Why Choose Lovely Professional University?
LPU is one of the leading institutes in the nation that offers various types of bachelor, master, and doctoral programs. LPU is a renowned institute that offers state-of-the-art infrastructure, experienced faculty, and holistic development, which attracts students across the country and several other countries. Industry partnerships, research, and innovation are indicators of the university's dedication to excellence.
Importance of Education Loans
Education usually comes at a high cost. Education loans play an essential role in filling the gap between the dream and affordability. They allow students to receive a high-quality education now without the immediate financial pressure of tuition and other costs. Educational loans for LPU students may include the following aspects:
- Tuition fees: These include hostel and accommodation charges
- Examination and library fees
- Book, Equipment & Laptop Purchase
- Expenses related to travel for study
Education loans allow students to focus on their studies and careers, knowing they can repay after completing their education.
Eligibility Criteria for Getting an Education Loan for LPU Students
Academic Requirements:
To be eligible for an education loan for LPU, students typically need:
- Enroll in a valid program at LPU by taking an entrance test or based on merit.
- Consistent academic performance as per the minimum percentage requirements of an individual lender
- In undergraduate programs, good performance is mandatory for study in postgraduate courses.
Age & Citizenship Conditions
- Candidates must be citizens of India.
- Although age requirements differ from bank to bank, we can say that the person applying must be between 18 and 35 years old.
- Usually, a co-applicant (typically the parent or guardian) is required if the applicant doesn't have a source of stable income or is not of legal age.
Vocational Courses Covered Under the Loan
Loan for Education in LPU generally covers:
- Bachelor Programs (B.Tech, BBA, B.Sc,. etc.)
- Postgraduate Programs( MBA, M.Tech, M.Sc., etc.)
- Vocational (e.g. Law, Architecture)
- Doctoral programs (Ph.D.)
- Courses related to vocational and skill development
However, make sure you check with a particular bank/financial institution which courses they are financing.
How to apply for an education loan for LPU?
Step 1: Select the Appropriate Bank or NBFC
Research and compare suitable banks or NBFCs offering education loans. Look for factors such as interest rates, tenure, processing fees, customer service, etc. Here are some of the major lenders:
- Public Sector Banks: State Bank of India (SBI), Punjab National Bank (PNB), Canara Bank
- Private Banks: ICICI Bank, HDFC Bank, Axis Bank
- NBFCs: HDFC Credila, Avanse Financial Services
Step 2: Verify your Eligibility for loan options
Before applying, make sure to check the eligibility requirements of the lender. Evaluate loan options using these criteria:
- Fixed or floating interest rates
- Maximum loan amount
- Repayment tenure
- Moratorium period
- Requirement of collateral
- Processing and prepayment fees
Step 3: Collect Necessary Documents
Collect all the required documents, which normally consist of:
- Admission letter from LPU.
- Scholarly files (mark sheets, confirmations)
- PAN card or any other government document.
- Co-applicant income proof (salary slips, IT returns)
- Bank statements
- Documents in respect of the collateral (if applicable)
Step 4: Apply for a Loan
Apply for the loan after filling out a loan application form online or visiting the bank branch. Attach the necessary documents and submit the file. To avoid delays, make sure all information is correct.
Step 5: Processing of loan and sanction
The bank will review your application, corroborate documents, and check the creditworthiness of the co-applicant. Once the approval is done, a sanction letter outlining the loan amount, rate of interest, repayment schedule, and other terms and conditions will be provided.
Step 6: Disbursement of Loan Amount
The bank will disburse the loan amount after the loan agreement is signed. Usually, the tuition fee is paid directly to LPU, and the rest of the expenses are credited back to your account on submission of the bills or receipts concerned.
Documents Required for LPU Education Loan Application
Academic Proofs
- Mark sheets and certificates of class 10, 12, and graduation (if applicable)
- Get the entrance exam scorecard (if it is applicable)
LPU Admission Confirmation
- LPU admission/ offer letter for your enrolled program
KYC Documents of Applicant and Co-applicant
- Proof of identity: Adhar card, passport, voter ID
- Proof of Address: Utility Bills, Rental Agreement, Passport
Income Proof of Co-applicant
- 3 months' salary slips
- 6 months of bank statements
- Income Tax returns or ITR for the previous 2 years
- Salary Certificate (Company Form 16)
Collateral Documents
For loans over a certain size, banks could require collateral. The documents required for collateral are:
- Property title deed
- Property valuation report
- Encumbrance certificate
- Not incorporated for business purposes (if any) from co-owners
Education Loan Available for LPU Bank List
Government Banks
- SBI (State Bank of India): Provides education loans through the SBI Student Loan Scheme with attractive interest rates and various repayment options.
- Punjab National Bank (PNB): Offers loans under PNB Saraswati and PNB Pratibha schemes, addressing diverse student requirements.
- Canara Bank: Provides education loans at low interest rates and low processing fees.
Private Banks and NBFCs
- ICICI Bank: Offers education loans of up to ₹3 crore, with an end-to-end digital application process and flexible repayment options.
- HDFC credit: Provides student loans customized based on the amount needed.
- Axis Bank: Provides education loans with competitive interest rates and swift processing.
Vidya Lakshmi Portal Options
Vidya Lakshmi Portal is a portal launched by the Government of India to facilitate students to apply online for education loans provided by various banks. It offers details on different types of loan schemes and helps you to apply easily.
LPU’s Associations with Banks for Education Loans
Advantages of choosing LPU’s Partner Banks
To provide education loans to its students, LPU has entered into partnerships with multiple banks. Partner banks include:
- Punjab National Bank
- State Bank of India
- ICICI Bank
- Central Bank of India
- Karur Vysya
Reasons to choose LPU’s Partner Banks:
- The simpler documentation process
- Quick loan approval and disbursement
- Specialized assistance from bank representatives knowledgeable about LPU's admission and fee structures
Campus Tie-ups for Fast-Track Loan Processing
Banks often set up branches or dedicate representatives on campus as part of LPU’s tie-up with banks; this ensures:
- Instant help with questions about loans.
- Document validation on the spot.
- Resolving loan processing issues immediately.
Tips to Improve the Possibility of Getting Loans
Keep Up with a Good Academic Track Record
The academic record of the applicant is one of the features that NBFCs and banks consider when approving an education loan. Here's why it matters:
- Merit-based admissions: Getting admitted through the entrance exam (like JEE, NEET, CLAT) only lends to your academic credibility.
- Stable Scores: Consistency in performance in Class 10, 12 and any undergraduate degree reflects seriousness towards the studies and is seen as a lower risk for the lenders.
- Higher Loan Limits: Students with a good academic record may sometimes have loans approved without the need for collateral for amounts that generally require security.
- Scholarships & Awards: The achievements or scholarships from LPU or any other outside body truly show excellence and reduce the financial risk for the lender.
Choose the Right Co-applicant
A co-applicant (most likely a parent, guardian, or spouse) is held legally responsible for repaying the loan if the student is unable to do so. The lender will be assessing the financial capacity of the co-applicant above the approval. Here's what to consider:
- Stable Income: The supporting co-applicant must be either employed or doing business, generating enough income that can help repay the loan. Usually, salary slips, ITRs, and bank statements are required.
- Good Credit score: A CIBIL score above 700 for the co-applicant can significantly boost approval chances.
- Low Existing Liabilities: If there are no ongoing loans or EMIs, the probability of having a good debt-to-income ratio increases, thus boosting the lender's confidence.
If you have an existing account, a history of savings, or have previously borrowed from the bank, that can positively influence you.
Repayment Terms & Interest Rates
Having clarity on how the repayments will work and what your monthly interest act will be will help you be responsible with your loan and avoid a financial burden after you graduate.
- Moratorium Period: Moratorium Period means the time when the borrower is not expected to commence repayment towards the loan. For LPU students, it typically includes:
- Moratorium Period (6 to 12 Months): A moratorium period is for the full term of the course and for 6–12 months after the course or employment, whichever is earlier in most of the banks.
- Interest payable: You either have a simple interest during the moratorium period (top-up interest during a moratorium period) where full interest, all interest, or a part of interest is waived off, or you almost always have it as compound interest.
Some banks give students the choice of pre-EMIs, where students can begin making small payments in the form of EMIs (just interest) while in school, which helps to reduce the overall burden after graduation
Loan Tenure & EMI Structure
Loan tenure is the maximum period during which the borrower can repay the education loan. Key points include:
- Typical Tenure: Up to 15 years with moratorium (varies across lenders)
- EMI Calculator: It is calculated based on the overall amount of the loan, the interest rate,, and the tenure. Higher Loan Tenure Invoice lower EMIs, but higher total interest outgo
- Flexibility: A few lenders provide step-up EMIs, where the payment increases gradually, with your income post-employment.
- Prepayment Options: A lot of banks offer part-prepayment or foreclosure without penalty always look at this clause when choosing a lender.
Subsidy schemes & Tax Exemptions
As a way to make higher education more affordable, the Indian government offers several subsidies and tax reliefs:
Interest Subsidy for the Central Sector (CSIS)
- Eligibility: Students from economically weaker sections (whose family income per year is less than ₹4.5 lakh).
- Benefit: Full interest subsidy during the course and moratorium period.
- Applicable Banks: Only loans borrowed from scheduled banks under the IBA Model Education Loan Scheme.
Ambedkar Central Sector Scheme
- Interest subsidy for EBC (Economically Backward Classes) and OBC (Other Backward Classes) category students for studying abroad.
- Minimum income and category-based eligibility must be met.
Tax Benefit under section 80E
- Who Can Claim: The student or co-applicant responsible for paying back the loan.
- Benefit: Entire interest paid on education loans is deductible (no upper limit)
- Term: 8 years or until the principal is paid off, whichever comes first.
