A marksheet loan is also known as an education loan or a student loan. Thanks to the push from the central government and Reserve Bank of India (RBI), public sector lenders and a fair share of private lenders have come up to the rescue. They offer marksheet loans for meritorious students willing to shape their careers by studying in the leading universities but require financial assistance.
If you are a student or a parent, here’s all you need to know about marksheet loans – how to apply, eligibility, documents required and interest rates. Read on!
A marksheet loan is for students who want to pursue post-secondary educational courses from accredited colleges and universities. However, their financial position does not allow them to bear the fees and other incidental costs. A marksheet loan is different from regular loans because repayment is deferred for the entire tenure of the course, and the borrower does not need to pay any instalments till the completion of the degree or course.
Moreover, some lenders even provide an extended moratorium period ranging from 6 to 12 months after the course completion. That’s not all! You don’t need to provide any collateral security for marksheet loans, though there’s an upper limit. Moreover, the borrower gets a tax deduction under section 80E on the interest portion of the instalments.
Availing of a marksheet loan is not an uphill task; lenders have kept the process relatively simple, and some even entertain online applications. Following is a step-by-step guide to applying for a marksheet loan:
Before applying for the loan, the borrower should sit down and create a semester-wise estimate of all the costs incurred during the course. This includes the institution’s fees, accommodation expenses, transportation, food, library, and other incidental costs. Remember your estimate should be reasonable and backed by supporting documents.
Visit the lender to discuss your requirements with them and fill out the application form. Alternatively, you can apply for a marksheet loan by filling out the online application foremost lenders provide. Provide all the proofs and documents required for the application and submit the application for review. Documents include the various proofs we discussed earlier like KYC documents, admission letters, guarantor details, copies of mark sheets, etc.
The lending institution will evaluate your loan application and decide whether to accept your application and sanction the requested amount or reject the application. The lender may ask for some additional documents or explanations while evaluating the loan application.
The lenders directly disburse the loan amount in instalments to the institution or the college, and they will not disburse the loan amount in your account. Before disbursement, you have to submit a disbursement request from your side accompanied by a demand letter from the institution/college.
|Bank’s name||Interest Rate|
|State Bank of India||7.25% p.a. to 9.65% p.a.|
|ICICI Bank||10.50% p.a. – 15.50% p.a.|
|HDFC Bank||9.55% p.a. – 13.25% p.a.|
|Canara Bank||7.30 % p.a. to 9.30% p.a.|
|Union Bank of India||9.70% p.a. to 10.95% pa|
|Bank of India||9.05% p.a. to 9.85% p.a.|
|Punjab National Bank||7.40% p.a. and above|
|Axis Bank||13.70% p.a. to 15.20% p.a.|
Note: marksheet loan interest rates for different banks keep changing; thus, be advised to check the latest rates on the bank’s website.
Students who want to pursue their dream courses but are holding back because of financial constraints should consider taking a marksheet loan. Marksheet loans are intended to arrange for the tuition fees, expenses on library and books, living expenses, food expenses, etc., for the entire course duration. Moreover, there’s no liability for repayment while pursuing the course.
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Ans: Yes, a guarantor is mandatory for a marksheet loan. Your spouse/ parents/ guardian must take a personal guarantee and sign the guarantor’s form.
Ans: Collateral security must be provided if the loan amount exceeds Rs 4 lakhs. You can avail a marksheet loan of up to 4 lakhs without providing college security.
Ans: No, banks do not ask for original mark sheets; they only ask for copies of applicants’ 10th and 12th mark sheets to evaluate their academic performance.
Ans: The applicant must be a resident within the age limit of 18-35 years. The course must be approved by UGC/Govt./AICTE etc. You must have a confirmed admission letter and a good academic record.
Ans: You and the guarantor will start receiving notices. The same can be confiscated if you have provided collateral security for the loan. Moreover, your Cibil score would be negatively impacted, and you won’t be able to take any loans in the future as your name will appear on the CIBIL defaulter’s list.
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