Axis bank was established in the year 1994 as a UTI bank, and since then, the bank has been a leading lender in the education space. It has been a leader in disbursing student loans for abroad education since the time of its inception, and the borrowers have instilled a sense of security while taking loans from Axis bank. The bank’s lending range has been its USP since the days of globalization reforms, and it has a wide array of loans from Rs 50,000 to Rs 40,00,000. Axis bank education loans provide attractive interest rates on the loans and also give a considerably long loan tenure.
Eligibility for Education Loans From Axis Bank
Axis bank has laid down the following eligibility criteria for Education loans for Abroad Studies:
- Applicant can be an Indian citizen or an NRI, but the co-applicant must necessarily be an Indian citizen.
- The co-applicant’s CIBIL score must be more than 700.
- The minimum acceptable marks in Higher Secondary examination and Graduation is pegged at 50%.
- The co-applicant’s salary is also considered as it must be enough to pay the simple interest during the moratorium period.
- Not all institutions abroad in foreign countries are of great repute. So it must feature in the bank’s eligible list to get a loan sanctioned. Axis bank also maintains a categorical list of educational institutions for loan purposes.
- The co-applicant should have a minimum of three years of ITR or two years of Form-16.
- The Documents for collateral security (in secured loans).
- The candidate must have secured admission through the entrance test/merit-based selection process.
- The document of regular income must also be produced, and it can be of parents/siblings/guarantor.
Benefits of Taking an Education Loan for Abroad Studies
No financial stress at the time of education
There are loans wherein you might have to start the repayment in the midst of the education, but Axis bank gives the option of starting the repayment post the completion of the degree. The financial stress is not only because of the tuition fee. It’s the cost of living abroad that takes a toll on the finances. Another factor that adds up to financial stress is the exorbitantly high-interest rate on loans, but Axis bank education loans start from 8.99%.
The ease of getting a loan from Axis Bank
Many financial institutions take a long time to process and approve the loan, but Axis bank makes sure that the whole process is completed in 7-8 days. Axis bank also provides loans to those students who can’t pledge collateral, and a loan amount up to Rs 40,00,000 is granted. It also depends on the institution where a student has secured admission, the rate of interest, and other factors that get affected in the case of top institutions of the world.
Extended Loan Tenures
Extended loan tenures from Axis bank can be up to a time span of 15 years. Several banks are keeping the loan tenures at 5-7 years, which directly impacts the EMI. Axis bank understands the concern, and the moratorium/repayment holiday begins six months past the completion of the degree. This helps students in getting a job and settle before starting the payment.
Tax Benefits Associated With Axis Bank Education Loans
Under section 80E of the Income Tax Act, tax benefits help the borrower save a ton of money. The money thus saved brings down the effective interest rates chargeable on loans. The cost of a loan reduces substantially, and there is no limit on the quantum of money for which exemption is claimed.
How does the pre-admission sanction letter from Axis Bank help students?
There are several advantages associated with a pre-admission sanction letter.
- A pre-admission sanction letter helps students in narrowing down their choices for the university. Since it tells the loan amount range of an applicant, it helps them make an informed decision and choose an institution within the loan range.
- Once a student selects a university and has a pre-admission sanction letter handy, it becomes easy to get admission at a foreign university. Since the letter gives an assurance to the university that the student has access to funds, they readily confirm the admission. It helps in saving a lot of time for both the universities and the students.
- Another alternative could be the proof of solvency, but this letter explicitly states the student’s availability of funds. This doesn’t let universities do any more scrutiny since the letter acts as an assurance of the availability of funds.
- Once you have a pre-admission sanction letter, it wards off any worries about visa and fee payment expenses.
An education loan for abroad studies from Axis bank helps students get ahead in their careers and helps them save a ton of money. Expenses in terms of outward foreign remittances are a big hurdle for Indian parents and attract a tax of 5%. This amounts to a significant rise in expenses. However, this expense can be clearly reduced to a negligible value if the outward remittance is funded via an educational loan. Outward remittances are taxed at 0.5% when funded by an educational loan. So if an Indian parent sends Rs 50,000 without an educational loan, they will have to pay a tax of Rs 2500, while if an educational loan funds the outward remittance, it will only cost Rs250.
Having a loan puts an onus on the student to study hard and secure a decent job to repay the loan. This makes a strong foundation of financial discipline among young graduates. It is beneficial for them even financially, as a good repayment history only adds up to their credit history.