The latest reports from a credit bureau show that financial institutions around India disbursed about Rs.11,000 crore under education loans in the 12-month period ending September 2020. The number clearly indicates the popularity of education loans as a financial instrument for supporting higher studies in India or even abroad.
The Central and State governments have various education loan schemes that further support students seeking financial aid. Read on to know more about some of the most notable schemes in India.
Most Notable Educational Loan Schemes
Listed below are some popular study loan schemes that extend financial support to students in need.
- Vidyalakhsmi Portal
This purpose-built portal allows students to find a suitable educational loan offer hassle-free. They can also use the portal to apply for funds through education loan providers via a common application form known as CELAF. Individuals can also keep track of their application status and related details on the portal.
- Credit Guarantee Fund Scheme for Education Loan or CGFSEL
The Indian Government introduced this scheme to extend affordable study loans. Under the CGFSEL, one can avail up to Rs.7.5 lakh without collateral or third-party guarantee.
- Central Government Scheme of Interest Subsidy on Educational Loan
Operated by the Indian Government, this scheme extends monetary support to students hailing from the financially weaker sections of India. The subsidy on offer is applicable to an education loan of up to Rs.7.5 lakh, even if the total amount is higher. Individuals must meet the below eligibility parameters to avail of funds under this scheme.
- The applicant must secure admission to a recognised college in India
- The gross annual family income of the applicant must not exceed Rs.4.5 lakh
Individuals need to submit necessary documents along with the application to apply under this scheme.
- Scheme of Interest Subsidy on Educational Loan
This education loan scheme is exclusively for students belonging to the OBC (other backward class) and EBC (economically backward class) categories pursuing a degree abroad. The eligibility criteria for this scheme include:
- Admission at a higher and post-graduate level
- An annual family income not exceeding Rs.3 lakh and Rs.1 lakh for OBC and EBC, respectively
Individuals need to submit income tax details with the application.
- Padho Pardesh Scheme
This is a tailor-made education loan plan that provides financial support to students belonging to minority communities. Following are some highlights of this plan:
- Only applicants pursuing PhD, Masters, or M.Phil are eligible
- The applicant’s family income must not exceed Rs.6 lakh per annum
- They need to submit income proof with their application.
This scheme offers education loan for higher studies, and it is solely reserved for this.
Apart from these notable schemes, several other educational loan plans are available to provide financial support to individuals in need. However, the amounts offered by these schemes are limited, and the application process is long drawn. Individuals can easily bypass this hassle by opting for a loan against property for education.
Benefits of an educational loan against property
A loan against property allows individuals to mortgage their property and avail necessary funds for educational purposes. Here are some notable benefits of this financing method:
- No restriction on its usage; hence, one can meet an array of expenses
- Lenient eligibility criteria
- A competitive interest rate
- Flexible repayment
- Significant loan quantum
Apart from these benefits, leading financial institutions also extend pre-approved offers to reduce the hassle of the loan application. These offers, available on loan against property, home loan, etc., streamline the application process and save time. One can easily check their pre-approved offer by registering their basic contact information.
Even though education loan schemes offer a viable method to secure financing for higher studies, they have their limitations. In this regard, one can opt for a LAP to eliminate these hassles. However, one must know everything about a loan against the property for education before applying for it to make an informed decision.
