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Education Loan in Tamil Nadu

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Education Loan in Tamil Nadu

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Brinda Khurana
Brinda Khurana

Study Abroad Expert

Updated on:  22 Dec 2024 | 
Reviewed By:  Aman  
| 1.12K | 55  min read

In Tamil Nadu, education loans are vital for students aiming to finance their higher education due to the high costs associated with it. The state's commendable 100% gross enrollment ratio (GER) in primary and secondary education underlines the importance of these loans. To secure an education loan in Tamil Nadu, students need to meet certain eligibility criteria, which include academic performance, the course and institution chosen, and financial background. Required documents generally include proof of admission, academic records, KYC documents, and proof of income for the co-applicant. These loans cover tuition fees, books, accommodation, and other related expenses.

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Which Bank is Best for an Education Loan in Tamil Nadu ?

Tamil Nadu is a significant hub for education loans in India, with a notable percentage of loans disbursed by public sector and private sector banks dedicated to students from the state. This emphasis is due to the government's proactive stance in supporting educational financing. To choose the best bank for an education loan in Tamil Nadu, students should consider various factors such as interest rates, loan terms, and the ease of application processes. Leading banks and NBFCs often provide competitive loan options tailored to meet the diverse needs of students pursuing higher education both domestically and abroad.

 

Leading Banks for Education Loan in Tamil Nadu For Studies in India 

Bank Name  Loan Amount  Processing Fee

State Bank of India 

Up to INR 50 lakh

Nil - INR 10,000+Tax 

Axis Bank 

Up to INR 75 lakh (unsecured) 

Up to 2% of the amount+GST 

ICICI Bank 

Up to INR 1 crore 

Up to 2% of the amount +GST

IDFC First 

Up to INR 30 lakh (unsecured) 

Up to 1.5% of the amount 

UBI 

Up to INR 1.5 cr (secured) 

Up to INR 40 lakh (unsecured)

INR 5000 (refundable) 

HDFC Credila 

Up to INR 40 lakh 

1% + GST 

Auxilo 

Up to INR 65 lakh 

Up to 2% of the sanctioned loan amount 

InCred 

Up to INR 60 lakh

0.75% - 1% of the sanctioned loan amount

BOB 

INR 7.5 lakh - INR 1.5 cr 

1% (max. INR 10,000) 

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Leading Banks for Education Loan in Tamil Nadu for Abroad Studies

Bank Name  Loan Amount  Processing Fee

State Bank of India

Up to INR 1.5 cr with collateral 

INR 10,000

Axis Bank

Prime A - INR 1 cr

Prime B - INR 40 lakh 

0.75% on the sanctioned loan amount 

ICICI Bank 

Up to INR 2 cr (secured) 

Up to INR 1 cr (unsecured) 

Up to 0.75% TO 1% + GST 

IDFC First Bank

Up to INR 75 lakh without collateral 

Up to 1.5% of the sanctioned loan amount 

Union Bank of India 

Up to INR 2 cr (secured) 

Up to INR 40 lakh (unsecured) 

INR 5000

HDFC Credila 

Up to INR 75 lakh 

0.5% - 1% 

Avanse 

Up to INR 75 lakh 

1% - 1.5% 

Auxilo 

Up to INR 65 lakh 

0.5% - 1.5% 

InCred 

Up to INR 80 lakh 

1% - 2% 

MPower Financing

Up to 100,000 USD 

5% (adjusted in the loan amount) 

Prodigy Finance 

Up to 100% cost to study 

Up to 5%, added to loan amount*

Bank of Baroda 

Up to 1.5 cr with collateral 

INR 10,000 + GST 

*Note: Upon loan approval, students are required to pay an upfront fee of $100 to receive their sanction letter.

 

Explore Best Banks for Education Loans!

 

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What are the Documents Required for an Education Loan in Tamil Nadu ?

When applying for an education loan in Tamil Nadu, whether it's a secured education loans or unsecured education loans , you need to prepare a range of documents.

 

For Unsecured Loans:

  • list items Student Documents: Application form with photos, ID proofs like Aadhaar and PAN, admission letter, academic mark sheets, gap certificate if needed, and work experience details.
  • list items Co-applicant Documents: For salaried: Recent bank statements, salary slips, ITRs, and Form 16. For self-employed: ITRs, bank statements, financial statements, and business proof.
  • list items Other Documents: Letters stating financial responsibilities, bank statements, expense invoices, and receipts for any prepayments.

    •  

    For Secured Loans:

  • list items Property Documents: Property ownership proof like sale deeds, government allotment letters, and latest property tax receipts.
  • list items Financial Documents: Co-applicant's income proof and bank statements.

    •  

    These documents will help authenticate your application and speed up the loan processing.

     

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    What Collaterals Can Be Accepted for Education Loans in Tamil Nadu?

    In Tamil Nadu, acceptable collaterals for securing an education loan can include various types of assets:
     

    1. Land Ownership Documents: Title deeds or pattas, which confirm ownership of the land.
     

    2. Commercial Properties: These are often accepted by private lenders as collateral.
     

    3. Agricultural Lands: Can be used as security against the loan.
     

    4. Financial Securities: Fixed Deposits (FDs), insurance policies, and government bonds are also commonly accepted as collateral.
     

    These options provide flexibility for students and families looking to secure funding for education.

    Agricultural land can be used as collateral for obtaining education loans in Tamil Nadu. Hence, Union Bank of India (UBI) is not offering loans against agricultural land. However, they do provide loans against properties located in areas governed by a Gram Panchayat, provided you can furnish a Non-Agricultural (NA) certificate for the property. This certificate is essential as it verifies that the land, though situated in a Gram Panchayat area, is designated for non-agricultural purposes, making it eligible for securing a loan.

     

    Avoid Loan Letdowns: Know What Knocks Your Education Loan Off Track!

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    Education Loan Interest Rate in Tamil Nadu For Studies in India?

    Bank Name  Interest Rate  Interest Rate Concession 

    State Bank of India 

    Starts from 8.30% 

    0.60% Business strategy discount 0.50% - for female students 

    0.50% - Rinn Raksha 

    Axis Bank 

    Starts from 11.5% 

    0.5% - 2% 

    ICICI Bank 

    Starts from 10.5% -11% 

    0.5% - 2% 

    IDFC First 

    Starts from 8.5% - 10% 

    0.5% - 2% 

    UBI 

    Starts from 11.15% 

    0.5% for female students

    1% if the SI is paid in full 

    HDFC Credila 

    Starts from 10.25% - 12.75% 

    		 -

    Auxilo 

    Starts from 11% - 13.5% 

    0.5% - 2% 

    InCred 

    Starts from 11% - 13.5% 

    0.5% - 2% 

    BOB 

    Starts from 8.85% 

    0.5% 
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    Education Loan Interest Rate in Tamil Nadu for Studies in Abroad 

    Bank Name  Interest Rate  Interest Rate Concession 

    State Bank of India 

    Starts from 10.15% 

    0.5% concession in interest for female students 

    0.5% - Rinn Raksha 

    Axis 

    9.99% - 12.5% 

    		 -

    ICICI 

    10.25% - 12.5% 

    		 -

    IDFC First 

    9.5%-11% (secured) 

    11%-13% (unsecured) 

    		 -

    UBI 

    9.25% - 9.75% 

    		 -

    HDFC Credila 

    10.25% - 12.75% 

    		 -

    Avanse 

    10.75% - 13% 

    		 -

    Auxilo 

    11.5% - 13% 

    		 -

    InCred 

    11.85% - 13.25% 

    		 -

    MPower 

    12.99% - 15.99% 

    -

    Prodigy 

    11.5% - 13.5% 

    -

    BOB 

    9.7% (fixed) 

    0.20% concession in interest for female applicants of non-premier institutes

    Verify your eligibility for an education loan with GyanDhan today! Simply visit the GyanDhan website, use their loan eligibility tool, and receive instant feedback on your options. 

    Check Your Education Loan Eligibility

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    What is the Eligibility Criteria to Avail an Education Loan?

    To qualify for this education loan scheme, applicants must meet specific eligibility requirements:
     

    1. Parental or Guardian Representation: A parent or guardian must act as the co-borrower for students who are minors, ensuring legal and financial responsibility.
     

    2. Joint Loan Agreement: The loan will be issued in the names of both the student and the parent/guardian, linking both parties to the financial commitment.
     

    3. Admission Through Merit: The student must have secured admission to a recognized institution either in India or abroad, based on merit through a competitive selection process.
     

    These criteria are designed to ensure that the loan is used for legitimate educational purposes and that there is adequate financial backing to support the student's academic journey.

    Top Benefits of Education Loans—Learn How They Can Empower Your Academic Journey! 

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    Conclusion 

    In Tamil Nadu, securing an education loan offers numerous benefits, including full coverage of academic expenses, a moratorium period for easier financial management post-graduation, and potentially no loan margin at some private banks, easing the initial financial burden for students. However, loan applicants must navigate challenges such as proper documentation, compliance with property regulations, and adherence to approved building plans. Addressing these elements efficiently ensures smoother loan processing and reduces the likelihood of rejection, paving the way for financial support that allows students to focus solely on their educational pursuits.

     

    In Tamil Nadu and exploring education loan options? GyanDhan is your go-to platform, offering a pathway to secure financing for your higher studies in India or abroad. Our education loan experts help you in securing high loan amounts under favorable terms with a track record of higher loan approval rates. We also assist with pre-visa loan disbursement, crucial for your visa application. Best of all? Our expert, end-to-end service comes at absolutely no extra cost to you. Check your loan eligibility on GyanDhan now and take the first step towards realizing your academic dreams.

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    Frequently Asked Questions 

    What types of expenses do education loans cover in Tamil Nadu?

    Education loans typically cover tuition fees, examination fees, book costs, equipment, accommodation, and sometimes travel expenses for studying abroad.

    What is a moratorium period, and how does it benefit students in Tamil Nadu?

    The moratorium period is a grace period after graduation where students are not required to make loan repayments. This allows graduates time to secure employment without the immediate pressure of repayments.

    Are there specific collateral requirements for securing an education loan in Tamil Nadu?

    Yes, collateral such as property deeds, commercial properties, agricultural lands, fixed deposits, and government bonds can be required, especially for higher loan amounts.

    What could lead to the rejection of an education loan application in Tamil Nadu?

    Common reasons include incorrect or insufficient documentation, lack of mandatory property approvals (like CMDA or DTCP), and deviations from approved building plans.

    How do I choose the best bank for an education loan in Tamil Nadu?

    Compare loan offers from multiple banks considering interest rates, processing fees, loan terms, and additional benefits such as moratorium periods and loan margins.

    Calculate your Education Loan EMI

    Click Here
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