{"id":11596,"date":"2020-01-12T09:59:00","date_gmt":"2020-01-12T04:29:00","guid":{"rendered":"https:\/\/www.apnaplan.com\/?p=11596"},"modified":"2020-01-12T10:19:52","modified_gmt":"2020-01-12T04:49:52","slug":"education-loan-rules","status":"publish","type":"post","link":"https:\/\/www.apnaplan.com\/education-loan-rules\/","title":{"rendered":"Looking for Education Loan – Know these New Rules"},"content":{"rendered":"\n

The IBA (Indian Banks\u2019 Association) has come-up with new guidelines regarding Education Loan<\/strong> named as \u201cModel Education Loan Scheme<\/strong>\u201d and would be followed by all its member Scheduled Commercial Banks- which means all big private and public banks like SBI, ICICI, etc.<\/p>\n

The idea is to provide financial support to meritorious students for pursuing higher education in India and abroad. We list down the salient features:<\/p>\n

Education Loan \u2013 Limit, Margin and Repayment Period<\/h2>\n

Students can borrow loan up to Rs 10 lakh for study in India and up to Rs 20 lakh for study abroad<\/strong>.<\/p>\n

Collateral free loans up to Rs 7.5 Lakh<\/strong> under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL).<\/p>\n

No Margin for loan up to Rs 7.50 Lakh<\/strong> \u2013 which means 100% education cost can be covered through education loan without any contribution from self.<\/p>\n

Repayment period of 15 years<\/strong> \u2013 The maximum repayment tenure for loan would be 15 years which would means lower EMIs but remember more the tenure more is the interest outgo.<\/p>\n

\n

Read:<\/strong> Tax Benefit on Education Loan u\/s Sec 80E<\/a><\/p>\n<\/blockquote>\n

Moratorium period<\/h2>\n

One year moratorium for repayment after completion of studies<\/strong> in all cases \u2013 this is great for students who do not get job immediately after completion of their course. You need not pay anything in the moratorium period.<\/p>\n

Moratorium considering spells of unemployment\/under-employment, say two or three times during the life cycle of the loan.<\/p>\n

Moratorium for the incubation period if the student wants to take up a start-up venture<\/strong> after graduation.<\/p>\n

\n

Read: 15 Personal Finance Tips for your First Job<\/a><\/p>\n<\/blockquote>\n

Interest Rate<\/h2>\n

Simple interest for loan is calculated from the date of disbursement of loan up to the end of moratorium period<\/strong> i.e. course period plus one year and therefore the interest is never risen to principal amount.<\/p>\n

At the start of repayment period, the interest accrued is clubbed with principal & EMI is calculated accordingly<\/strong>. The servicing of interest during study period and the moratorium period till repayment commences is optional for students.<\/p>\n

\n

Also Read:<\/strong> How to Pay 0 Income Tax on Rs 20 Lakh Salary?<\/a><\/p>\n<\/blockquote>\n

Concession on Education Loan<\/h2>\n

The Model Educational Loan Scheme of IBA provides for certain concessions on educational loans which inter-alia includes<\/p>\n

    \n
  • 1% interest concession if interest is serviced during the study period<\/strong> and subsequent moratorium period prior to the commencement of the repayment<\/li>\n
  • 0.5% concession in the interest rate to the girl students<\/strong><\/li>\n<\/ul>\n

    For the students belonging to economically weaker sections, an interest subsidy scheme on educational loans is in place.<\/strong> Under the scheme full interest subsidy is available during the period of moratorium on educational loans up to Rs 7.50 Lakh disbursed on or after 1st April, 2009.<\/p>\n

    \"Education
    Education Loan – Rules<\/strong><\/figcaption><\/figure>\n

    Conclusion<\/h2>\n

    The Model Education Loan Scheme by IBA is good initiative. It will standardize a lot of terms and conditions across major banks for education loan. The only differentiating factor would be interest rates on offer. Additionally, collateral free loan and no margin requirement<\/strong> for loans up to 7.5 lakhs is great initiative and would help students from poor income group. As the admission season draws near, a good understanding about these education loan rules<\/strong> would help you in making right choice.<\/p>\n","protected":false},"excerpt":{"rendered":"

    The IBA has come-up with new guidelines regarding Education Loan which would provide financial support to meritorious students for pursuing higher education in India and abroad.<\/p>\n","protected":false},"author":1,"featured_media":11601,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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IBA has come-up with new guidelines regarding Education Loan which would provide financial support to meritorious students for pursuing higher education in India and abroad.","_links":{"self":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts\/11596"}],"collection":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/comments?post=11596"}],"version-history":[{"count":0,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts\/11596\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/media\/11601"}],"wp:attachment":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/media?parent=11596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/categories?post=11596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/tags?post=11596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}