You should apply for a loan as per your current needs, future earning probability and collateral security availability
The upper limit of an education loan may vary depending on the type of course or college and also the borrowers eligibility.
The second wave of the Covid-19 pandemic has aggravated the challenges for many. Even young people are facing challenges when it comes to planning for their higher education. One of the most common ways to bridge any funding deficit for education is to take a loan. However, before applying for an education loan, you should be aware of a few key points, including its eligibility criteria, tax implication, etc.
Fulfilling eligibility criteria
If you are below 18 or dont have a source of income, you can apply for an education loan with your parents or siblings as co-applicants. There is no collateral requirement for education loans up to Rs 4 lakh. For a loan amount of above Rs 4 lakh and up to Rs 7.5 lakh, the bank may ask for collateral if the income of the co-applicant is insufficient. For loan amounts above Rs 7.5 lakh, banks usually require a co-applicant and adequate tangible collateral security.
Before applying for an education loan, the student also needs to have a confirmation letter for admission in a recognised college as per UGC, AICTE, governments, etc. A loan is also allowed for admission in premier autonomous colleges such as IITs, IIMs, etc. Education loans are available for both undergraduate and post-graduate courses. You can also get an education loan for admission in a foreign college.