Education loan is the most cost-effective means to fund your education if you are unable to get a full scholarship. Most banks provide education loan with the public sector banks in the forefront in providing education loans.
 

 
Many students especially those pursuing professional courses in India or abroad, are availing of education loans. According to latest data from the Reserve Bank of India, education loans disbursed by Indian banks rose 51 per cent to Rs 15,000 crore for the financial year ending March 2007 from Rs 9,962 crore at the end of March 2006.
 

 
If you are looking out for an education loan to complete a professional course, you ought to know the following points before taking an education loan:
 

 
·  Repayment options: For all other loans, you have to pay interest on your education loan too. But unlike other loans, education loan provides the option of a repayment holiday, which means, the borrower can suspend repayment of the loan till the education course, for which the loan was taken, is completed.
 

 
An education loan typically has three repayment options: Education loan with repayment holiday. Many banks stipulate repayment within one year after completing the course or six months after getting a job, whichever is earlier.
 

 
Interest alone is paid during the period of course. After the course completion, you start paying the actual EMI (principal and interest).
 

 
You start repaying the loan through EMI immediately after loan disbursement, in which case you could get the loan at an interest rate lower by about one per cent. The repayment conditions vary from bank to bank. So, talk with as many banks as possible to get the repayment option that suits your requirements.
 

 
·  Interest rates: Interest rate on education loan is usually lower than a personal loan but slightly higher than a home loan. Some banks offer a fixed rate of interest while others offer floating rate of interest on education loan. If the difference between fixed and floating rate is one per cent, it is advisable to opt for fixed rate as education loans have shorter repayment tenures of 5-7 years