Admission to an IIT is a significant academic milestone for any student. Students from middle- and low-income families may require financial support to afford quality higher education. In addition to tuition fees, several other expenses often arise during admission to IITs. Taking an Education Loan can help students manage all education-related expenses comfortably, without facing financial constraints.
If you’re planning to pursue an IIT education, understanding how an Education Loan works can make the process easier and stress-free. Read this blog to know more!
Unique Features of Education Loans for IIT Students
Lenders offer special loan products for IIT students that often come with distinct features and advantages. Here are some of them:
Lower Interest Rates for Premier Institutions
For students admitted into prestigious universities like IITs, the majority of banks and NBFCs provide favourable (lower) interest rates. Because of their excellent placement records, these institutions are considered low-risk, which frequently leads to favourable lending terms. However, the borrower's and lender's profiles still determine the precise rate.
Student-Friendly Loan Structure
Education loans often include a moratorium period that lasts for the length of the course, along with twelve months following graduation. This reduces the financial strain on students while they are studying by giving them time to find work before EMI repayment starts.
Collateral-Free Loan Options
Some lenders offer collateral-free education loans for IIT students up to certain limits. This improves accessibility to loans for those without adequate assets. However, a co-borrower may still be required in most cases.
Government-Backed Education Loan Schemes for IIT Students
To increase access to financing for higher education, the Indian government has launched a number of initiatives. This is especially for students from economically disadvantaged backgrounds, including those attending IITs:
Role of the Government of India in Education Finance
The Government of India facilitates education financing through policy-backed loan schemes and interest subsidies. These schemes are usually implemented through government-approved banks and lenders.
PM VidyaLakshmi Education Loan Scheme
The PM VidyaLakshmi initiative, launched by the Ministry of Education, aims to simplify the process of applying for an Education Loan for higher studies. It offers a single online application platform that allows students to apply for loans with multiple scheduled banks simultaneously through the PM VidyaLakshmi portal. Students can visit the portal to apply for Education Loan financing from participating banks and lenders.
Interest Subvention Benefits
Interest subvention is a government benefit under which the government pays or subsidises a part (or all) of the interest on a loan for a specified period. This is usually during the course duration and moratorium period.
This benefit is available under select government schemes to qualifying students who may not be able to afford repayment instantly after their education. Examples of such schemes are the Central Sector Interest Subsidy (CSIS) Scheme and Padho Pardesh Interest Subsidy Scheme.
Expenses Covered Under Education Loans for IIT Students
Education loans offered by banks and NBFCs for IIT students generally cover a defined set of academic and related living expenses.
Tuition Fees and Core Academic Costs
Education loans typically cover the tuition fees charged by the institute in full. Also, mandatory academic expenses, such as laboratory fees, examination fees, and other compulsory course-related charges, are usually included in the loan amount. This coverage aligns with the standard Education Loan guidelines followed by Indian banks and financial institutions.
Other Education-Related Expenses
Education loans also cover expenses for hostel and accommodation, mess fees, books, study materials, and equipment needed for studies. Subject to the lender's conditions and specified limits, these charges are recognised as acceptable education-related costs under the majority of student loan policies.
How IIT Students Can Apply for an Education Loan
IIT students can now apply for education loans more easily and mostly online.
Digital and Online Application Process
Most education loans for IIT students can be applied for online. Platforms such as the PM VidyaLakshmi portal offer a digital application process that reduces paperwork and saves time. Students can submit applications, upload required documents, and track the status of their loan online through the lender's platform.
Submission of Details and Verification
Applicants must provide admission confirmation, course details, and basic financial information. Banks or lenders verify these details to assess loan terms and repayment structure. Providing accurate information helps prevent delays during processing.
Loan Approval, Disbursement, and Repayment Period
Once the loan is approved, the amount is disbursed according to the institute’s fee schedule. Repayment typically begins after the completion of the course and the end of the moratorium period. This gives students sufficient time to complete their studies and plan their finances. Clear repayment timelines help borrowers manage their obligations effectively.
Read Also: How to Apply for an Education Loan After Completing 12th Class.
To Conclude
The Education Loan provided to IIT students ensures that financial constraints don’t hinder the growth of academically talented minds. These loans often offer relatively lower interest rates for eligible students along with flexible repayment options. With Government schemes like the PM VidyaLaxmi Scheme, these loans are now available at subsidised rates, making them more affordable.
By understanding loan features, covered expenses, and the application process, students can make informed decisions and pursue their education with confidence. Fund your higher education expenses with Poonawalla Fincorp’s Education Loan up to ₹3 Crore and ensure that financial burden never becomes a source of stress.
FAQs
Who is eligible to get a guarantor-free Education Loan?
Students admitted to recognised premier institutions may be eligible for guarantor-free Education Loans. This is subject to lender-specific terms and loan limits.
Can I get a 100% Education Loan?
A majority of academic expenses can be covered by an Education Loan. However, the complete coverage will vary depending on the lender, the amount of the loan, and the list of approved expenses. Most lenders have a maximum loan limit depending on various factors.
Who is eligible for the PM VidyaLakshmi Yojana?
Any student admitted to a recognised institution for higher education can apply through the PM VidyaLakshmi portal. Final loan approval is subject to the bank’s eligibility criteria.
Is financial support available for meritorious students from all over India?
Yes, the Government of India and participating banks offer schemes to enable meritorious students nationwide to pursue quality higher education.
Do special loan products exist for students admitted to top institutes?
Yes, some special loan products provide lower interest rates and student-friendly repayment terms for students at premier institutions like IITs.
We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply