How to Apply for Education Loan in India

11 January 2023
6 min read

Student loans or education loans are financial aid that students can use to help pay for their education costs, including tuition, fees, books, and living expenses. Banks and other financial institutions offer student loans to help students pay for their higher education in India.

These loans can be used to cover expenses related to studying. Students can borrow a certain amount of money and repay it with interest after graduation.

There are several factors to consider when applying for a student loan in India, such as the type of institution you will be attending, the course of study, and your financial situation. It's essential to do your research and compare different loan options before making a decision.

Things To Do Before Applying For A Student Loan in India

The following are the few things that you need to know while you apply for education loan.

  • Determine Your Eligibility For An Education Loan

Most banks and financial institutions in India offer education loans to students pursuing higher education in India or abroad. It is necessary to check for which loan you stand eligible for.

  • Collect Necessary Documents

To apply for an education loan, you must submit certain documents to the bank or financial institution. These may include:

  1. A completed application form

  2. Proof of identity (such as a PAN card or passport)

  3. Proof of residence (such as a voter ID or utility bill)

  4. Proof of admission (such as a letter of acceptance from the institution)

  5. Proof of income of co-borrower (such as salary slips or bank statements)

  6. A statement of the cost of education (such as a fee structure from the institution)

  • Choose A Lender

There are several banks and financial institutions that offer education loans in India. Therefore, it is essential to compare the education loan interest rate, repayment terms, and other features of different lenders to find the one that best suits your needs.

  • Submit Your Application

Once you have collected all the necessary documents, you can submit your education loan application to your chosen bank or financial institution. You may have to visit the branch in person or submit the application online.

  • Wait For The Loan To Be Approved

The bank or financial institution will review your application and assess your eligibility for an education loan. They will inform you of the loan amount, interest rate, and repayment terms if your application is approved.

  • Sign The Loan Agreement

Once your loan has been approved, you must sign a loan agreement with the bank or financial institution. This agreement will outline the terms and conditions of the loan, including the interest rate, repayment period, and any fees or charges.

  • Disbursement Of Loan

After you have signed the loan agreement, the bank or financial institution will disburse the loan amount directly to the institution or your bank account, depending on the loan terms. You can then use the funds to pay for your education expenses.

You may also want to know the Best Education Loan in India

Eligibility Criteria for an Education Loan

  • Nationality

Citizens of India, Non-Indian Residents (NRIs), Overseas Citizens of India (OCI), Persons of Indian Origin (PIOs), and Students born to Indian parents abroad and wish to study in India.

  • Courses

Nursery to class 12, Approved graduation and post-graduation courses, Job oriented courses, Doctoral courses, PhDs, Diploma courses, etc.  

  • Collateral

Residential or commercial property, plots, fixed deposits, and insurance.

List of Documents Required For A Student Loan

  • Admission Letter From The Educational Institution Applied To

  • Previous Marksheets

  • Age Proof

  • Id Proof

  • Address Proof

  • Signature Proof

  • Latest Salary Slips

  • Latest Bank Statements

  • ITR With The Income Computation

  • Proof Of Turnover

  • Completed Application Form With Signature

  • Latest Passport-Size Photographs

  • Appropriate Visa For Abroad Studies

How To Apply For Education Loans in India

In order to know how to apply for student loan in India, follow the below-mentioned steps-

Step 1: Identify the Bank or Financial Institution

Check and identify the bank or financial institution that offers student loans. Many banks in India, such as the State Bank of India, Bank of Baroda, and Canara Bank, provide student loans for higher education.

Step 2: Eligibility Criteria

Check the eligibility criteria for the student loan. Most banks have specific eligibility criteria for student loans, such as the minimum percentage of marks required in the previous examination, the course of study, and the institute in which the student plans to study.

Step 3: Required Documents

Gather the required documents. You will need to submit certain documents along with your student loan application, such as proof of identity, address, admission to the institute, and proof of income of the parent or guardian.

Step 4: Student Loan Application Form

Fill out the student loan application form. You can obtain the application form from the bank's website or at the bank branch. Make sure to fill out the form accurately and completely.

Step 5: Submit the Completed Application Form

Submit the completed application form and required documents to the bank. You can submit the documents in person at the bank branch or through the bank's website.

Step 6: Application Processing

Wait for the bank to process your application and disburse the loan. The bank will review your application and, if approved, pay the loan to your institute to pay tuition fees and other expenses.

It's essential to carefully consider your options before taking out a student loan and to understand the terms and conditions of the loan, including the interest rate and repayment schedule.

How Can An Education Loan Help You?

An education loan can help you pay for your education, including tuition, fees, room and board, and other expenses. It can allow you to focus on your studies without worrying about how you will afford your education.

 Education loans can also help you build credit and establish a good credit history, which can be beneficial when you apply for other types of loans or credit in the future. However, it is essential to consider the terms of any student loan you take out, as you will be responsible for repaying the loan with interest.

Conclusion

Student loans in India are a valuable financial tool for students who need financial assistance to pursue higher education. However, it is essential for students to be cautious when taking out student loans and to carefully consider their repayment options.

It is also necessary for students to research and compare different loan options and to choose a lender that offers favorable terms and interest rates. By doing so, students can ensure that they can afford their loans and avoid financial difficulties in the future.

You May Also Be Interested to Know-

1.

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2.

YOU Can Save for Your Higher Education! Here's How

3.

7 Best Investment Options for Your Child

4.

Best Mutual Fund Plans for Your Children in 2022

5.

5 Ways to Build a Corpus of Rs.1 Crore for Your Child

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

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