Getting a quality education is an aspiration for many. The reputed institutions come with high fees and financial requirements, which can get overwhelming. Opting for an education loan is the right choice in such cases.
These loans cater to building a bright future for aspiring students. They cover all the educational costs like tuition fees, books, hostel expenses, etc. They come with varied benefits if applying for education overseas. It is essential to understand the student loan eligibility criteria before you apply. Here is a list of them to help you:
Age: There are no strict restrictions when it comes to availing of a student loan. However, it is advisable to apply when you are between 18 to 38 years. The age of your co-applicant matters if you are a minor. They should be 21 years or more while applying and not above 70 years while closing the loan.
Student merit: The lenders evaluate your academic performance to know your potential. It includes your achievements, certificates, scholarships, etc., which showcases your value. They also see your academic grades when you submit your mark sheets. If your academic record is excellent, it shows your potential of landing a job.
Collateral: You must submit collateral if your loan amount exceeds Rs. 7 lakh. You would also need a co-guarantor to apply with you. Lenders do this to avert risk as you are studying, and this serves security. However, you need not make the collateral submission and co-apply if the loan amount is within Rs. 4 lakh.
Course and university value: Your chosen programme plays a significant role in the loan amount you get. Make sure to check and compare the lenders if their loan scheme covers your study field when you apply for student loan. The potential your course has to generate income is crucial for the lender. It shows your repaying capacity. Your chosen university’s reputation and accreditation also matter.
Co-guarantor: Your co-applicant’s creditworthiness plays a vital role in availing of education loan in India. It is because you are not an earning individual. Their credit history and income are considered. However, you are financially responsible for repaying the loan after the course completion. Till then, lenders require a guarantor for security, especially for a higher loan amount.
Documentation: The study loan documents you submit along with your application affects your eligibility. These include your identity proof, address proof, academic certificates, the credit report of the co-applicant, admission letter, etc. Upon scrutiny and authentication of the paperwork, your loan amount gets decided. Hence, it is essential to arrange these documents to avail of the loan hassle-free.
The mentioned factors vary from lender to lender. They also differ for a student loan in India and overseas. However, these are the common factors considered by most banks. Be sure to check them out on their websites to compare and apply.
