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Rising school fees strain families across India, but education loans offer financial relief. Learn eligibility, loan limits, and government schemes to secure quality schooling
School education loans typically go up to Rs 4 lakh without collateral, though some banks offer up to Rs 10 lakh. (News18)
Gaining admission to the country’s top schools is no longer just about merit; it’s becoming a question of affordability. Families across major cities like Delhi, Mumbai, Noida, and Bengaluru, as well as smaller towns in tier 2 and tier 3 regions, are struggling to keep up with soaring school fees. While fee hikes show no signs of slowing, parents can still ensure their children receive a first-class education by exploring education loans. Knowing the eligibility requirements and key details can make all the difference in making quality schooling accessible.
Can You Get A Loan For School Education In India?
In India, education loans are available to cover school education expenses from nursery up to Class 12. Though loans for higher education, such as undergraduate and postgraduate studies, are more common, many banks now offer loans specifically for school fees.
Public sector banks like the State Bank of India and Bank of Baroda, along with private banks including ICICI and HDFC, as well as certain financial institutions, provide such loans. These loans cover tuition fees, textbooks, uniforms, hostel charges, and other related costs, primarily aimed at families facing financial difficulties due to expensive private schooling.
What Is The Eligibility Criteria For School Education Loans?
Eligibility requirements vary between lenders but generally include:
- Indian Citizenship: The applicant (whether student or parent) must be an Indian citizen. Some banks extend loans to Non-Resident Indian (NRI) students holding valid Indian passports.
- Student Age: Loans are usually available for students aged between 3 and 18 years, though some banks require the student to be at least 16 years old.
- School Admission: The student must be enrolled in a recognised school affiliated with CBSE, ICSE, state boards, or international boards. Banks verify the school’s accreditation and reputation.
- Co-applicant: A parent or legal guardian with a steady income must act as a co-applicant.
- Income Limits: Under schemes such as the Central Sector Interest Subsidy (CSIS), the family’s annual income should not exceed Rs 4.5 lakh, while private banks may permit income limits up to Rs 8 lakh.
What Is The Loan Limit For School Education?
Typically, the loan amount for school education ranges up to Rs 4 lakh, although some banks offer loans up to Rs 10 lakh. Loans up to Rs 4 lakh generally require no collateral.
For loans up to Rs 7.5 lakh, security is provided under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL).
These loans cover:
- Tuition, hostel, and examination fees
- Books, uniforms, and other educational supplies
- Laptops or other essential equipment
- Travel expenses for students attending boarding schools
What Documents Are Required For Education Loan?
Applicants will typically need to provide:
- Student Documents: Aadhar card, PAN card, passport-sized photograph, and proof of school admission.
- Co-applicant Documents: Aadhar card, PAN card, proof of income (such as Income Tax Returns or salary slips), and bank statements.
- School Documents: Fee structure, bills, and recognition certificates.
- Security (if applicable): Property papers or other collateral documents.
Any Government Schemes/ Subsidies Available For Education Loans?
Several government initiatives offer benefits to borrowers:
- PM Vidyalakshmi Yojana: Provides collateral-free loans to meritorious students, with families earning up to Rs 8 lakh receiving a 3% interest subsidy.
- Central Sector Interest Subsidy (CSIS): Offers an interest subsidy during the moratorium period (the course duration plus one year) for families earning up to Rs 4.5 lakh annually.
- Vidya Lakshmi Portal: Enables students to apply for loans from multiple banks through a single application, simplifying the loan process.
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