Basic Criteria about the Education Loan Amount
The maximum loan amount you can take for an education loan depends on the terms of the financial institution from which you wish to take the loan. The maximum loan amount you can take for an education loan depends on the terms of the financial institution Getting the maximum loan amount for an education loan from which you wish to take the loan.
The need for collateral arises upon crossing a certain limit for the amount of education loan.
Before choosing the amount you wish to take the loan, it is important to determine the institution from which you are going to pursue your higher studies.
This needs proof of admission to a selected recognized educational institution and a schedule of fees.
The amount of education loan you can apply for depends on your income statement, statement of assets and liabilities etc.
It is important to choose an education loan amount to cover all your education expenses including your tuition fees, accommodation fees, exam fees, library fees, travelling and other expenses required to complete your education.
How to get a maximum loan amount?
There is a chance that the banks can finance your education loan for 100% of the loan amount depending on the required loan.
For studies in India, 5% of the required amount needs to be financed by the applicant.
For studies abroad,
Under education loans, the maximum loan amount you can get for your higher studies in India is Rs. 15 lakhs.
To pursue studies abroad, the maximum loan amount you can get under the education loan scheme is Rs. 25 lakhs.
Need for collateral to get the maximum loan amount
The loan amount is less than 4 lakhs –
To get a loan for an amount less than Rs. 4 lakhs, there is no collateral required by the lender. It can issue a loan without having to keep anything as security.
In these cases, the loans are unsecured which do not require any sort of collateral like a guarantee letter or any immovable asset.
It is easier to apply as there is no collateral asked by banks during the application of the education loan.
Loan amount between 4 lakhs and 7.5 lakhs –
To get an education loan for an amount between Rs. 4 lakhs and Rs. 7.5 lakhs, a guarantee letter is to be given by an employee of the bank or any home bank.
This is to be taken as collateral security by the banks before approving the education loan amount.
This type of collateral is required to take an education loan for an amount between 4 lakhs and 7.5 lakhs.
Loan amount greater than 7.5 lakhs –
To get an education loan amount greater than Rs. 7.5 lakhs, there is collateral required to be submitted to the banks.
It acts as a security to the banks for the loan they give to the student.
What are the advantages of getting a maximum loan amount?
Covers all the required expenses
An education loan covers all the required expenses which are needed to go with the education.
There won’t be any expenses left out in case you obtain the maximum amount for an education loan.
All the costs have to be analysed and computed before deciding on the loan amount. Hence, getting a maximum loan amount gives you the advantage of covering all your expenses.
The required expenses include accommodation expenses, travel expenses, food expenses or any other sort of expenses required by the student.
If you can get the maximum loan amount, you can cover all these expenses from the loan amount itself.
In case of additional expenses
In case there are any additional expenses, a higher education loan amount helps you cover all those expenses.
Any emergency purposes can also be met by using those loan amounts in case the amount is sufficient enough to fulfil all those expenses.
No disturbance to personal savings
There won’t be any disturbance to your savings if you have a sufficient loan amount to fulfil all your required education expenses.
When you take a personal loan sufficient enough to meet all the expenses, you need not spend any of your savings, which remains intact.
They can then be used for any other purposes or investments you wish to make.
So, a maximum loan amount would give you the advantage of having no disturbance to your savings.
More tax savings
There is no maximum limit for the amount of deduction you claim under an education loan. So, the more the loan amount, the more amount you can claim for a deduction.
You will have the advantage to save more on your income tax if you get the maximum loan amount.
It acts as a contingency
An education loan will help you safeguard any unprecedented events which prolong your education course’s duration.
There won’t be any sort of disturbance in your education schedule if you have an education loan for the required amount.
It helps to build a credit history
A higher loan amount and its repayment help in increasing your credit score. This further helps you get extra credit facilities in case of any requirement.
A good credit score always helps you to build up a good credit history, with the advantage of having an additional credit benefit.
A higher education loan amount gives you benefit in many ways. But, you should also check your repayment capability that the interest amount does not fall as a burden to you.