Everything You Need to Know About Education Loan!

Posted by ketan on July 9th, 2019

Higher education is getting increasingly expensive as the years go by. Students who have the potential and the wits, who truly want to study more, are unable to because of the inability to afford higher education. Thankfully, there is a solution to this called education loan. Educational loans are loans that banks or non-banking financial companies (NBFCs) provide to students to fund their further education at a fixed interest rate.

Eligibility criteria for education loan.

Some of the factors that banks or non-banking financial companies (NBFCs) for eligibility for education loan are:

-          An offer letter from the academic institution which is proof of admission.

-          Exam scores of the student, academic background, and academic achievements.

-          Whether the student can offer a collateral or some sort of security.

-          If the student has a co-applicant with a stable income.

-          The course for which the student has taken admission for. The course should be accredited and worthy of studying.

-          The university or institution should also be accredited and reputed.

-          The job profile and credit score of the co-applicant.

What is covered by educational loan.

All educational loan providers cover the basic costs such as tuition fee and some other expenses. However, there are some educational loan providers that cover other costs as well such as:

-          Accommodation charges

-          Exam and library fees

-          Books and equipment including a computer

-          Traveling expenses abroad

-          Registration fees

-          Educational tour fees

-          Other expenses that are required to complete the course efficiently.

The documents that are required for approval of education loan.

If you have all your documents in place, then your education loan can be easily approved. Most applicants fail to get an educational loan because of lack of proper documents. The documents that are required by most banks for approval of educational loans are:

-          Identity proof such as an aadhar card, pan card, or driving license.

-          Address proof such as a valid passport, voter’s ID, aadhar card, or current house lease agreement.

-          Past academic records such as 10^th class or equivalent passing certificate, 12^th class or equivalent passing certificate, graduation certificate, or diploma certificate as relevant.

-          Current academic documents such as proof of admission to the university and academic fees breakup.

-          Foreign education academic proof such as i20 form, entry permit if required, professional exam qualification like GRE, GMAT, TOEFL, IELTS, and others if relevant.

-          Financial documents like income tax returns, salary slips, bank statements, home ownership papers, etc.

-          Collateral documents like property deed, property tax statements, De-Mat account statement, interest statement of fixed or recurring deposits, etc.

Educational loans provided by various banks can vary when it comes to documents required, coverage, educational loans interest rate, etc. To find the best educational loan, applicants and parents of applicants should research both online and offline. Figure out the loan amount you require, compare interest rates, find out the number of EMIs you would have to pay, and finalize the bank or non-banking financial company (NBFC) you think is best for your educational loan needs.

We hope this article was informational and we wish you good luck with your future endeavors!