How do you apply for an education loan?
Quality education is the path to a great career and successful life. A higher education degree opens many career avenues and helps secure your future. But with the rising costs of college and university fees, students and parents have no choice but to take on finance on education from external sources to fund higher studies. Education loans cover many expenses related to higher education, such as tuition and examination fees, hostel fees, the cost of books, conveyance charges, and so on.
Let’s understand the eligibility and the procedure for applying for an education loan.
Eligibility Criteria for Education Loan
The vital aspect is to check eligibility for an education loan to get approval. Here are the points listed for the loan:
- The candidate must be a valid resident of India.
- The candidate must have confirmed admission to recognized educational institutes.
- The candidate must fall within the age bracket of 18 to 35 years.
- The candidate must undergo a graduate, postgraduate degree, or PG diploma.
- The applicant should have offer letter from a college or university affiliated with the education system.
- Students pursuing full-time courses need a co-applicant who can be either a guardian or spouse for married candidates.
- The co-applicant must have a steady income source.
- A strong academic record enables speedy loan authorization.
Now we understand the eligibility criteria for education loans, let’s look at the procedure for education loans.
Procedure to apply for an education loan
Step 1: Conduct thorough research before choosing the lender.
Before initiating the education loan application procedure, you need to get the admission offer letter from your desired college or university, conduct thorough research on the lender, understand their interest rates, and visit them online or in person after completing your research.
Step 2: Fill out the application form.
If you are applying online, you can find the education loan application form on the money lender’s website. According to the instructions of the Department of Financial Services, all education loan applications, including applications received by the bank in physical format, are to be applied through Vidya Lakshmi.
Step 3: Appear for the interview.
The procedure continues with the interview round. The bank may call you to appear for the dialogue, whether you apply offline or online. The student wishing to study further is considered the principal applicant, so they must be present for this dialogue. The bank generally asks basic questions regarding their overall academic performance, the degree they wish to pursue, the college or university they wish to attend, and so on. They also ask about the possible income generated from their chosen field. The bank decides whether to proceed with the loan based on the information.
Step 4: Provide your documents.
At this stage, the bank asks you to provide all the necessary documents for the education loan procedure. You need to submit the admission offer letter. The bank will also do its due diligence and verify your enrolment.
Step 5: Loan approval from the bank
After verifying the candidate’s credentials, the student loan gets approval. The guardians of students are listed as co-borrowers, and the bank checks the co-borrowers credit scores. The applicant must also sign a promissory note and other prescribed documents, assuring the bank that the borrower will repay the loan within the defined tenure.
Step 6: Loan disbursement
The last step is loan disbursal. After completing formalities, the bank disburses the loan amount directly into the university’s bank account. Disbursement can also be done partially or fully at once.
Banks or financial institutions give international student loans to students to assist them in paying for their higher education costs abroad. Under this scheme, students are given financial aid to study in institutes abroad. Many Indian banks offer such loans at low-interest rates and flexible terms and conditions to qualified applicants. Additionally, the documentation is maintained to a bare minimum so that students can obtain their loans as soon as possible. However, with so many financial aid options, it is normal to get confused. At EduLoans, we provide complete assistance in preparing documents needed for approval. So, what are you waiting for? Reach out to our counselors for more information.