Is education an ‘essential item’? It may not be included in the list of such items, but the fact is it is an essential item. As all other items in the list, this too has been bitten by inflation and quality education is almost out of bounds for many because of the cost factors.

Consider this: The same engineering and medical degrees, which used to cost you Rs 2-3 lakh per semester earlier, now cost Rs 4-5 lakh. MBA costs more than Rs 25 lakh in premium colleges.

And, even if the student has managed to secure the coveted seat in a course of her choice, the cost of higher education has risen over the years and how. If you are a parent or a student looking for an education loan, this admission season, here are five things you better keep in mind.

Who can get a loan: Only Indian citizens can avail an education loan. It can be availed by the student with parents/guardians as co-applicants, or by the parent for a child for studies in India or abroad.

Loan options for courses and institutions: Most banks will give you an education loan, only if you meet certain criteria’s. This means, you can get loan if you are planning to study in a recognized institute, especially for courses which are in demand like MBA, medical studies and engineering and other vocational courses. If you are planning for an admission in a less reputable college or an offbeat course, it makes sense to get a loan from a cooperative bank or financial services institutes like Avanse. Institutes like these are more open to such courses compared to approaching a public sector bank.

Loan sizes vary: The size of the loan you can take will depend where you plan to study. For most courses in India, you can get a bank loan of up to Rs 10 lakh. For a course in a university abroad, the loan amount could go up to Rs 20 lakh. Other financial institutes which offer education loans like Credila and Avanse offer a higher amount of education loan. While some lenders may offer you 100 percent finance. There are those who ask you to set aside 5-15 percent of the loan amount as margin money. Almost all banks ask for a collateral or co-application in case of a higher loan amount, which is between Rs 4 lakh to Rs 7.5 lakh, depending on the lender. Any immovable property like your house, fixed deposits, insurance policies, National Savings Certificates and alike are accepted as collateral.

Fees and cost: If you are a female candidate, one way to reduce the cost of your loan is to take it from a public sector bank. They usually give a 50- 100 basis point discount on interest rate. The rate of interest varies amongst lenders and is usually in the range of 11 to 16 percent per annum. The processing fee is around 2 percent, but if you have secured admission in a premium course at a premium college where your future earning potential is high, you can also bargain with the lender to decrease or waive off the processing fees.

Loan repayment criteria: Student loan comes with a moratorium. This simply means the period during which you don’t need to repay the loan. This starts while you are studying the course and extends up to a year after the course is completed. If you get a job immediately after this period, the moratorium ends within six months of being employed. Once the moratorium period is over, you get seven years to repay the loan. But, we suggest that instead of utilizing the moratorium period, it’s better to start making payments even during the duration of the course. Reason being, with some lenders if you pay off the interest component of the loan during the course, you can get an interest waiver of up to 1 percent for the moratorium period.

Source: (https://tackk.com/xe95zt)

With the upcoming festive season, many of us tend to think about renovating our homes, or at least mull over giving it a fresh coat of paint. Sometimes though the hurdle can be finances, or rather lack of them. Instead of running from pillar to post for alternatives, it is simpler to evaluate a home improvement loan, a loan product that is designed specifically for this purpose. So whether you want to paint your house, carry out repairs, remodel or home or even construct an additional floor (in case of a house), look no further. Within this segment, what you should look for is the lender that offers you the best deal out there. Irrespective of season, you can give your house a facelift, and banish your financial woes at the same time.

What is a home improvement loan?

As mentioned above, this product can be availed of by any individual who wishes to renovate, or improve their home as the product suggests. Typically, most lenders agree to fund up to 80 percent of the renovation cost (basis the quotation you submit to them at the time of loan application), and the tenure or duration of the loan normally does not extend beyond 15 years. The interest rates for the product are competitive, and tend to work out far cheaper than say for instance a personal loan, with the interest rate being in the range of 9.5 to 10.5 percent, while a personal loan may cost you as much as 24 percent. A loan interest calculator can guide you best as to what will likely work for you. Your property is required to be kept as collateral security for this loan. Most banks however do not give loans for property that is older than 35 years. Loan repayment can be carried out via monthly EMIs, as with other loan products.

Who can avail of this loan?

Essentially, any individual house owner, but do keep in mind that only the registered owner of the property in question can avail of this loan. Banks and housing finance companies do extend this facility to new customers as well (those who do not have an existing housing loan with them) as naturally of course to existing customers. In the case of the latter, a lender is likely to give even 100 percent of the cost of repairs subject to a cap of not more than 80 percent of the property’s market value, while with a new borrower the limit may not exceed 90 percent, depending upon the loan amount requested for.
Tax exemption information
As with some other loan products, you can claim a tax exemption on availing of a home improvement loan as well, under Section 24(b) of the Indian Income Tax Act, 1961. The interest paid on the loan is tax deductible of up to Rs. 30,000 per financial year. This amount can be claimed within the Rs. 2.0 lac limit per financial year that is applicable for housing loan interest. Furthermore, both the home owner and co-owner can avail of this exemption.

Fees and charges
Most lenders do charge a Home Loan Processing Fees for this loan, normally ranging between 0.5 percent and 1.0 percent of the loan amount applied for. As per revised Reserve Bank of India (RBI) guidelines, a lender cannot penalize a borrower with charges should they wish to pre-close the loan before completion of tenure.
Documentation requirement
In addition to the standard identity proof and KYC documentation as per RBI guidelines, a lender will ask for the following when you apply for a home improvement loan:

Income proof
Bank account statements
Property documents
Documents and bills (certified by a qualified architect as per the lender’s terms)
Latest tax-paid receipts for the property in question
Proof of having filed income tax returns
An estimate for home improvement

[Source: https://www.creditsudhaar.com/blog/2016/09/07/this-festive-season-redo-your-house-through-a-home-improvement-loan/]