An increasing number of financial institutions are offering newer and better education loan schemes at competitive rates of interest. Generally, the repayment starts within six months after completion of the study programme or one month after securing a job, whichever is earlier. Moratorium for graduate studies is 5 years and 2 years for postgraduate studies. It is much easier getting a loan for an MBA, engineering or medical degree than for graduation in another discipline. Although HDFC, ICICI and Citibank offer 'education loans', these are offered only as a 'top-up' loan to home loan borrowers by many financial institutions. Their rates are also not attractive. Mostly, the maximum amount sanctioned is Rs. 7.50 lakh for inland studies and up to Rs.15 lakh for studying abroad. The rate of interest varies between 11.5 and 14.25 %. The interest charged, up to Rs 4 lakh, is on the Prime Lending Rate (PLR), which prevails all through the sector, with no option of a floating rate structure.

The margin money up to Rs 8 lakh is nil, but over this, some banks charge 5 percent for inland studies and 15 percent for studies abroad. This component is highly negotiable. The actual disbursement (after deducting processing fees etc.) comes to about 90 percent of the loan amount and covers everything from cost of stationary to travel in case of study abroad. The disbursement is made either in one go or term-wise, in installments, directly to the college/ institution.

Presently, no bank is financing distance education/ correspondence/ certificate courses. Some banks also seek insurance cover for all student-borrowers and insist that the parents' age should not exceed 55 years. The Bank Education Loan will be released after you get the Visa. One has to give Collateral Security of House property of market value nearing to 100% to get Educational Loan.

Some of the Banks take LIC of the Education Loan amount of the student then one does not have to give Collateral Security. However, one has to pay premium on it.

• Mark sheets of the last qualifying exam.

• Proof of admission.

• Schedule of expenses for the programme.

• TOEFL/ GMAT/ GRE / IELTS score sheets (if any).

• Copies of letter confirming scholarship (if any).

• Two passport size photographs.

• Statement of bank account for the last six months.

• Income tax assessment proof.

• A brief statement of assets and liabilities.

• Proof of birth and residence.