Education Loan for Higher Studies in India, Abroad: Know Eligibility, Documents Needed

Education loan play a vital role in the development of one’s career. For those aspiring learners who want to expand their horizons and study abroad, the education loan acts as an ideal bridge. The most common source of these loans is banks. Banks give students a wide variety of loans with different options, tenures and moratoriums depending on the courses they want to study and where they want to do so. However, every applicant gunning for an educational loan needs to qualify in certain areas to be considered as an eligible person for the loan. Here are some important factors to consider when applying for an educational loan.

Are You Eligible for an Education Loan?

For one, the most obvious thing the bank will look at is if you have a good educational background as a student, i.e., if you have a good track record and if your marks or academic performance has been good. The next thing that the bank will look at is the course that you applied for. This will be analysed through two lenses.

The first lens is whether or not the course itself is worth studying. In the sense, will it give a good career? The lender will look at the placement rates for students from that course, the job prospects and the overall value that course has before they even consider it for a loan. The next lens is the institution in which you want to study the course. They will look at the accreditation status of that college or university and only give a loan if it is of good repute.

Then after all that, there is the matter of money at the end of the day. The bank will look at if you can pay back the loan and offer collateral in the process. The bank will take into account the value of the collateral and if your parents or guardians fall under the co-borrower category or stand as guarantors for the loan. The bank will also check the credibility and income of the parent or guardian to see if they can pay back the loan in the event that you cannot.

Which Universities and Courses are Eligible for a Loan?

In India, universities or colleges which are recognised by the UGC, Govt., AICTE, AIBMS, IMCR, are eligible to qualify for an educational loan. Other institutes include approved polytechnic institutions as well as reputed foreign schools/universities in India. If you are going abroad to study, the bank will check the standing, recognition and repute of that institute against the standards of that country to determine if you can get a loan to study there.

Students can opt to study almost any course they want to as long as it is under such an accredited institute or has a good repute. The kinds of courses that you can apply for with a loan are generally those that fall under Undergraduate degrees/diplomas and special courses, Postgraduate degrees/diplomas and special courses or PhDs and Doctoral Programmes.

List of Documents you Will Need to Study in India under a Loan

1) Duly filled application form.

2) Passport size photographs.

3) Graduation, Secondary School Certificate, or High School Certificate or mark sheets.

4) KYC documents that include ID, address, and age proof.

5) Signature Proof.

6) Income Proof of parents or guardians.

7) If the collateral is required, documentation for Immovable property, FDs, etc.

List of Documents for Students interested in Studying Abroad

1) Duly filled application form.

2) Passport size photographs.

3) KYC Documents that include ID, residence and age proof.

4) A copy of the statement of marks or certificates of the last examination passed.

5) Proof of admission to the university and the course

6) Schedule of course expenses

7) If you have received a scholarship, a copy of the scholarship letter.

8) Copy of Foreign Exchange permit if you have it.

9) Bank account statement for the last six months of the borrower, parents or guardian.

10) Last 2 years’ Income Tax assessment of the borrower, parents or guardian.

11) For loans with collateral, the details of security offered must be furnished.

12) Proof of the source of margin is required.

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