Fight Against Coronavirus   1. Wash Your Hands Frequently   2. Maintain Social Distancing   3. Avoid Touching Eyes, Nose and Mouth   4. Practice Respiratory Hygiene   5. Stay Informed and Follow Advice given by Your Healthcare Provider   6. If You have Fever, Cough and Difficulty Breathing, seek Medical Care Early             Dial National Helpline Number +91-11-23978046 or 1075
  1. Home
  2. 8 Important Do's and Don'ts for Education Loans

8 Important Do's and Don'ts for Education Loans
By Anupama Deshpande | May 10, 2018

Education Loan is one of the best ways of opening the doors for pursuing higher education by your deserving child. Majority of banks offer education loan with simple documentation, fast processing and at very attractive interest rates.



There are several do's and don'ts for Education Loan that the borrowers need to keep in mind so that they can avail the loan more easily and in a more cost effective manner.

(1) Do proper research for selecting the lending bank for education loan

As different banks offer education loan on different interest rates, it is very important to compare banks and choose the bank offering loan on the lowest interest.

(2) Consider other costs and items too

You must also take into account various other costs like loan processing fee, late payment charges, etc. while calculating actual cost of education loan. Further, you must also get to know as to how fast the loan will be processed by the bank and about the formalities and documents required for the processing of your loan application.

Suggested reading All about Education Loan Subsidy Scheme

(3) Read the Terms & Conditions very carefully

While signing loan agreement document, you should go through the terms & conditions very carefully and see that no important point is left out. Don't assume anything on your own.

(4) Do not involve any intermediary

Try to avoid getting education loan through any broker or intermediary as there are chances that they may mislead you considering their own profit. This will increase your cost unnecessarily.

(5) Do keep all the required documents ready before hand

After selecting the lending bank, you should get the checklist of various documents and formalities required by it to get the loan. You must keep all such documents ready so that your loan processing will be quick and in a hassle-free manner.

(6) Do not make any defaults in repayment

Don't ever make any default in repayment of loan. Be very careful in repaying the loan in time. If you make any default, you will not only be required to pay a penalty but it will also impact your credit score negatively.

Suggested reading How to Pay Rent through Credit Card?

(7) Do keep the margin money ready

Banks ask for margin money, if the loan amount exceeds Rs 4 lakhs. The margin is 5% for loan taken for study in India and 15% for loan taken for studying abroad. You must keep this amount ready with you.

(8) Do claim for income tax rebate

You can claim income tax rebate on whole amount paid as interest on education loan under section 80E of Income Tax Act for a maximum period of 8 years. Don't forget to take advantage of this benefit.

Share This :
About Anupama Deshpande
Anupama is a Co-Founder of CodeForBanks.com. She is an MBA (Finance) and Chartered Financial Analyst (CFA). She also carries a Fellowship degree in Life Insurance Sector and is a Master of Computer Application (MCA). She is an expert in Finance Field with an experience of over 18 years on different managerial positions in finance industry including Stock Market, Depository and Mutual Fund Sectors. Apart from that she has remained for few years in the field of marketing as well. Her suggestions and advice for investments have been very useful to many people.
Her vast interest & expertise in the field of finance have encouraged her to write the articles so that others can also get benefitted out of them. She never loses any opportunity to learn and be creative. She is a valuable asset for CodeForBanks.com & important resource to all those around her.

Popular Posts

ALL INDIA BANKS LIST
A B BANK LIMITED ABN AMRO Bank N V ABU DHABI COMMERCIAL BANK ALLAHABAD BANK
American Express Banking Corp ANDHRA BANK Antwerp Diamond Bank NV AU SMALL FINANCE BANK LIMITED
AXIS BANK B N P PARIBAS BANDHAN BANK LIMITED BANK OF AMERICA
BANK OF BAHARAIN AND KUWAIT BSC BANK OF BARODA BANK OF CEYLON BANK OF INDIA
BANK OF MAHARASHTRA BANK OF TOKYO MITSUBISHI LIMITED BARCLAYS BANK BHARATIYA MAHILA BANK LIMITED
Calyon Bank CANARA BANK CAPITAL SMALL FINANCE BANK LIMITED CATHOLIC SYRIAN BANK LIMITED
CENTRAL BANK OF INDIA CHINATRUST COMMERCIAL BANK LIMITED CITI BANK CITY UNION BANK LIMITED
CORPORATION BANK DBS Bank India Limited DCB BANK LIMITED DENA BANK
DEUSTCHE BANK DHANALAKSHMI BANK EQUITAS SMALL FINANCE BANK LIMITED ESAF SMALL FINANCE BANK LIMITED
EXPORT IMPORT BANK OF INDIA FEDERAL BANK FINCARE SMALL FINANCE BANK LTD HDFC BANK
HSBC BANK HSBC BANK OMAN SAOG ICICI BANK LIMITED IDBI BANK
IDFC First Bank INDIAN BANK INDIAN OVERSEAS BANK INDUSIND BANK
JAMMU AND KASHMIR BANK LIMITED JP MORGAN BANK JSC VTB BANK KARNATAKA BANK LIMITED
KARUR VYSYA BANK KOTAK MAHINDRA BANK LIMITED Krung Thai Bank Public Co. Ltd LAXMI VILAS BANK
MASHREQBANK PSC MIZUHO CORPORATE BANK LIMITED NORTH EAST SMALL FINANCE BANK LIMITED OMAN INTERNATIONAL BANK SAOG
ORIENTAL BANK OF COMMERCE PUNJAB AND SIND BANK PUNJAB NATIONAL BANK SBM BANK MAURITIUS LIMITED
SHINHAN BANK SOCIETE GENERALE SONALI BANK LTD SOUTH INDIAN BANK
STANDARD CHARTERED BANK STATE BANK OF BIKANER AND JAIPUR STATE BANK OF HYDERABAD STATE BANK OF INDIA
STATE BANK OF MYSORE STATE BANK OF PATIALA STATE BANK OF TRAVANCORE SURYODAY SMALL FINANCE BANK
SYNDICATE BANK TAMILNAD MERCANTILE BANK LIMITED THE BANK OF NOVA SCOTIA THE NAINITAL BANK LIMITED
UBS AG UCO Bank Ujjivan Small Finance Bank Limited UNION BANK OF INDIA
UNITED BANK OF INDIA UNITED OVERSEAS BANK LIMITED UTKARSH SMALL FINANCE BANK VIJAYA BANK
Woori Bank YES BANK ZILA SAHAKARI BANK LTD