Want to pursue your professional course in your dream university, but wondering how will you fund it? Worry not! Opt for an education loan. Yes, education loans are designed by keeping aspiring students like you so that you receive the much needed financial support at the right time. Education loans can be availed to pursue higher professional or technical education such as medicine, engineering, management and the like, in India and abroad. Generally, education loan will cover your college tuition fees, exam and library fees, books and course-specific equipment including computer, accommodation charges, travelling expense if you have opted for a foreign university, along with other course-related expenses. It indeed provides the basic financial assistance required by students.
Alike other loans, a personal loan for study is also tagged with eligibility criterions, submission of mandatory documents, personal loan interest rate, loan tenure, the quantum of loan, loan security, and tax benefits. Among all, loan security is something that most students are caught unaware of. So, let’s take a quick look at this specific aspect of an education loan. According to RBI guidelines, you can avail a maximum of Rs.10 lakhs as a loan if you are opting for an Indian University, and a maximum of Rs. 20 lakhs if you are availing the loan for studying abroad. These guidelines also put forth the condition of loan security or requirement of collateral. If the quantum of your loan is within Rs. 4-lakh, then you can avail the loan without any security or collateral. But, if the loan amount exceeds R. 4-lakh, then you will have to provide collateral and a third party guarantee to the bank which in most cases is the parents of the student. A security or collateral is nothing but a risk mitigating step taken by banks to avoid loss in an untoward situation. But, in rare and special cases, banks do try to bend their rules for extraordinary and highly meritorious students by exceeding his or her limit of education loan without collateral. Most banks follow the Rs. 4-lakh slab to decide the requirement of collateral. However, there are a couple of banks which offer education loan without security for a higher loan amount ranging within Rs. 5-lakh to Rs. 7.5-lakh. So, if you are facing difficulty in arranging for collateral then you can always look for banks that have higher loan limit without collateral.
On the other hand, if you are a working professional wanting to pursue higher education then you also have the option of availing a personal loan for education.In addition, personal loans do not require any collateral, guarantor or security. In this way, you neither need to take a separate education loan nor need to worry about arranging for collateral.
Well, if the required education loan amount falls within the collateral free slab or if you have a personal loan, then you can fund your higher education without having to worry about any kind of security. So, bear in mind, availing a security-free education loan is certainly possible.