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How to Get Education Loan After 12th?

How to Get Education Loan After 12th?

Education is the key to a successful future, but the rising cost of higher education can often pose a financial burden on students and their families. This is where education loans come into play. Education loans are designed to provide financial assistance to students who wish to pursue higher education but lack the necessary funds. If you are a student planning to take an education loan after 12th, here’s everything you need to know.

Benefits of Education Loan

Education loans offer several advantages that make them an attractive option for students. Some of the benefits include:

Access to Education:

Education loans ensure that financial constraints do not hinder a student’s pursuit of higher education. It allows students from all economic backgrounds to follow their desired educational path.

Flexible Repayment Options:

Unlike other loans, education loans provide flexible repayment options. Repayment typically begins after the completion of the course or when the student secures employment. This alleviates the burden on students during their study period.

Lower Interest Rates:

Education loans generally have lower interest rates compared to other types of loans, making them more affordable for students and their families.

Building Credit Score:

Timely repayment of an education loan helps students build a positive credit score, which can be beneficial for future financial endeavours such as applying for other loans or credit cards.

Focus on Studies:

By removing financial barriers, education loans allow students to concentrate on their studies without worrying about tuition fees or other related expenses.

Eligibility for Education Loan After 12th

You have been a good student throughout, and now, you are looking for an education loan after 12th science, so what would you do? To be eligible for an education loan after class 12th, certain criteria must be met such as:

Citizenship:

The applicant must be an Indian citizen.

Completion of Class 12th:

The student should have completed their Class 12th examination from a recognised board or institution.

Admission to a Recognised University:

The applicant must have secured admission to a recognised university or college for further studies.

Documents Needed for Education Loan After 12th

To apply for an education loan after 12th, the following documents are typically required:

Mark sheets of Class 10th and 12th:

– These mark sheets serve as proof of the applicant’s academic performance.

KYC Documents:

– This includes proof of identity, such as an Aadhaar card, PAN card, passport, etc.

Admission Letter:

– The admission offer letter from the university or college where the student has secured a seat.

Fee Structure:

– A copy of the fee structure provided by the institution.

Income Proof:

– Income tax returns or salary slips of the co-borrower or guarantor to establish their repayment capacity.

Co-Applicant KYC Documents:

– KYC documents of the co-applicant or guarantor, if applicable.

Types of Education Loans Available After 12th in India

When dealing with education loans after 12th, applicants will usually encounter two different types.

These include the following:

1. Secured Loans

Secured education loans are also known as education loans with collateral. They require applicants to pledge an asset as security. Collateral is any valuable asset that the financial institution can legally claim if the borrower defaults. This could include tangible assets like a house, apartment, non-agricultural land, or shops, as well as intangible assets like life insurance policies, mutual funds, stocks, or bonds. Usually, secured loans allow you to pursue higher loan amounts since they reduce risk for the lender.

2. Unsecured Education Loans

Education loans after 12th can also be unsecured, or without collateral. These loans are commonly used to fund overseas education, but since they carry higher risk for the lender, they usually have shorter repayment tenures and higher interest rates. Unsecured loans are sanctioned based on the borrower’s and co-signer’s creditworthiness, income profile, and academic background.

Expenses Covered Under Education Loan

Education loans cover various expenses related to higher education. While these expenses may vary from bank to bank, here is a general list of items typically covered:

1. Tuition Fees:

The loan covers the tuition fees charged by the educational institution.

2. Insurance Premium:

Some education loans include insurance coverage for the borrower or co-borrower.

3. Hostel Fees:

If the student opts to stay in a hostel, the loan can cover hostel fees.

Cost of Books:

The loan can be used to purchase books and study materials required for the course.

Travel Expenses:

If the student needs to travel for their education, transportation expenses can be covered.

Examination and Library Fees:

Fees related to examinations and library usage can be included in the loan amount.

Caution Deposit:

Many educational institutions require students to pay a caution deposit, which can be financed through an education loan.

Laptop Expense:

Some courses may require students to have a laptop, which can also be covered by an education loan.

Step-by-Step Process to Get Education Loan After 12th

To get an education loan as a 12th pass student, here is a step-by-step guide to follow:

  • Research and compare loan options: First, thoroughly research and evaluate different education loan offerings from different lenders. Compare their policies, interest rates, repayment tenure, moratorium period, and eligibility criteria to find the best option.
  • Shortlist lenders: Based on your financial requirements, academic profile, co-applicant eligibility, and funding requirement, narrow down lenders that align with your needs.
  • Prepare your documents: Keep all the required documents ready and updated, including academic records, identity proof, income documents of the co-applicant, and your admission details.
  • Submit the loan application: Fill in the application form online through your lender’s website or visit the nearest branch if you prefer an offline application.
  • Loan sanction and disbursement: After your application goes through verification and approval, the lender issues a sanction letter. The loan amount is then disbursed directly as per the agreed loan terms.

How to Apply for Education Loan After 12th

Applying for an education loan online is a convenient and time-saving process. Here are the steps involved:

1. Visit the official website of the bank from which you wish to avail the loan.

2. Look for the education loan section on their website and click on “apply now.”

3. Fill out the application form with accurate details.

4. Upload the required documents for education loan, such as mark sheets, admission letter, fee structure, etc.

5. Review the application form and submit it online. The bank will then verify the documents and contact you for further processing.

Tips to Improve Chances of Education Loan Approval

If you’re looking to get a study loan after 12th, below are some tips that will improve your chances of approval:

  1. Maintain a good credit score: A good credit score improves eligibility and chances of approval. If you lack a credit history, your co-applicant’s CIBIL score will be assessed.
  2. Have a co-applicant: A financially stable co-applicant increases approval chances and could help you secure better interest rates and loan terms.
  3. Keep documents organised: Ensure all admission, identity, academic, and income documents are complete and accurate to avoid delays.
  4. Manage any existing debts: Try to reduce outstanding loans or dues to improve your debt-to-income ratio.

Conclusion

For most students, one of the most common queries is “How to get education loan after 12th”. Education loans provide a lifeline for students who aspire to pursue higher education but face financial constraints. They offer numerous benefits such as flexibility in repayment, lower interest rates, and building a positive credit score.

When applying for an education loan after 12th class, it is essential to fulfil the eligibility criteria and provide the necessary documents. Several banks in India offer education loans with competitive interest rates and flexible terms. To apply for an education loan, you can either go through an online process or visit your preferred bank branch offline. Education loans cover various expenses like tuition fees, hostel fees, book costs, travel expenses, etc., allowing students to focus on their studies without financial worries.

To explore further options and learn more about education loans visit Tata Capital’s website or download the Tata Capital App. Take advantage of their expertise and comprehensive range of financial products that cater to individuals’ diverse needs.

Remember, getting an education loan after the 12th is a significant step towards achieving your dreams. Make sure to choose the right loan that suits your requirements and financial capabilities.

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FAQs

Can I get an education loan after passing 12th in India?

Yes, we can get an education loan after 12th for undergraduate courses, diplomas, or even vocational studies from recognised universities or institutions. 

What is the minimum percentage required in 12th to get an education loan?

The eligibility for education loan after 12th changes based on the lender, and there is no fixed minimum percentage. Most financial institutions assess overall academic performance, course quality, institution reputation, and co-applicant financial profile.

What courses are eligible for education loan after 12th?

Study loans after 12th generally offer funding for courses for undergraduate degrees, professional courses, diploma programmes, and vocational courses that are accredited or recognised.

Is a guarantor or co-applicant mandatory for study loan after 12th?

Yes, many lenders require students to have a parent or guardian as a co-applicant to ensure repayment, especially since most students usually have no independent income.

Can I get a study loan after 12th for diploma or vocational courses?

Yes, education loans after 12th can provide funding for accredited diploma and vocational courses. However, the course and institute must be recognised by the relevant authorities.

Do education loans after 12th cover living and hostel expenses?

Yes, education loans after 12th in India generally cover the tuition, hostel fees, living expenses, books, equipment, and other related academic costs.

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