NEW DELHI: It is becoming increasingly difficult to afford the cost of higher education, given how expensive it is and also rising consumer price index (CPI) inflation.
Thus, the only option left with parents is to finance it via an education loan. Education loans are available from almost all banks for some institutions in India and abroad.
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Education loan can either be taken by parents or students which can be repaid after the completion of course and achieving financial independence. The loan, interest rates, and equated monthly instalments (EMIs), and other terms and conditions, differ from bank to bank.
It is, therefore, important to compare rates before taking an education loan because it affects EMIs. For instance, taking an education loan of Rs10 lakh for eight years from the State Bank of India (SBI) will see an EMI of Rs13,559, while the same from HDFC Bank will cost Rs14,937.
EMI varies because of the difference in their rates. For SBI, the interest rate is 6.85% and for HDFC Bank, the interest rate is 9.55%.
In today's piece, we have listed 20 banks that are currently offering education loans. The cheapest starts at 6.75%.
Normally, when you apply for an education loan, documents required include admission statement from the educational institution, mark sheets from past educational colleges, age proof, identity proof, and address proof. If the student is working, then salary slips of the last three months and a bank account statement of the last six months. Besides, passport size photographs and a copy of a valid VISA, if going abroad for studies, is required.
(Do you have a personal finance query? Send in your queries at mintmoney@livemint.com and get them answered by industry experts)
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