Education loans for MBA degree programs may differ from other types of loans as the interest rate may be low and the repayment schedule can be deferred while the student is still in education.
Why should I apply for Education Loan?
A loan helps make you independent. You'll help your parents by financing your MBA by yourself. You'll be able to finance unforeseen expenses related to additional exams to be taken, travel arrangements, laptop computers, and books. For example, suppose your living expenses are higher now since other low-cost campus arrangements might not be working out, or suppose your travel expenses have gone up due to rate increase, taxes, etc. And yet another reason of availing an education loan is the Tax Benefit. The borrower or co-borrower can avail a benefit under Section 80(E) of Income Tax Act of India.
Steps to Apply for an Education Loan for Your MBA
Today, technology has made it very simple to apply for an education loan. You can apply from anywhere in India. You can even apply before your confirmed admission. It’s just a click away.
Most banks provide an online application and support. The process is simple, as illustrated below:
- Student: Complete an online education loan application form
- Bank: Follow up with the student and parents to answer questions
- Bank: A representative visits your house and collects a signed application form with the supporting documents
- Student: Provides a completed education loan application form with all the required supporting documents
- Bank: A credit team will review and underwrite the education loan application
- Bank: Approves the education loan or asks for any additional information required
- Student: Completes the education loan disbursement formalities by signing the education
- loan agreement
- Bank: Deposits the education loan amount in the required bank account electronically
FAQ’s of Students Related to Education Loans
Q. Who can apply for education loan?
A. Anyone who is willing to pursue higher education can apply for education loan.
Q. How can I apply for education loan?
A. You can go to the nearest bank offering education loans to apply. Applying to most banks is now very convenient. You can either call, SMS, log on to their website or email.
Q. Which bank education loan is better for me?
A. These are some of the parameters you should look into:
- Which bank is providing 100% finance
- Rate of interest
- Security flexibility
- Quick and door step services
Q. Can I apply for the loan before admission to an MBA program?
A. Yes, today most of the financial institutions offer loan approval before your confirmed admission. This helps you show proof of fund for your admission or for a Visa.
Q. How big of a loan can I get?
A. You can get loan upto 100% of your expenses.
Q. When do I start paying my EMI?
A. In typical education loan product EMI starts after six months of course period. i.e. course period + 6 month.
Q. Will we get a tax benefit on interest paid on an education loan?
A. Yes, borrower or co-borrower (any one) is entitled for tax benefit under section 80 E of Income Tax Act.
Q. My first term fee has already been paid for. Can I now apply for a loan for the next term/semester?
A. Yes, you can apply for education loan anytime upto 3 months of paying fees and/or before or during the course.
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This FAQ page has been prepared by Credila – HDFC, an education loan expert. For any further queries on your education loan, please write to trishuls@credila.com during the next 15 days. GMAC makes this page available to organizations that we think might be beneficial to our readers. GMAC is not affiliated with these organizations and we are not responsible for the accuracy of the information provided. Neither should their presence on our website be construed as an endorsement of their products or services.
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