Education Loan For CA

Chartered Accountancy is among the highest-paid professions. However, it demands rigorous academic training and significant investments. For ambitious students, these cumulative costs shouldn't become barriers to achieving professional excellence. A strategically designed Education Loan can empower aspiring CAs to access quality education and focus entirely on their studies without compromising on resources due to a lack of money. Keep reading to learn more!

Why Consider an Education Loan for CA Students

Given the substantial cost of pursuing a CA course in India or overseas studies, a loan for education is a smart choice to avoid paying up front. Low-interest student loans from reputed NBFCs and banks help spread out the expenditure across manageable monthly EMIs.

Financial institutions offer features such as quick approvals and minimal documentation, making the application process easier. Plus, lenders also offer additional benefits such as the moratorium period; this period establishes that you can start repaying your loan only after the completion of your course (varies from lender to lender). All of these reasons make an Education Loan a viable and secure option for aspiring students.

Cost of Pursuing a Chartered Accountancy Course in India

To become a Chartered Accountant in India, you must complete a 4-year academic course mandated and regulated by the Institute of Chartered Accountants of India (ICAI). This includes three levels, namely the foundation course, the intermediate course and the final course. The approximate expenditures associated with each level are as follows:

• CA Foundation Course: Approximately ₹10,000. 

• CA Intermediate Course: Approximately ₹18,000 and an additional student activity fee of ₹2000. 

• CA Final Course: Approximately ₹22,000, with an additional ₹3300 required as an exam fee. 

Potential Additional Costs

You could face some other associated expenditures, like:

• Articleship registration charges of approximately ₹2000

• IT training of approximately ₹7500

• Soft skills training program of approximately ₹7000

• Tuition fees

• Study materials

• Living expenses (if you opt to relocate)

All things considered, the total cost of pursuing a CA course in India can be around ₹4 Lakhs. Fortunately, it's possible to finance it with an Education Loan tailored for CA aspirants.

Key Features of an Education Loan for CA Students

Here are some features that make a loan for education a smart financial solution:

• High Loan Amount: Given the substantial expenditures, a high amount is imperative to cover all the expenses of a CA course effectively, and an Education Loan can provide you with just that. 

• Minimal Documentation: You don’t have to get into lengthy paperwork to apply for an instant Student Loan for a Chartered Accountancy course. Most lenders allow you to apply easily with minimal documentation. 

• Competitive Interest Rates: Low-interest loans allow you to minimise the overall cost of borrowing and enable affordable repayment without straining your monthly budget. Fortunately, most lenders offer their loans for education at competitive interest rates.

• Flexible Repayment Options: With the advantage of flexible repayment tenure offered by most NBFCs and banks, an Education Loan helps you manage your money in a way that's tailored to your needs.

• Moratorium Period: Many lenders offer a moratorium period, thanks to which you're required to start repaying your monthly EMIs only after it passes. It ends 6 or 12 months after the course period, helping you focus on the courses conducted instead of on the stress of EMIs.

Eligibility Criteria for Education Loan for CA

Before applying for an Education Loan for a CA course, it's essential to understand the eligibility requirements. Most lenders have standardised criteria to ensure responsible lending, which every borrower must understand:

• Age Requirement: Applicants must typically be between 18 and 50 years of age. Since most CA foundation students are young, this age bracket accommodates early career aspirants.

• Co-applicant Mandate: A co-signer (usually a parent or guardian) is mandatory for Education Loans. They should have a stable income source and a good credit history to get the loan approved.

• Academic Qualifications: Students must have completed at least their 12th Standard and secured admission for the CA course to be eligible for the course financing.

Documents Required for an Education Loan for CA

Having the right documentation ready beforehand can significantly expedite your loan approval and help you secure funding without unnecessary delays. Here’s a breakdown of the documents you’ll need:

For the Applicant:

• KYC Documents: Valid identity proof (Aadhaar Card, PAN Card, Passport, Voter ID) and address proof (Aadhaar Card, Utility Bills, Bank Statement)

• Academic Records: Mark sheets and certificates from 10th, 12th, and any higher education completed

• Institute Admit Letter: Admission confirmation from the institute (if available at the time of application)

• Entrance Test Results: Chartered Accountancy Foundation exam results or any relevant entrance test scores (if applicable)

For the Co-applicant:

• KYC Documents: Identity proof and address proof

• Employment Proof: Employment certificate, appointment letter, or business registration

• Income Proof: Last 6 months' salary slips, Form 16, ITR for the past 2-3 years

• Bank Statements: Last 6 months' bank statements

EMIs and Interest Rates on Education Loans for CA

Choosing the right loan terms can significantly impact your financial journey as a CA student. Let's explore the key aspects of EMIs and interest rates that will help you make an informed borrowing decision:

• Interest Rate Range: Your interest rates will differ based on the lender, your credit profile, and other factors. Generally, it ranges from 8.5% to 14% per annum; at Poonawalla Fincorp, it starts at 11%.

• EMI Calculation: Your monthly EMI depends on three factors: loan amount, interest rate, and repayment tenure. Ensure you calculate the potential EMI with our online EMI calculator .

• Repayment Tenure: Most lenders offer flexible repayment periods ranging from 3 to 10 years, allowing you to choose EMIs that align with your post-qualification earning potential.

Things to Consider Before Applying for a Loan for Education

Here are a few points to consider before applying for an Education Loan for CA : 

• Assess Your Needs: Get an estimate of your total expenses over the entire course period and select a lender that offers a high amount.

• Maintain a Good Credit Score: Check your latest credit score before you apply for an Education Loan. A high credit score above 750 automatically makes you eligible for favourable loan terms. 

• Secured or Unsecured Loan: Decide whether to opt for a secured loan, which typically offers lower interest rates and higher loan amounts, or an unsecured loan, which provides faster processing but may have slightly higher interest rates.

How to Apply for an Education Loan

Here’s a step-by-step guide on how to secure an Education Loan once you've found a lender of your choice:

• Visit Lender's Website: Go to the official website of your chosen lender.

• Check Eligibility: Check that you fulfil the criteria set by your selected lender. In general, for an Education Loan, you must be between 18 and 50 years old and must apply with a co-signer.

• Prepare Documents: Check the list of documents required to submit with your Education Loan application. Prepare these beforehand to upload online during the application process.

• Online Application: Complete the online application form with accurate personal, academic, and financial details

• Upload Documents: Upload all the required documents through the online portal.

• Application Review: The lender will review your application and may contact you for additional information or clarification.

• Credit Assessment: Your credit score and the co-applicant's financial profile will be evaluated.

• Loan Approval: Upon successful verification, you'll receive loan approval with terms and conditions.

• Loan Agreement: Sign the loan agreement digitally or visit the branch to complete formalities.

• Disbursement: Funds will be disbursed directly to the institute or your account as per the agreed terms. 

To Conclude

Chartered Accountants not only need to study hard, but they also need to incur significant expenses associated with passing the multi-level CA course. All the reasons above make the Education Loan a smart choice to finance the expenses of your CA course, helping you get closer to your dream with less stress.  

Poonawalla Fincorp offers an Education Loan with collateral security requirements for loans up to ₹1 Crore. You can apply online with minimal documentation and get approval for your loan within minutes! 

Frequently Asked Questions

Is an Education Loan available for CA students?

Yes! Many Indian banks and NBFCs offer tailored loan options to support students pursuing Chartered Accountancy from the foundation level onwards.

What loan amount can I get for a chartered accountant's course?

Most lenders offer Education Loans ranging from ₹50,000 to ₹20 lakhs for CA courses, depending on the course expenses and your financial profile. Poonawalla Fincorp offers up to ₹1 Crore collateral-free Education Loan.

What documents are required for an Education Loan for a chartered accountant’s course?

To apply for an Education Loan, you require the following documents -

• Student:

  • KYC documents

  • Institute Admit Letter (if available)

  • Entrance Test Results (if available)

  • Past Academics

• Co-applicant:

  • KYC

  • Employment Proof

  • Bank Statement, Pay slip, Form 16

Is collateral required to get an Education Loan for the CA course?

Unsecured Education Loans for CA students do not require collateral security and are based on the borrower's creditworthiness. However, this depends on your lender. Poonawalla Fincorp offers up to ₹50 Lakh of Education Loan for domestic studies without any collateral, and up to ₹3 Crore for international studies with collateral.

What is the repayment tenure for chartered accountant students on an Education Loan?

The repayment tenure for Chartered Accountants typically ranges from 5 to 10 years. Poonawalla Fincorp offers a repayment tenure on an Education Loan of about 15 years.

Is there any concession for girl students on the Education Loan?

Yes, there are often special concessions for female students to promote women's education and empowerment. Some lenders may also give concessions in interest rates for girl students under Maha Scholar Education Loans.

Can I get a tax benefit on the interest paid for a CA Education Loan?

Yes, you can get a tax benefit, as the interest paid on an Education Loan for CA is eligible for tax deductions under Section 80E. This benefit is available for up to 8 years from the year you start repaying the loan with no upper limit on the deduction amount.

Is a co-borrower compulsory for education loans?

Yes, most lenders require a co-borrower (typically a parent or a guardian) for Education Loans. This helps students secure loans at better terms and reduces the lender's risk.

Can I use an Education Loan for higher education abroad in chartered accountancy?

Absolutely! Education Loans can be used to finance higher education programs abroad, including international chartered accountancy courses and CPA programs. Many lenders offer dedicated overseas Education Loan schemes with higher loan amounts to cover all study-related expenses.

What if I don't have all the required documents ready at the time of application?

You can still initiate your loan application with the basic documents like KYC and academic records. Lenders typically allow you to submit other documents such as entrance test results, final admit letters, or updated income proof during the processing period as and when they become available.