What is the moratorium period in education loan?⌄
Moratorium = course duration + 6 to 12 months (varies by lender). During this period, you don't need to pay full EMI. You may choose to pay simple interest only (recommended — reduces principal) or defer completely. Full EMI starts after moratorium ends.
Is collateral required for education loan?⌄
Up to ₹7.5 Lakh: no collateral (covered under government CGFSEL scheme). ₹7.5L to ₹15L: third-party guarantee. Above ₹15L: tangible collateral (property, FD). Some premium institutions (IITs, IIMs, Ivy League) may get higher unsecured limits.
Which courses are eligible for education loan?⌄
All UG and PG courses from recognised universities — engineering, medicine, law, MBA, arts, science. Professional courses: CA, CFA, ACCA. Vocational and skill courses from approved institutions. Overseas: any institution recognised in that country.
Can NRI parents apply for education loan for children in India?⌄
Yes. NRI parents can be co-applicants for education loans for children studying in India. NRE/NRO account statements and overseas income proof are required. The child (student) is the primary borrower.
Who can claim Section 80E deduction?⌄
The person repaying the loan claims the deduction. If the student repays after getting a job, the student claims 80E. If parents repay, they claim it — provided the loan was taken in their name as co-borrower. Interest only (no principal) is deductible. No upper limit. Available 8 consecutive years.
What happens if the student doesn't get a job after course?⌄
Inform the bank immediately. Options: (1) Extend repayment tenure, (2) EMI holiday for 6 months, (3) Interest-only payment for a period. Banks generally work with borrowers who communicate proactively. It is always better to negotiate than to default.
Can education loan cover coaching institute fees?⌄
Education loans are primarily for full-time degree courses. Coaching-only fees (like UPSC coaching) are generally not covered. However, if the coaching is part of an approved course at a recognised institution, it may be included.
What is the repayment tenure for education loans?⌄
Typically 10–15 years from start of repayment (after moratorium). Longer tenure reduces EMI burden when you're starting your career. As income grows, you can make prepayments to reduce total interest.