FAQ on education loan (Part 2) | Kalvimalar - News

FAQ on education loan (Part 2)- 25-May-2023

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Education loan has become handy to students as well as parents to ensure to fulfill the education dream of a family or an individual. But, many are not aware of the intricate process of education loans. Here it is for you ....!

16. Is there any common application form to apply for an education loan? Yes, CELAF is an application form accepted by all banks recommended by the Indian Banks Association (IBA). 

17. Should the applicant apply for an education loan through family or through college?

Vidya Lakshmi is the official website to apply for educational loans. Candidates can apply online from wherever they are.

18. How to choose the bank through the Vidyalakshmi website ? 

Applicants can choose the closest bank and those that provide loans with the least interest rates through the VidyaLakshmi website. 

19. Does the applicant need to select the bank? Or will the bank select the applicant?

Applicants can select their three bank choice of preference through VidyaLakshmi website. Mostly, the first choice of the bank itself will provide the loan. Sometimes if the first one rejects, the applicant may choose the second one. 

20. Before applying through VidyaLakshmi website, does the applicant need to go to the bank?

No. Applying online first through the website is the right approach. 

21. In which banks can the applicant apply for an education loan through Vidya Lakshmi website?

The website will select three banks that are close to the applicant. 

22. Through one application to how many banks can I submit for the education loan?  

Through Vidyalakshmi website, it is possible to submit one application alone. But, the applicant chooses three banks through that one application. 

23. What are the eligibility criteria to apply for an education loan through VidyaLakshmi website? 

  • The annual income of the parent should be less than 4/5 lakhs per annum.
  • Students can avail education loan for NAAC-accredited courses or courses offered through Centrally Funded Technology Institutes (CFTIs).
  • Education loans should be taken under the Indian Banking Association (IBA) Model Education Loan Scheme
  • Candidates can get loans only ones for Undergraduate (UG), Postgraduate (PG) or Integrated courses in one go. 
  • Interest rates for education loans are charged as per the base rate of individual banks.

24. After submitting the education loan application, can I re-correct the details on the Vidya Lakshmi website?

To make changes in the education loan application form, re-apply for the loan scheme, after 'close/reject' your first application. Thus, it is possible to make changes to the wrong details. 

25. Is it necessary for a co-applicant for an education loan?

Yes. For all full-time courses, a co-applicant is needed. The co-applicant may be the parent/ guardian. If married could be the husband or the wife. 

26. Is there any cap on the loan amount? 

For studies in India, banks offer loans with a cap of 10 to 15 lakhs and for studies abroad, they would provide loans with a ceiling of 20 to 30 lakhs. If the collateral is provided,  the applicant can avail the higher loan amount. 

27. What is the grace period for repayment of an education loan? 

By default, the repayment period for education loans in most banks is 5 to 7 years. However, in case of a higher loan amount, the tenure will be extended to 15 years.

28. Is it mandatory for banks to provide insurance policy with education loan? 

Banks make it mandatory to provide an insurance policy along with the education loans. In case of unexpected death of the beneficiary, the loan amount can be recovered from student's life insurance policy. 

29. Who are the most important people to know about education loans? 

Students, Parents, Teachers, staff, Non-Governmental Organizations (NGOs) and volunteers.

30. Whether a scholarship obtained by a student applicant would be treated as the margin of the applicant for repayment of education loan ? 

Yes, most banks allow the scholarship or subsidies to be treated as loan margin repayment. 


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