What is Student Loan: Types, Eligibility and Interest Rate

A student loan is like a special kind of money that helps students pay for their education. It’s different from free aid like scholarships because students have to pay it back later.

This money can cover things like school fees, books, and living costs. The student is the one who borrows the money, and they agree to pay it back, usually after finishing school.

Sometimes, the government or private companies lend this money, and there’s usually an added amount called interest. Interest is like a small extra charge for borrowing the money.

Some loans start collecting interest while the student is still in school. When the student finishes school, they begin repaying the loan in monthly amounts.

what is student loan forgiveness?

Student loan forgiveness is like a special program that helps some people not have to pay back all or part of their student loans. There are different types of forgiveness programs, and each has its own rules.

One program is called Public Service Loan Forgiveness (PSLF), where if you work in certain jobs that help the public for a certain number of years, the remaining loan amount can be forgiven. Another one is for teachers in low-income schools, called Teacher Loan Forgiveness.

There’s also forgiveness if you’re on an income-driven repayment plan and make payments for a long time. If a school closes while you’re there, or if you become totally and permanently disabled, you might also be able to get your loans forgiven.

student loan schemes in india

Types of Student loan forgiveness

There are several types of student loan forgiveness programs designed to help borrowers manage their debt under specific circumstances. Here are some common types:

  • Income-Driven Repayment Forgiveness

    Income-Driven Repayment Forgiveness is a program that helps people who have student loans and are part of specific repayment plans based on their income. In these plans, the amount you pay each month depends on how much money you earn and your family size. After making payments for a certain number of years (usually 20 or 25), any remaining amount you owe might be forgiven.

  • Perkins Loan Cancellation and Discharge

    Perkins Loan Cancellation and Discharge are programs that help people with Federal Perkins Loans stop paying back part or all of their loans in certain situations. For example, teachers working in schools where many students come from low-income families may get a portion of their Perkins Loan forgiven for each year they teach, up to all of it after five years. Nurses, military members, and volunteers in programs like Peace Corps may also qualify for loan forgiveness. If someone becomes totally and permanently disabled, they could get their Perkins Loan canceled. These programs aim to assist individuals in specific jobs or situations by reducing their loan burden.

  • Public Service Loan Forgiveness

    Public Service Loan Forgiveness (PSLF) is like a helpful program for people with certain federal student loans. If you work in jobs that help the public, like for the government or at non-profit organizations, and you make 120 qualifying monthly payments (that’s around 10 years’ worth), you might be able to have the rest of your loan forgiven.

  • Teacher Loan Forgiveness

    Teacher Loan Forgiveness is a special program to help teachers with certain types of student loans. If you work as a teacher in schools where many students come from low-income families for five years, you may be eligible. The program is meant for those who teach full-time in elementary or secondary schools or work in special education. After completing these five years, you can apply to have a part of your student loans forgiven, meaning you won’t have to pay back that portion. The amount forgiven depends on what and where you teach. It’s a way to recognize and support teachers who dedicate themselves to helping students in need.

Student Loan Eligibility

  • Enrollment: Attend an eligible educational program, such as college or vocational school.
  • Minimum Enrollment: Usually require at least half-time enrollment.
  • Citizenship or Residency: Typically limited to U.S. citizens or eligible non-citizens.
  • Social Security Number: Need a valid Social Security number for federal student loans.
  • Academic Progress: Maintain satisfactory academic progress.
  • No Default: No default on previous student loans.
  • Financial Need: Some loans are need-based; determined through FAFSA.
  • Selective Service Registration: Males aged 18-25 must register with Selective Service for federal aid.
  • No Drug Convictions (for Federal Aid): Certain drug convictions may impact eligibility.
  • Loan Limits: Adhere to specified borrowing limits for federal student loans.

student loan interest rates

BankLoan AmountInterest Rate
Axis BankUp to Rs. 4 Lakhs15.20%
Rs. 4 Lakhs to Rs. 7.5 Lakhs14.70%
Loans greater than Rs. 7.5 Lakhs13.70%
Bank of BarodaFor all loan types and amounts8.50% onwards
Canara BankFor Vidhya Turant Loan Scheme6.60%
Up to Rs. 4 Lakhs10.40%
Rs. 4 Lakhs to Rs. 7.50 Lakhs10.40%
Loans above Rs. 7.50 lakhs10.20%
HDFC BankMinimum APR9.00%
Maximum APR13.86%
Average APR11.57%
Kotak Mahindra BankFor all loan types and amounts11.5% to 24%
Punjab National BankPNB Kaushal8.55% onwards
PNB Saraswati/Udaan10.30% onwards
PNB Pratibha (for admission to IITs, IIMs, and XLRI Jamshedpur)8.45% onwards
PNB Pratibha (for admission to other colleges)8.55% onwards
PNB Honhaar10.45%
State Bank of IndiaUp to Rs. 7.5 Lakhs10.25%
Above Rs. 7.5 Lakhs10.50%
AvanseFor all loan types and amounts10% to 16.50%
CredilaFor all loan types and amounts11.85% onwards
Allahabad BankAs per applicant’s profile9.20% onwards
Andhra BankAs per applicant’s profile10.80% onwards
Axis BankRs. 50,000 to 15 lakh12% onwards
Bajaj FinservUp to 25 lakh12.99% onwards
Bank of BarodaRs. 50,000 to 10 lakh10.50% onwards
Bank of IndiaUp to 10 lakh9.35% onwards
Bank of MaharashtraUp to 10 lakh9.70% onwards
CASHeRs. 9,000 to 3 lakh33% to 36%
Central BankUp to 20 lakh8.45% onwards
CitibankRs. 10,000 to 30 lakh9.99% onwards
Early SalaryRs. 8,000 to 2 lakh24% onwards
Federal BankUp to 25 lakh11.49% onwards
Fullerton IndiaUp to 25 lakhs11.99% onwards
HDFC BankRs. 50,000 to 40 lakh10.75% onwards
Home CreditUp to 2.4 lakh24% onwards
HSBC BankUp to 30 lakh10.50% onwards
ICICI BankRs. 50,000-20 lakhs11.25% onwards
IDBI BankRs. 25,000-5 lakhs12% onwards
IDFC FirstRs. 1 lakh-40 lakhs10.75% onwards
IndiabullsRs. 1000 to Rs. 15 lakh13.99% onwards
Indian BankAs per applicant’s profile9.20% onwards
Indian Overseas BankUp to 15 lakh10.30% onwards
IndusInd BankRs. 50,000-15 lakhs11% onwards
Kotak Mahindra BankRs. 50,000-20 lakh10.75 onwards
KreditbeeRs. 1000 to 2 lakh1.02% p.m. onwards
MoneytapRs. 3000 to Rs. 5 lakh1.25% p.m. onwards
MoneyviewRs. 10,000 to Rs. 5 lakh1.33% p.m. onwards
Muthoot FinanceRs. 50,000 onwardsVaries based on applicant profile
Punjab National BankRs. 25,000 to 15 lakh8.95% onwards
RBL BankRs. 1 lakh to 20 lakh14% onwards
Standard Chartered BankRs. 1 lakh-50 lakhs11.00% onwards
State Bank of IndiaUp to 20 lakhs9.60% onwards

Documents Required

  • Admission Proof: Admission letter.
  • Academic Records: Transcripts and certificates.
  • ID Documents: Aadhar, PAN, or passport.
  • Residence Proof: Utility bills or rental agreement.
  • Income Proof (if needed): Parents’ or guardians’ income.
  • Course Details: Curriculum, duration, fees.
  • Admission Fee Receipt: Payment confirmation.
  • Collateral Docs (if needed): Property or asset papers.
  • Photos: Passport-size photographs.
  • Bank Statements: Financial transaction records.
  • Tax Returns (if applicable): Income tax filings.
  • Co-borrower/Guarantor Info (if needed): Details of co-borrowers or guarantors.
  • Loan Application Form: Completed application.
  • Promissory Note/Loan Agreement: Signed agreement.
  • Caste Certificate (if applicable): For reserved categories.
  • Lender-Specified Docs: Any additional requirements.

How to Apply Student loan?

  • Research Lenders:
    • Explore banks, financial institutions, and government schemes offering student loans in India.
  • Choose the Right Loan:
    • Select a loan that suits your needs, considering interest rates, repayment terms, and eligibility criteria.
  • Check Eligibility:
    • Ensure you meet the lender’s eligibility requirements, including academic qualifications, course selection, and admission to a recognized institution.
  • Gather Documents:
    • Collect necessary documents, including proof of admission, academic records, and identification documents.
  • Apply Online or Offline:
    • Submit your application through the lender’s online portal or visit a local branch for offline application.
  • Fill out the Application Form:
    • Complete the application form with accurate details. Double-check for completeness and correctness.
  • Provide Collateral (if required):
    • Some loans may require collateral. Prepare documentation related to the collateral, such as property or assets.
  • Attend Counseling Sessions (if required):
    • Attend any counseling sessions mandated by the lender to understand loan terms, repayment options, and your responsibilities.
  • Await Approval:
    • Wait for the lender to process your application. Approval times may vary.
  • Sign Loan Agreement:
    • Once approved, sign the loan agreement or promissory note, agreeing to the terms and conditions.
  • Disbursement of Funds:
    • After completing all formalities, the loan amount is disbursed directly to the educational institution or to you, depending on the lender’s policies.
  • Monitor Repayment Schedule:
    • Keep track of your repayment schedule, interest rates, and any grace periods. Understand the repayment options available after completing your education.
  • Stay Informed:
    • Stay informed about any changes in interest rates, government schemes, or additional benefits for student loans.

Student Loan by Banks

  • Student Loan SBI
  • Student Loan Bank Of Baroda
  • Student Loan Union Bank Of India
  • Student Loan HDFC
  • Student Loan ICICI Bank
  • Student Loan Axis Bank
  • Student Loan IDFC First Bank

FAQs

Who can get a student loan?

Typically, students pursuing higher education, such as college or vocational training, can apply for student loans. Parents may also take out loans to assist their children.

Where do I get a student loan?

Student loans can be obtained from government agencies, private financial institutions, or educational institutions. Government loans often have more favorable terms.

When do I have to start repaying my student loan?

Repayment usually begins after graduation, leaving school, or dropping below half-time enrollment. Some loans offer a grace period before repayment starts.

What is the difference between subsidized and unsubsidized student loans?

Subsidized loans don’t accrue interest while the student is in school, and the government pays the interest during certain periods. Unsubsidized loans accrue interest from the time they are disbursed.

Can I get a student loan with bad credit?

Federal student loans typically don’t require a credit check. Private student loans may require good credit or a co-signer.

Can I pay off my student loan early?

Yes, you can usually pay off your student loan before the scheduled repayment period ends. Check for any prepayment penalties.

What happens if I can’t make my student loan payments?

If you’re struggling to make payments, contact your loan servicer to explore options like deferment, forbearance, or income-driven repayment plans.

How can I find out more about my student loan terms?

Review your loan agreement, check with your loan servicer, or visit the official student aid website for comprehensive information on federal student loans.

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These Interest rates are subject to change. It is advisable to check the latest rates below before applying for a Student loan with a particular lender or banks.

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Disclaimer

Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply Myworldstuffs partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

Disclaimer

The information provided in this article only for informational purposes. We strive to deliver accurate and up-to-date content, but please note that Some terms, offers, and regulations may change over time.