A student loan is a prudent choice to finance your academic aspirations independently. However, before embarking on the education loan journey, it is crucial to understand the types of student loans and the types of collateral for an education loan to make well-informed decisions. So, let’s explore the study loan options and education loan collateral types.
Key highlights:
- Why is a Student Loan a Prudent Choice?
- Types of Education Loan
- Based on Collateral
- Secured Education Loan
- Unsecured Education Loan
- Based on Location
- Student Loan International
- Education Loan Domestic
- Based on the Course
- Loan for Higher Education
- Executive Education Loan
- Skill Enhancement Loan
- FAQs
Why is a Student Loan a Prudent Choice?
An education loan is an amount that you can borrow from a financial institution to fund your studies in India or abroad. You can repay the student loan through simple interest (SI)/partial interest (PI) or Equated Monthly Instalments (EMIs). An education loan comes with multiple benefits. An education loan makes you Atmanirbhar by enabling you to finance your studies without depending on your parents or guardians, empowering you to achieve your academic goals independently.
It gives you the freedom to attend the best possible college and programme without being constrained by the lack of money, providing access to quality education. Rather than liquidating your family’s hard-earned savings, long-term investments, or assets, an education loan allows you to take care of expenses without sacrificing their financial security or emergency funds. Moreover, repayment of your student loan on time creates a healthy credit history in the early years of your life, establishing a basis for unlocking benefits when opting for other financial products such as a home loan, car loan or credit card.
Types of Education Loan
Based on Collateral
Secured Student Loans
You can opt for a secured loan for financing your education after pledging an asset as collateral.
- Types of Collateral for Education Loans
Some assets, such as residential property (apartment/house), fixed deposit, or life insurance, to name a few, can be offered as collateral to the lenders. Here, collateral acts as financial security for a student loan. You can choose from education loan collateral options depending on your preference and based on the collateral accepted as security by your chosen financial institution.
Unsecured Student Loans
If you don’t wish to offer any asset as student loan collateral, you can opt for an unsecured (without collateral) loan, as you don’t have to pledge any asset for this student loan. You can select between secured and unsecured student loans based on your financial requirements and preferences.
Based on Location
Student Loan International
Study abroad loan are made available for students desiring to study overseas in destinations such as the US, the UK, Canada, Germany, Australia and more. You must have been accepted to a well-ranked educational institution that has been approved by your chosen lender. Please remember, both abroad education loans without collateral and with collateral are available to students.
Education Loan Domestic
Domestic education loans are provided to students enrolling for admission to reputed Indian institutions. To be eligible for an educational loan in India, it is recommended that you secure admission to a college or university that is approved by the lender. You should check with the education loan provider ahead of time to ensure your preferred course or institution is covered.
Based on the Course
Loan for Higher Education
You can finance your bachelor’s or master’s studies at your dream university. You can pursue your education without sacrificing quality or cost.
Executive Education Loan
This student loan is dedicated to assisting working professionals to fund executive or management programmes where executive education would enhance their employability potential. You can invest in your future while supporting your career growth.
Skill Enhancement Loan
Upskilling courses will provide you with skills that help you stay up-to-date in today’s ever-changing job market. It will help you improve your expertise, stay competitive for potential recruiters and climb the corporate ladder. With enhanced skills, you can build your resume and respond to the current job market with confidence.
Also Check: Education Loan vs Self-Finance - Best Option in 2025
Frequently Asked Questions
Can I get 100% financing?
Yes, at Avanse Financial Services, we offer 100% financing which covers the holistic cost of education, including tuition fees, accommodation costs, travelling expenses, living expenses, the cost of learning devices and other education-related costs.
Which documents should I keep ready before applying for an education loan?
Here is a list of some important documents:
- For students:
- 2 colour passport-sized photos
- Photo ID
- Residence proof
- Date of birth proof
- Signature verification
- Academic documents
- Proof of admission
- Fee structure
- For co-applicant:
- 2 colour passport-sized photos
- Photo ID
- Residence proof
- Date of birth proof
- Signature verification
- Income proof
- Collateral-related documents (only for unsecured student loans)
- 8-month bank statement
- Relationship proof
Are there any online tools I can use to check the estimated EMI or the amount of loan I am eligible to borrow?
Yes, you can try the following calculator available on our website:
- Education Loan EMI Calculator: This online EMI calculator is super easy to use. You can try different combinations of tenure and education loan amounts to find the most suitable EMIs to make wise decisions.
- College Course Expense Calculator: If you want to find out how much your education will cost you, you can use this online calculator. It will help you understand potential college expenses.
- Eligibility Calculator: If you wish to understand the approximate student loan amount you are eligible to borrow based on your current finances, you can try this calculator.
With this information, you are set to make smart decisions. If you have any queries about student loans, an education loan interest rate or your academic journey, please don’t hesitate to contact us. We will be glad to assist you.
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