What is an Education loan?
Thousands of Indian and international students have been able to pursue their higher education goals thanks to education loans. One of the biggest obstacles to a successful professional path used to be expensive tuition fees or living costs. Despite the fact that many students benefit from these loans, there is still a fog of uncertainty surrounding the fundamental aspects of an education loan.
Now who can avail the benefit of Education loan
In order to qualify for an education loan, a variety of things must be taken into consideration. A student’s eligibility for a student loan is constantly changing during the procedure. To begin, students who wish to apply for a student loan must meet the following requirements:
- The student is required to be an Indian national.
- A reputable university in India or overseas should have accepted them on the basis of their academic merit or entrance exam.
- They’d have to be enrolled in classes that focus on their future careers.
- A passing grade on the student’s most recent qualifying examination is required.
To get a student loan from any lender in the market, you must meet the very minimum requirements. A student’s loan application is then evaluated based on additional criteria once these requirements are met.
What are the requirements for obtaining a student loan from a financial institution?
Students can get education loans from a variety of financial institutions, including public sector banks, private banks, and NBFCs. It is not the type of lender that determines whether or not you are eligible for a loan, but rather the type of loan that you choose. Secured education loans and unsecured education loans are the two types of loans available. Both forms of loans are available from the many lenders in the market, including public sector banks, private banks, and non-banking financial institutions (NBFCs).
The banks and financial institutions provide student loans at a pretty low-interest rate so that they can be repaid easily. In order to ensure a good education for all students, the government and lenders work together. You should compare student loan refinance rates from different lenders if your current rate is higher than the refinanced loan.
What are the requirements for a secured student loan?
Secured education loans are loans in which the borrower is required to put up some form of collateral in order to secure the loan. Based on the value of the collateral, the final loan amount is determined. A secured education loan has additional eligibility requirements in addition to the above-mentioned criteria.
The value of the collateral should be equal to or greater than the amount of the loan.
Each piece of supporting documentation must be 100% authentic and original.
These include a registered sale deed, a chain of documents showing the property’s ownership for 30 years, property tax receipts, and a proof of occupation.
Additional documentation, such as a NA order, NOC from the builder, Letter of Allotment or Encumbrance Certificate, may be required by the lender depending on the location of the property.
All of these items must be included with your loan application in order to proceed. If any of the documents are missing, the loan may be rejected. As a result of comprehensive list of essential documents, you don’t have to sprint from one end of town to the other in order to get them all. When it comes to securing a loan, many students are concerned about how their parents’ income and jobs may affect the decision. The value of the collateral pledged and the academic profile of the student play a significant role in the decision.
In order to be eligible for an unsecured student loan, you must meet certain conditions.
There are no collateral requirements for unsecured college loans. An earning co-applicant must be present in order for an application to be qualified for a bank loan. Factors such as these determine whether or not a borrower is eligible for these loans:
His or her academic record, if applicable.
The student’s future earning potential
Class and college rankings for the desired major.
The income of the co-applicant.
Student and co-applicant credit histories.
There are unsecured education loans from private banks like Axis Bank and ICICI Bank.