit as security, which results in a higher amount at a lower interest rate.

Unsecured loans are loans where you don’t need to provide any security upfront. However, they offer a smaller loan amount with higher interest.

Who is Eligible for Education Loans?

Most education loans have simple eligibility criteria for students. Let’s know the criteria:

Students must be citizens of the country in which they are applying for the loan. Admission to a recognized university or institute is compulsory for all students, and the minimum age of the student must be 18 years, and the maximum age must be 35 years. Students must also have good academic scores at the time of application to be eligible for an education loan.

How much do the Expenses of an Education Loan Pay for?

We will know for which expenses the education loan is provided to students:
An education loan is provided for expenses like Tuition and examination fees, Library and laboratory fees, Hostel and accommodation charges, Books, uniforms, and equipment, study material like a Computer or laptop, and living expenses like Food and accommodation, Travel expenses, Health insurance, Study tours, and project work.
And for students who apply for an international education loan, it provides for their visa, travel costs, and necessary expenses.

How Much Do You Get?

Loan amounts vary according to the course and destination of the students.
Students who apply for domestic loans can get loans ranging from $5,000 to $50,000 for medicine and engineering courses.
Students who apply for international courses and international loans can get up to $100,000 or even more, depending on their course, country, and institute.

Interest Rates & Terms and Conditions

The interest rates and terms and conditions of education loans are lower than those of personal loans.
The interest rate is based on how much and what type of loan the student has taken and what is the ups and downs in the market at that time and how capable the student is for the loan and for which course the loan is being taken and what is the background history of the student’s family, whether there is any criminal history or complaint of the student or his family, all these things are looked into very carefully while giving education loan and accordingly the interest rate is fixed. Than those of personal loans.
The terms and conditions of repayment are as per the students, like after completing the course, securing employment, and it can be 6 months, 1 year, or 5-15 years.

How to Apply

  • Step 1: Research and Compare
Before applying, first compare all the points like interest rate, terms, etc., to see who can give you a better loan for education.
  • Step 2: Check Eligibility
Also, check whether you are eligible for that loan as per the terms and conditions of that loan.
  • Step 3: Documents
While applying, keep all your necessary documents handy, like:
  • Admission letter 
  • Cost of study 
  • Academic records
  • Income proof per year 
  • Identity proofs
  • Bank statements, etc.
  • Step 4: Submit Application

Fill the form or application with the required documentation.

  • Step 5: Loan Approval and Disbursement
After the education loan, deposit your loan directly to your institute.

Conclusion

An education loan is very important for students and their dreams. With its help, students can complete their studies without any financial problems.

Education loans are available to students in domestic, international, secured, and unsecured types according to their needs, study, and course; hence, students should understand all these types properly before applying for an education loan.
With an education loan, students can take care of their tuition fees, living expenses, hostel, food, and study expenses. Availing an education loan has helped many good and capable students in achieving their goals.

Education Orbit Counselling & Link (EOCL India)

Education Orbit Counselling & Link (EOCL India) helps students who are unable to afford the MBBS course by providing them with an education loan and guiding them regarding the same. If students need an education loan for MBBS abroad, then Education Orbit Counselling & Link (EOCL India) and its expert team provide complete help to the students. If you want to know about any study, MBBS, abroad, or any university in Russia, or have any doubts, then you can contact us, and we can clear all your doubts.
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