A Quick Guide About an Education Loan for a PhD

Pursuing a Doctor of Philosophy or PhD is a significant step towards career advancement and gaining expert knowledge in your chosen field. However, the financial burden of a long-duration course like a PhD can be challenging. Many students opt for education loans for PhD programs to overcome this hurdle.

This blog post is a handy guide to applying for an education loan for PhD students.

Benefits of an Education Loan for PhD

An education loan tailored for PhD programs offers several advantages that can help you achieve your academic goals without financial constraints. Here are some key benefits:

1. Access to Quality Education: An education loan covers various expenses such as tuition fees, accommodation costs, research materials, and travel expenses. It ensures that finance is not a barrier to pursuing your higher education dreams.
   
2. Independence in Financing: It also allows you to become financially self-reliant during your doctoral journey without exhausting your family’s savings or relying on scholarships/grants.
   
3. Building a Credit Score: Your education loan will be your first debt obligation. Timely repayments build a good credit score, which is essential for future financial endeavours, such as buying a house or starting a business.

Types of Student Loans for a Doctorate Degree

Financial institutions generally offer two types of education loans specifically tailored for PhD programs based on collateral:

Secured Loan: A secured education loan requires a borrower to pledge an asset as collateral, such as residential property or non-agricultural land. This type of loan generally offers lower interest rates due to the collateral provided.

Unsecured Loan: Borrowers do not need to provide any collateral for an unsecured education loan. However, these loans usually have higher interest rates than secured loans.

Education Loan for PhD Students: Eligibility Criteria

Before applying for an education loan for a PhD program, you need to meet certain eligibility criteria. The primary borrower must:

– Be an Indian citizen aged 18 years or older.

– Have a confirmed admission offer from a recognized institution before the final loan disbursal.

– Include a co-borrower who earns in India.

If you have a co-borrower, the person must:

– Be an Indian citizen, legal guardian, parent, sibling, or other blood relative.

– Hold a bank account in India capable of signing cheques.

– Be the primary debtor responsible for repayment.

Documents Required to Apply for an Education Loan for PhD

To complete your education loan application process smoothly, ensure you have the necessary documents ready. Below is a list of essential documents required for education loan.

For the Borrower:

1. Academic Documents: Provide all relevant academic certificates and mark sheets.

2. Proof of Admission: Submit your admission offer letter from the respective institution.

3. Fee Structure: Include a detailed breakdown of tuition fees and other expenses.

4. Photo ID Proof: Attach a copy of your valid photo identification document (such as an Aadhaar card or passport).

5. Passport-sized Photographs: Provide two recent colour passport-sized photographs.

6. Residence Proof: Submit documents such as electricity bills or rental agreements as proof of your residence address.

7. Date of Birth Proof: Attach any valid document indicating your date of birth.

8. Signature Verification Document: Submit a document that verifies your signature, such as a copy of your PAN card or passport.

For the Co-borrower:

1. Photo ID Proof: Attach a copy of the co-borrower’s valid photo identification document.

2. Passport-sized Photographs: Provide two recent colour passport-sized photographs of the co-borrower.

3. Residence Proof: Submit documents proving the co-borrower’s residence address.

4. Date of Birth Proof: Attach any valid document indicating the co-borrower’s date of birth.

5. Signature Verification Document: Submit a document that verifies the co-borrower’s signature.

6. It is advisable to consult with your lender to understand their specific document requirements before initiating the loan application process.

Application Process to Get an Education Loan for PhD Students

To apply for PhD student loans, follow these steps:

1. Fill out the student loan application form accurately, ensuring all required information is provided.

2. Attach all necessary documents for the student and co-borrower, including KYC documents.

3. Submit the completed form and supporting documents either online or by visiting the financier’s office.

PhD Student Loan Repayment Method

Repaying your education loan for a PhD can be done in two primary ways:

– Equated Monthly Installments (EMIs): Most borrowers choose this popular repayment method, where fixed EMI amounts are paid each month. EMIs consist of both principal and interest components, helping you gradually repay the loan over time.

– Interest Servicing During the Course: Some borrowers opt to pay simple or partial interest during the moratorium period when they are not required to make full EMI payments. However, it is important to note that interest continues to accrue during this period, increasing the overall repayment cost of student loans.

Conclusion

Opting for an education loan allows you to access quality education without financial constraints and build a strong credit score while pursuing your academic aspirations. Remember to choose the loan type that suits your needs and understand all terms and conditions before signing the agreement.

To explore education loan options for your PhD program, download the Tata Capital app. Empower yourself with knowledge and make informed decisions about financing your higher education.