HDFC, or Housing Development Finance Corporation Limited, has the distinction of being one of the first institutions in the country to get 'in principle' approval from the RBI in 1994 to set up a banking service enterprise in India. HDFC was thus incorporated formally in August 1994 as HDFC Bank Limited. In January 1995, it became a scheduled commercial bank. 

Today, the bank provides its customers with a wide range of products and services, such as accounts and deposits, loans, cards, demat, investments, insurance, forex, premiere banking, private banking, and much more. HDFC Education Loans form one such product, and are aimed at promoting higher education. Let us learn a bit more about them.

Types of HDFC Education Loans

There are three types of education loans on offer from HDFC Bank:

• Education Loan for Indian Education

• Central Government Interest Subsidy Scheme

• Education Loan for Foreign Education

Let’s look at them in detail now.

Education Loan for Indian Education

With HDFC’s Education Loan for Indian Education, you have the perfect avenue to fuel your ward's education within India. One of the best things about the scheme is that the loan can be personalized according to your needs and requirements.

Under this scheme, you can avail loan amounts of up Rs. 10 lakhs. Additionally, the loans are characterized by competitive pricing, doorstep service, optional insurance cover, and fast fund disbursement.

Features

1. High Loan Amounts: One of the most significant benefits of taking education loans from HDFC Bank is that you can avail large loan amounts. The maximum amount of credit for studying in India is Rs. 10 lakhs.

2. Wide range of collateral choices: When it comes to giving the bank collateral against the loan, you have a lot of options.

3. Loan upto Rs. 4 lakhs: If the loan amount is upto Rs. 4 lakhs, no collateral is needed. However, one's parents need to be co-borrowers.

4. Loan upto Rs. 7.5 lakhs: One needs to give tangible collateral security that has a suitable value against the investment. Additionally, parents need to be co-borrowers as well.

5. The maximum tenure for a loan within Rs. 7.5 lakhs is ten years and the maximum tenure for a loan beyond Rs. 7.5 lakhs is 15 years.

6. Better protection: When you are choosing an education loan from HDFC Bank, you get loan protection benefits that are optional but can be highly useful. For instance, you can select the Credit Protect program to protect your loan.

7. Quick and straightforward disbursal of loans: HDFC Bank provides you doorstep service, which allows for a fast and easy documentation process. This ensures fast loan disbursal. The credit, for your convenience, can be directed to your educational institution and will be disbursed according to the institution's fee structure.

8. Subsequent Disbursement: You also get the option of availing tranche disbursement. This can be done by visiting a CSC or Retail Assets Customer Service Centre.

9. Complete transparency: Taking a loan from HDFC means that there is full transparency in the whole process. There are no hidden costs, and all charges are communicated early on in writing.

10. Tax Rebates: When you take domestic education loans from HDFC Bank, you become eligible for tax benefits under section 80(E) of the Income Tax Act, 1961.

Eligibility

A person wishing to apply for this loan needs to be:

1. A resident Indian

2. Between 16 and 35 years of age

Documents Needed

Applicant:Student

Admission letter of the institute, mark sheets, KYC documents (age proof, signature proof, id and residence proof)

Applicant:Salaried Employee

KYC documents, salary slips having the date of joining and two months’ salary slip from the office salary account

Applicant:Self-Employed Individual

KYC documents, proof of turnover, previous six months’ bank statement, audited balance sheet of the last two years, ITR of the last two years along with calculation of earnings

Applicant:Self Employed Professional

KYC documents, ITR of the previous two years along with an estimate of earnings, audited balance sheet of the previous two years, proof of qualification and bank statements for the last six months

Others Documents

A passport-size photo that has been signed across should be pasted on the completed application form.

Documents Needed After Sanction

PDCs or ECSs for the appropriate mode of payment. The completed loan agreement needs to be signed by the applicant and the co-applicants.

Others Documents Needed

University fee demand letter, disbursement request letter, academic progress report of the applicant for the previous two months, a copy of the receipt of payment for the last semester by the institute, and fresh repayment instructions.

Rates and Fees

You can get attractive rates of interest of education loans from HDFC Bank for education within India. 

1. Loan processing charges: Minimum of 1% of the entire loan amount as applicable, or a minimum amount of Rs. 1000, whichever is higher.

2. Prepayment charges: Up to 4% of the entire outstanding prepaid balance in case the loan is foreclosed or is prepaid in part during the moratorium period along with dues and interests. There shall be no prepayment charges in case of foreclosure, or if prepaid in part after the moratorium period.

3. No Due or No Objection Certificate: No charges.

4. Duplicate of No Due or No Objection Certificate: No charges.

5. Solvency certificate: N/A.

6. EMI Interest Overdue: 24% per year of the overdue and underpaid EMI amount that is outstanding from the EMI repayment date.

7. Credit Assessment Charges and Non-standard repayment charges: N/A.

8. Cheque or ACH swapping charges: Rs. 500 per use.

9. Duplicate repayment schedule charges: Rs. 200.

10. Loan Rescheduling charges: Upto Rs. 1000.

11. Charges for EMI Returns: Rs 550 per instance.

12. Legal and Incidental Charges: As per actuals.

13. Statutory charges and stamp duty: As applicable under the rules of the state.

14. Fees for loan cancellation: No charges. However, CBC charges, LPP charges, interest for the interim period shall be levied.

Rates offered during April 19th to June 19th

Max. IRR	Min. IRR	Avg. IRR
13.32%	9.40%	11.41%

Annual Percentage Rates offered during April 19th to June 19th

Max. IRR	Min. IRR	Avg. IRR
14.13%	9.40%	11.41%

Central Government Interest Subsidy Scheme

The Central Government Interest Subsidy Scheme introduced by the government of India makes sure that every child has an equal right to achieve his or her dreams through higher education. You can get this education scheme through HDFC Bank.

There are many benefits in this, such as:

• Fast loan disbursal

• Competitive pricing

• Transparent processing

Features

There are several unique features that characterize the Central Government Interest Subsidy Scheme from HDFC Bank.

1. Low income requirement: Individuals wishing to avail this scheme do not need to have a significant income. All of their income, including that from parents, should not exceed Rs 4.5 lakhs per annum.

2. HDFC Benefits: HDFC Bank gives you further benefits such as faster loan disbursal, competitive pricing, and transparency.

Eligibility Criteria

One needs to fulfill the below-given criteria to be eligible for this education loan scheme.

1. Approved courses: This education loan scheme applies only for the loans taken from Scheduled Banks for pursuing approved education courses after Class 12. One can avail the loan for professional and technical courses from any recognized institute in India.

2. Low family income requirement: One of the most crucial aspects here is that one's total and parental income should not be more than 4.5 Lakhs per year to be eligible. Thus, the applicant needs to submit a certificate issued by the authorized officers from the State Government.

3. Interest benefit: You get the benefit of full interest subsidy for the time of the moratorium.

4. Time period: This educational scheme is applicable for loans availed from April 1, 2009. For loans taken before that, only the sums disbursed during the period are eligible.

Documents Needed

One of the best things about this education loan scheme is that one does not need to submit a lot of documents. Here are the ones that you do need to provide, however.

1. An original income certificate: An authorized State Government officer issues this document.

2. The Interest Subsidy Agreement: It needs to be executed by all borrowers and needs to be stamped according to the State Stamp Act.

3. The original bonafide student letter: The educational institute issues this document.

4. Aadhar card: You need to provide the student's Aadhar card number.

5. Other documents: Other documents required to be submitted are details of Additional Interest Subsidy.

Education Loan for Foreign Education

With HDFC's Education loan for foreign education, you can finally fulfill the higher education requirements and needs of your child without any obstacles in your path. HDFC Bank provide you with a customized plan and easy repayment terms. The benefits of taking this loan are many. For instance, you stand to gain upto 100% of the entire amount needed at the foreign university. You can also get loan amounts of more than Rs. 20 lakhs.

At HDFC, you get customer-friendly services defined by quick loan disbursal, fast processing, and transparent processes. The great news is that this loan can be used to pursue more than 950 courses at 36 countries around the world.

The benefits of this scheme are many:

1. Doorstep service

2. Flexible loan terms

3. Tax benefits

4. 100% financing

Features
A unique feature of this loan is that HDFC offers you up to 100% of the total amount needed for your educational prospects. Other banks may provide a part of the amount you need, but HDFC understands that you need the funds as fast as possible, as well as the problems faced when one receives a partial loan. 100% of the total loan amount can be used to cover living expenses, tuition costs, travel expenses, purchase of books and laptops, and much more.

Even before the confirmation of admission at the foreign institute, you can enjoy additional benefits such as easy and fast disbursal, flexible terms, and preferential rates.

1. Higher loan amounts: At HDFC, you can cover 100% of your educational expenses. You can also get education loans of more than Rs. 20 lakhs.

2. Fast and easy loan amount disbursal: When you need an education loan, you don't have time to waste. HDFC Bank understands this and offers fast and easy loan disbursal. Additionally, you can now be in touch with the bank through features like web billing.

3. Wide range of courses: HDFC Bank offers you preferred loan rates for more than 950 courses around the world. This makes HDFC Credila a trusted source of education loans for students in India. More than 4000 colleges and educational institutions are also covered. HDFC Bank also offers preferential rates for certain top institutions and universities.

4. Attractive tax rebates: When you decide to get this loan, you also get tax benefits under section 80(E) of the IT Act of 1961.

5. The loan is provided before college admission: It is hard to get admitted to an institution if one does not have proof of funds. HDFC Bank makes it easier for customers as it sanctions loans even before one get admission to colleges. Thus, one can show the loan sanction letter to the college as proof of funds.

Eligibility

To be eligible for this education loan, one needs to be:

• a resident of India

• aged between 16 and 35

• able to offer collateral security in some cases

• able to provide a co-applicant (for full-time programs), who can be a sibling, parent, or spouse.

Documents Needed

The following documents are needed to avail this loan:

Applicant: Student

• Academic documents: The admission letter (with the breakup of the fees).  If the applicant is from the USA, the I-20 form needs to be given, and if the applicant is from the UK, the CAS letter needs to be provided.

• KYC documents: This includes age proof, ID proof, signature proof, mark sheets, signature of the student (if below 21 years of age), PAN card, passport, and residence proof.

Applicant: Salaried Individual

KYC documents, salary slips of the previous three months with the date of joining, salary account bank statements for 6 months, Form 16 of the last year from the employer, along with one year of IT return

Applicant: Self-Employed

KYC documents, tax returns of the previous two years along with the calculation of income, bank statement of the last eight months, the audited balance sheet of the last two years, and proof of turnover

Applicant: Self-Employed Professional

Tax returns of the previous two years along with the calculation of income, proof of qualification, bank statements of the last eight months, the audited balance sheet of the previous two years, and KYC documents

Others Documents

A passport-size photo that has been signed across should be pasted on the completed application form.

Documents Needed After Sanction

PDCs or ECSs for the appropriate mode of payment. The completed loan agreement needs to be signed by the applicant and the co-applicants

Documents Needed for Subsequent Disbursements

The university fee demand letter, revised loan repayment instructions for ECS with eight security cheques, the applicant's progress report, and the subsequent disbursement letter

Rates and Fees

Here are the charges applicable on availing an education loan for foreign education

1. Charges for loan processing: Till 1.5% of the loan amount sanctioned along with any other fees applicable

2. Prepayment charges: NULL

3. No objection certificate: NULL

4. Copy or duplicate of the NOC and No Dues Certificate: NULL

5. Solvency certificate: N/A

6. Overdue interest with EMI: 2% interest per month of installment along with taxes as applicable

7. Charges for credit assessment: Not applicable

8. Fees for non-standard repayment: Not applicable

9. Debit card swapping charges: Up to Rs. 500 per instance, excluding any taxes

10. Charges for Direct Debit Bouncing: Up to Rs. 400 per case, excluding taxes

11. Incidental and legal charges: At actual rates

12. Statutory costs such as stamp duty: As per the state's laws

13. Charges for loan cancellation: 1% of the uncovered sanctioned loan, along with any fees applicable

14. Charges for manual collection: Rs. 200 for every visit, plus taxes

15. Costs for handling and updating the loan amount for every customer request: Rs. 1500 in addition to taxes

16. Retrieval and storage charges of documents:  Rs. 2000 plus taxes (no collateral) and Rs. 4000 plus fees with collateral

FAQs

Q1. How can one repay a student loan in India?
Ans. One can repay a student loan in India by ACH, standing Instructions, or by post-dated cheques.
Q2. How much is the maximum amount can get for studies in India?
Ans. One can get a maximum of Rs. 10 lakhs as loans for studies in India
Q3. When should I start paying the EMIs for foreign education loans?
Ans. Due to the unique flexibility of Credila, one can pay simple interest or PEMI during the period of the foreign education course, and the principal amount plus interest after the course is completed.

News

HDFC Bank Registers Significant Growth in Quarter 1 of FY20
In the first quarter of FY20, HDFC Bank has shown an income growth of 22.9%. The growth was of Rs. 1,32,943 million, and is a remarkable from Rs 1,08,136 million as on Q1-FY19. This growth comes as a result of asset growth and a strong growth margin.