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Educational Loans – The Process of Repaying Them

13 Jun, 2012 By:admin in Education Loan,

 

Like everything else, cost of education is also on the rise. Getting higher education has become so difficult that students are left with no other choice than getting educational loans. Such loans are specially designed for students who want a part of their education (in India or abroad) to be funded by a financial institution on various terms. An educational loan typically covers expenses of tuition and examination fee as well as hostel and mess costs. Several banks also get on board to finance the cost of equipment, books and various instruments required for the completion of a particular course. 
Eligibility criteria for getting a loan varies from one bank to another, but the uniform paradigm is the confirmation of student's admission in an institute. Other criterions that vary in each bank are student's age, qualification, good academic record and the fixed source of income of parents. Another important factor most lenders consider is that the institute must be recognized. 
Likewise, maximum amount to lend also varies from one bank to another. Most banks consider the course program and the institution for which a loan is being sought; others come to decision after going through the monthly salary of the parents of the borrower. Some banks even have policies of offering 75 percent of the total cost of the course program. However, the loan amount solely depends on the relevant bank's discretion. 
Under Section 80 E of the Income Tax Act, banks allow a deduction in repayment of the loan. The amount is deductible for only full time higher education courses, professional courses and applied sciences programs. The deduction is available for up to eight years from the beginning of repayments.
The interest must be paid from the following month of loan disbursal whereas the principal amount is payable only after a specified amount of interest and principal amount has been repaid. The candidate must keep paying the amount of interest on his loan while studying. The repayment schedule is charted out by the bank and is based on various factors. It includes interest rates, monthly payment, term of loan repayment, payment due dates and total repayment obligations. 
While repaying the educational loan, one should always ensure that payments are made on time. When a borrower fails to make timely payments or meet the terms and conditions of the bank, he may face legal consequences. The lender will take legal action against the debtor and may withhold his income tax refunds. 
If he fails to make payments, the debtor will be left with a bad credit which will make him ineligible for any kind of future financial aid from all lenders. Therefore, one must follow a few suggestions in order to avoid such situation:
Go through the terms of loan thoroughly so as to fully understand it 
Keep the contact information updated so that bank can reach him any time
Automatic payments should be set up to avoid late repayments
If in need of help, contact the lender ASAP
Since the rules, regulations, repayment options, interest rates and others are, at times, revised by various lenders, it's advised to the borrower to be up-to-date with the changing policies of the bank, evolving market trends and various schemes on offer by the lender. 

Like everything else, cost of education is also on the rise. Getting higher education has become so difficult that students are left with no other choice than getting educational loans. Such loans are specially designed for students who want a part of their education (in India or abroad) to be funded by a financial institution on various terms. An educational loan typically covers expenses of tuition and examination fee as well as hostel and mess costs. Several banks also get on board to finance the cost of equipment, books and various instruments required for the completion of a particular course. 

Eligibility criteria for getting a loan varies from one bank to another, but the uniform paradigm is the confirmation of student's admission in an institute. Other criterions that vary in each bank are student's age, qualification, good academic record and the fixed source of income of parents. Another important factor most lenders consider is that the institute must be recognized. 

Likewise, maximum amount to lend also varies from one bank to another. Most banks consider the course program and the institution for which a loan is being sought; others come to decision after going through the monthly salary of the parents of the borrower. Some banks even have policies of offering 75 percent of the total cost of the course program. However, the loan amount solely depends on the relevant bank's discretion. 

Under Section 80 E of the Income Tax Act, banks allow a deduction in repayment of the loan. The amount is deductible for only full time higher education courses, professional courses and applied sciences programs. The deduction is available for up to eight years from the beginning of repayments.

The interest must be paid from the following month of loan disbursal whereas the principal amount is payable only after a specified amount of interest and principal amount has been repaid. The candidate must keep paying the amount of interest on his loan while studying. The repayment schedule is charted out by the bank and is based on various factors. It includes interest rates, monthly payment, term of loan repayment, payment due dates and total repayment obligations. 

While repaying the educational loan, one should always ensure that payments are made on time. When a borrower fails to make timely payments or meet the terms and conditions of the bank, he may face legal consequences. The lender will take legal action against the debtor and may withhold his income tax refunds. 

If he fails to make payments, the debtor will be left with a bad credit which will make him ineligible for any kind of future financial aid from all lenders. Therefore, one must follow a few suggestions in order to avoid such situation:

Go through the terms of loan thoroughly so as to fully understand it 

Keep the contact information updated so that bank can reach him any time

Automatic payments should be set up to avoid late repayments

If in need of help, contact the lender ASAP

Since the rules, regulations, repayment options, interest rates and others are, at times, revised by various lenders, it's advised to the borrower to be up-to-date with the changing policies of the bank, evolving market trends and various schemes on offer by the lender. 

 

Comment:(15)
on 01 Oct, 2017

I live in USA Texas and i am a happy woman today? I told my self that any Loan lender that could change my Life and that of my family, i will refer any person that is looking for loan to Them. If you are in need of loan and you are 100% sure to pay back the loan please contact them and please tell them that Mr Larry Moore, Sharon Coolidge referred you to them. foroxloaninvestment@gmail.com

on 27 Oct, 2016

Superbly ilnitulaming data here, thanks!

on 30 Apr, 2016

Dear Sir

How is the repayment month calculated for educational loan. our manager of a sbt says the repayment month calculated from the first year of a course.we got loan fir the course period of 2009 to 2013. but first year fee paid by us and got loan for remaining 3 years.the course completed and we start repayment from 2015 october. The banker says the repayment month calculated from 2010 and so remaining month is 112 months for 15 years. is this correct or not

on 08 Jan, 2016

Sir I am student of BMLT please give me loan sir

on 11 Nov, 2015

WE MAKE SPOT CASH PAYMENT from PVT.FINANCE AGAINST USED SECOND HAND CARS / BIKES IN GOOD CONDITION FROM DIRECT OWNERS IN BANGALORE ANY AMOUNT FINANCE AVAILABLE FOR ONLY 2% per Month ONLY.

1. We arrange on the spot finance and immediate on the spot cash payment against used second hand vehicles only in good condition without any accident-history and any loans pending on vehicle till the present date and we want freehold and loan-free vehicles in good condition only.

2. We arrange private cash from the money lenders from the private financiers on spot where vehicle-documents spot evaluation also verification of vehicles will be done and if at all found satisfactory it will be made ok and on the spot cash payment will be made from pvt.money lenders.

3. All the original documents of the vehicle along with form 29 and form 30 has to be duly filled to be given by the owner of the vehicle and importantly the vehicle has to be parked and left at pvt.financier's place only and only interested parties are welcome others excuse....

4. Rate of interest will be 2% per month and maximum within 6 months you have to settle the loan and take back the vehicle, and subjected to terms and conditions of the payment time taken by vehicle owners with private financier and finance requiring clients and transaction business is purely between financier & vehicle owners only clear to all.

5. Upto 60% - 70% of present day second hand vehicle market rate will be offered on spot against used vehicles and it must be Karnataka registered vehicles only.

6. We charge service amount and car finance brokerages of 4% fixed and final... And it is to be paid to us in cash amount only after financier is provided money against their second hand cars and we do business purely on the commission & brokerage fees only and interested parties only may need to approach and contact us and time pass people please excuse and do stay away from us clear........



IMPORTANT-NOTE:



Vehicle has to be strictly given and handed over to the Vehicles pvt.financiers and will be given or returned once the vehicle finance is repaid to financier from borrower and vehicle will be returned to customer same as it is earlier and it will be not used by anyone and it is only against vehicle and against vehicle documents cash finance will be provided to the customer.



Vehicle owners who is looking for vehicle finance only against vehicle documents are excused as we don't arrange against vehicle documents.

Contact details:

Venkatesh Rao
9480596969
Kumarswamy Layout, Bangalore

on 27 Oct, 2015

hello sir plz emarganes loan plz call me 88716210

on 26 Aug, 2015

Dear Sir & Madame
This message is to all who are in need of an emergency loan
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we gives minimum and maximum of 5000 - 5.7 million of any currency with very simple terms and interesting rate of 2%
Email: pnc.trust@onet.pl
Tel: +12025992680 FREE

on 26 Aug, 2015

You will be welcome contacting us,we give out capital to all in need of financial help, across the global. Are you looking for cash to pay off bills?,to start a small business,personal finance or company finance at a low interest rate of 2%
Car finance
Mortgage capital
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contact us via mail: pnc.trust@onet.pl
Tel: +12025992680 FREE

on 10 Aug, 2015

To those who are in needs of money. It caters Personal Loan, Vehicle loan, home loan and business loan.. Just visit for more information. See you there!

on 21 Jul, 2015

Education loans are a great way to realize the dreams of your future come true. There is no better way than to realize them and achieve your goal with them.

on 26 Dec, 2014

Poor students help in education

on 04 Dec, 2014

I applied a online education loan in BANK OF BARODA on the date 12 august 2014, but banks not passed bankloan till today, tell what can i do?

on 20 Nov, 2013

i need education loan lakhs. plz...
.

on 11 Jul, 2013

I need educational loan for 1lack just only for 1year

on 21 Jun, 2012

Offers you the Lowest Rate on Home Loans. Compare offers across Banks & Avail the Lowest Home Loan Interest Rate.

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