Education Loan for School Students in India – Eligibility, Benefits & Application Process

While education loans specifically for school students are limited in India, several banks are now offering tailored solutions. Some banks are introducing specialized loan programs designed to meet the unique financial needs of school students. Also, many banks and financial institutions offer education loans for higher education, which can also be beneficial for students pursuing vocational or professional courses after completing their schooling. Students are advised to begin researching education loan options well in advance. Consulting with financial experts or representatives from banks can help you identify the most suitable loan for your specific circumstances.

This Story also Contains

1. Loan for school students in India
2. How to Apply for Education Loan for School Students in India?
3. Education Loans for Higher Education

Loan for school students in India

Each bank has its specific criteria and processes for education loans. By reaching out to them, you can inquire about their offerings and how they might tailor a loan to your individual needs. We have provided the list of education loans for school students in India

Bank of Baroda Education Loan in India

The Baroda Vidya Loan is a financial product offered by the Bank of Baroda (BoB) to support educational expenses for students pursuing school education. It aims to provide financial assistance to parents or guardians of students enrolled in accredited schools.

Key Features:

• Eligible Courses: The loan is available for students from Nursery to Class XII studying at any accredited school in India.

• Repayment Terms: The loan is repayable in 12 instalments following disbursement.

• Interest Rates: The interest rate for the Baroda Vidya Loan is competitive and may vary based on the borrower's profile.

• Processing Fees: There are no processing charges associated with this loan.

• Documentation Charges: There are no documentation charges required.

• Margin: There is no margin requirement for this loan.

Benefits:

• Financial Support: The loan provides financial assistance to cover school fees, tuition fees, hostel expenses, and other educational costs.

• Convenient Repayment: The 12-installment repayment schedule makes it easier for borrowers to manage their finances.

• No Hidden Charges: There are no additional charges or hidden fees associated with the loan.

Eligibility Criteria:

• Age: There is no specific age restriction for the student to be eligible for the loan.

• Course Enrollment: The student must be enrolled in a recognized school from Nursery to Class XII.

• Parent/Guardian Income: The parent or guardian of the student must have a regular income source.

• Credit History: A good credit history can improve the chances of loan approval and may result in more favorable terms.

SBI Skill Education Loan in India

The SBI Skill Loan is a financial product offered by the State Bank of India (SBI) to individuals pursuing vocational or professional courses. This loan aims to support skill development and enhance employment opportunities.

Key Features:

• Eligible Courses: The loan is available for a wide range of vocational and professional courses approved by the government or recognized institutions.

• Loan Amount: The maximum loan amount varies depending on the course, institution, and the borrower's eligibility.

• Interest Rates: The interest rate for an SBI Skill Loan is competitive and may vary based on the borrower's profile and the loan amount.

• Repayment Terms: The repayment tenure is typically flexible and can be customized based on the borrower's income and repayment capacity.

• Collateral: In some cases, collateral may be required, but the bank's requirements can vary.

• Processing Fees: There may be processing fees associated with the loan, which can be discussed with the bank.

Union Bank of India Education Loan in India

The Union Bank of India Education Loan is a comprehensive financial product designed to support students pursuing higher education in India or abroad, as well as NRI students. This loan offers flexible repayment options, competitive interest rates, and minimal documentation requirements. There is no restriction concerning the minimum and maximum age.

Key Features

• Eligible Courses: The loan is available for a wide range of undergraduate, postgraduate, and professional courses.

• Loan Amount: The maximum loan amount varies depending on the course, institution, and the borrower's eligibility.

• Interest Rates: The interest rate for the Union Bank of India Education Loan is competitive and may vary based on the borrower's profile, loan amount, and repayment tenure.

• Repayment Terms: The loan repayment tenure is flexible and can be customized based on the borrower's income and repayment capacity.

• Moratorium Period: A moratorium period is typically provided during study or up to six months after completion, during which only interest is payable.

• Collateral: The requirement for collateral depends on the loan amount and the borrower's profile. In some cases, a guarantor may be required.

• Processing Fees: There may be processing fees associated with the loan, which can be discussed with the bank.

How to Apply for Education Loan for School Students in India?

Students can apply for the education loan both online and offline. They can check the process to check the education loan for school students.

The process to Apply Online for School Students

1. Visit the Bank's Website: Access the official website of your chosen bank.

2. Locate the Education Loan Section: Look for the page dedicated to education loans.

3. Fill Out the Application: Complete the online application form with your personal, contact, academic, and financial information.

4. Provide Additional Details: Be prepared to provide further information when contacted by the bank.

5. Choose Application Method: Decide whether you prefer a doorstep service or an in-person visit to finalize the loan approval.

Process to Apply Offline for School Students

1. Visit a Bank Branch: Go to your preferred bank branch.

2. Obtain an Application Form: Request a student loan application form from the bank representative.

3. Complete the Form: Fill out the form with your personal, academic, and financial details.

4. Discuss Loan Terms: Consult with a bank official to clarify loan terms and conditions.

5. Submit Application: Hand in the completed application form and required documents.

6. Receive Loan Agreement: Await the loan agreement once your application is approved.

Documents Required for School Education Loan

• Admission letter from the educational institution

• Marksheets (previous education - school/college)

• Age proof

• ID proof

• Address proof

• Signature proof

• Salary slips

• Recent bank account statements

• ITR with the income computation

• Audited balance sheet

• Recent bank statements

• Proof of turnover (service tax return/sales receipt)

• Completed application form with signature

• Latest passport-size photographs

• Appropriate Visa for studies abroad

Education Loans for Higher Education

• Eligible courses: Most education loans are available for courses like engineering, medicine, management, law, and other professional degrees. There are very limited courses available to students. Students can the education loans above.

• Eligibility criteria: Students usually need to have secured admission to a recognized institution. They can get loans based on their scores, the better the grades better the chances of getting the loan.

• Loan amounts: The loan amount can vary depending on the course, institution, and the borrower's eligibility.

• Repayment terms: Most of the time, repayment starts after the student completes their course or secures a job.

Government-backed Schemes

The National Scholarship Portal (NSP) and the Central Sector Scholarship Scheme for Minorities are two valuable resources for students seeking financial aid for higher education. While they are not education loans in the traditional sense, but they can provide significant financial support.

The NSP offers a range of scholarships and assistance programs, while the Central Sector Scholarship Scheme specifically targets minority students. Both schemes can help alleviate the financial burden of higher education and make it more accessible to eligible students.

Other Options for Financial Support in Education

While personal loans and borrowing from family or friends can be alternative options for funding education expenses, it's important to consider the potential drawbacks. Personal loans often come with higher interest rates and shorter repayment terms compared to traditional education loans. Borrowing from loved ones can create financial strain within relationships if not handled carefully. It's essential to have a clear repayment plan in place to avoid future conflicts and ensure financial stability.

Important Considerations Before Taking an Education Loan

• Interest rates: Education loan interest rates can vary, so it's important to compare different options.

• Repayment terms: Be aware of the repayment terms and interest calculation methods.

• Collateral: Some lenders may require collateral, such as property or a guarantor.

• Government schemes: Explore government-backed schemes that may offer more favourable terms or interest subsidies.