26-July-2016 written by : FSI-Team
Education loan offers assistance to those looking to get higher education but might find it difficult to do so due to financial constraints. It is the endeavor of the government and lenders too, to make these loans accessible and the process as easy as possible for those who require it. All lenders have laid down procedures for sanctioning any kind of loan and the same applies to education loans too; so below we discuss what are the for getting an education loan
One of the first education loan requirements is a co-applicant for obvious reasons. Since the applicant would be studying he/she will not have running income for the duration of the course and after the course is finished then also possibly for some time. Thus to ensure that they are paid back the lenders will require a co-applicant who could be held responsible for the loan repayment along with the student applicant. Apart from that the lender considers the eligibility criteria for the co-applicant and the students a well. The co-applicant must be a parent, sibling or a relative who fulfills the eligibility criteria set by the lender.
Though banks advertise that education loan are available for all higher level courses but banks do not offer loans for all courses and all institutes. These are generally available for management, advanced technological courses, medicine, engineering, architecture, mathematics, statistics etc. These loans are also not available for part time courses. Lenders may generally have an upper age limit for the student it maybe 28 or 30.
The first requirement from the student for the loan would be a duly filled form along with the required number of photographs. The student also needs to be Indian and he/she needs to produce the letter of admission from the concerned institute along with the break of the expenses. To be eligible for the loan the loan the bank may require the student to submit mark sheets (last qualifying exams and tenth standard onwards too). Apart from that identity proof, address proof and date of birth proof for the applicant is also required. Some lenders may fix an age criteria also for the student.
When the requirement is for an education loan for abroad then some other documents may also be required. These are the required VISA approval documents, GMAT/SAT/GRE score and a letter from the HOD of the University where the admission is sought.
Along with the student, the co-applicant also needs to fulfill the requirements set by the lender. Co- applicant's identity proof, address proof, bank statements for last three months if the co-applicant is salaried and six months if the co-applicant is six months. In the event of a salaried employee latest salary slip and the latest Form 16 are also required and when it is a self-employed individual the requirement are the latest ITR, balance sheet and profit and loss accounts of last two years duly certified by a CA. Self-employed applicants are required to submit a Sole Proprietor Declaration or a Certified Copy of Partnership Deed/MOA, AOA and Board Resolution as the case may be. Apart from the above a self employed co-applicant is also required providing qualification proof for his/her highest professional degree and continuation of business proof.
The co-applicant along with submitting the required documents and complying with the eligibility criteria must have a good CIBIL rating too so that the banks are willing to sanction a loan to him/her. A good CIBIL score is an indicator that the borrower can be trusted to repay his/her debts responsibly.
The above discussion lists the general requirements for an education loan but each lender may have slightly different approach and rules so do check with the specific lender about their requirements before applying so that you do not end up wasting time and effort.