Types of Educational Loans

An educational loan is a form of loan given to students for financing their entire course fees. When the loan is repaid, the student will have to pay an interest on the loan amount. Banks in India offer loans at various interest rates according to the requirement of the student. Do you still have doubts on student loan then you probably visit the previous post of knowing education loans.

There are several banks that offer customized educational loans for students aspiring to join top Indian institutions such as Indian Institute of Technology (IIT), Indian Institute of Management (IIM), Indian School of Business (ISB) and even Xavier School of Management or Xavier Labor Research Institute (XLRI). Top banks such as Union Bank of India, Oriental Bank of Commerce, and IDBI Bank have created special education loans that are uniquely designed for specific higher education programmes.

Types of student loans in India

Let us take a look at some of the most common kinds of student loans in India:

Educational loans for higher education in India

• You can apply for a student loan for a graduate course, a postgraduate course, or a postgraduate diploma. These courses will have to be held by authorised universities and colleges. They may sometimes be approved by the University Grants Commission or recognised by the central or state government.
• You can take a loan to fund professional courses such as C.F.A., C.A., I.C.W.A. and more.
• You can take a loan to finance courses approved by foreign universities that are held in India.
• You can obtain a loan for nursing courses, computer certificate courses, evening courses, etc.
• You can also use a loan for aeronautical courses, merchant navy courses, shipping courses, and pilot training courses.

Student loans for courses held abroad

• If you are studying overseas, you can take a loan for technical or professional graduate courses that are held by authorised universities and colleges.
• You can take a loan for postgraduate courses such as MBA, MCA, MS, and so on.
• Educational loans in India for foreign courses will generally cover tuition fees, learning material, living expenses, and more.
• You can use a loan even for professional accounting courses offered in foreign nations.
• You can use it for CPA in the United States or for CIMA in the United Kingdom.
• For some foreign courses, candidates are required to qualify an exam in General English or some other qualifying exam. In these cases, students can get an educational loan only if he or she passes the exam.

Student loans for dual courses: 

Some colleges in India offer dual courses for degree courses as well as diploma courses. Banks in India offer loans exclusively for such purposes.

Top-up education loans:

A few students may be interested in studying more after they complete a particular course. This can be to build their career to get better job offers and better salary packages. In such cases, banks offer a top up or second education loan to a person if they apply for one in the waiting period of the original education loan.

These are some of the major types of educational loans in India. Different banks have different terms and conditions for student loans. Most banks do not charge prepayment penalties on education loans. Some banks provide insurance to students who are interested in it. The premium is generally paid by the applicant or co-borrower. You can choose a student loan depending on your specific needs.

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