Education is becoming quite expensive day by day. If you want to complete your education without burdening your parents or guardians or if you are unable to meet the expenses of your higher education, then you can go for educational loans. The first step towards taking an education loan is to meet an eligibility criteria for getting a loan in India.
Education loan eligibility criteria
An applicant should be an Indian National to avail an education loan in India.
2. Age criteria
An applicant with 18 years of age can avail an education loan or your parents can take the loan in their name. No educational loan is given if you are above the age of 35 years.
3. Admission to an educational course
The applicant should have confirmed admission in a college/university in India by the UGC/Government/AICTE/Appropriate authority.
An applicant must have secured at least 60 percent in previous qualifying examinations.
Step by step guide:
The application process may vary from bank to bank, but there are some fundamental steps to get one:
Step 1: The loan application form
The applicant has to fill in an application form which may ask for details such as:
- Two passport size photographs
- Graduation, secondary school certificate, or High school certificate or mark sheets
- KYC documents (Voter ID, and PAN card) that include ID, address, and age proof
- Signature proof
- Parents income proof
- For collateral– Documentation for Immovable property, FDs
Applicant/candidate if applying for a loan to study abroad will need to provide the documents below:
- Two passport size photographs
- KYC Documents Voter ID, and PAN card) that include ID, residence and age proof
- Mark sheet or certificates of the last examination passed
- Proof of admission to the university and the course
- Schedule of course expenses
- A copy of the scholarship letter (If you have)
- Last six months bank account statement of the borrower, parents or guardian
- Last 2 years’ Income Tax assessment of borrowers, parents or guardians
- For collateral- The details of security offered. If required, the candidate has to provide an advocate’s search and report about its marketability, mortgage ability, etc.
- Applicants migration proof.
Step 2: Personal discussion
Once the applicant is done with the application form, there is a round of personal discussion with the bank employee wherein he/she may be asked various question relating to the academic performance, about the course/ subject one has selected, probably the institute etc.
Even there are some banks that hold the academic record important.
Step 3: Applicant need to provide supporting documents
Before the bank considers the loan application, the applicant needs to deposit the mandatory documents related to admissions. The bank needs the documents to verify the enrollment of the student the concerned institute.
If your loan amount is above Rs. 4 then the applicant may also require collateral security such as papers relating to the property to be mortgaged.
Step 4: Approval or denial of loan
A guarantor is mandatory for an education loan. The applicant’s parents or guardians could be the guarantor. The bank before sanctioning the loan will run a thorough check of the guarantor and his/her credit history.
After completion of the process, the bank can sanction or deny the applicant’s loan.
Step 5: Disbursal of the loan
Once the formalities are completed by the applicant, the bank will disburse the loan. The bank pays out the college/institute fee directly to the concerned institute.
Online application for education loan
An education loan has been made even easier with an addition of online application. The applicant can now apply for an education loan online. The bank will sanction the loan only if the applicant and principal contact for actual approval and disbursement of the education loan.