Features and Benefits of Education Loan
- Moratorium Period : Repayment typically starts after the completion of the course, providing students time to secure employment.
- Co-borrower Option : Parents or guardians can be co-borrowers to enhance eligibility.
- Tax Benefits : Repayment interest might be eligible for tax deductions under Section 80E of the Income Tax Act.
- Multiple Courses and Institutions : Loans are available for various courses, from school education to higher studies, and for institutions in India and abroad.
- Collateral and Non-Collateral Loans : Depending on the loan amount, some may require collateral, while smaller loans might not need any security.
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Eligibility Criteria
Education loan eligibility criteria can vary depending on the country of study, the lender, and the type of loan you’re applying for. However in a general overview the factors that often influence education loan eligibility are:
- Age: Most lenders have a minimum and maximum age requirement for loan applicants. Typically, you need to be of legal age (18 or older) to apply for a loan.
- Course/Program Eligibility: Education loans are often tied to specific educational programs or courses. Lenders may have a list of eligible institutions and programs that qualify for loans.
- Admission Offer: Many lenders require proof of admission to an eligible educational institution before approving a loan application.
- Academic Performance: Some lenders might consider your academic performance as part of the eligibility criteria. This could include factors like your high school or previous education grades.
- Co-borrower or Guarantor: If you have limited credit history or income, some lenders might require a co-borrower or guarantor (usually a parent or guardian) who will share the responsibility of repaying the loan if you are unable to do so.
- Credit History: Student's as well as their co-borrower/guarantor's credit history and credit score can play a significant role in determining your eligibility for an education loan. A good credit history can improve your chances of approval and may lead to more favorable loan terms.
- Income/Financial Ability: Some lenders may consider your ability to repay the loan based on your income or your co-borrower's income.
- Loan Amount: The loan amount you're requesting in relation to the cost of the program might affect your eligibility. Lenders may have specific limits on the loan amount they are willing to offer.
- Collateral or Security: In some cases, lenders might require collateral or security against the loan, especially for larger loan amounts. This could be in the form of property, investments, or other valuable assets.
- Documentation: You will likely need to provide various documents as part of your loan application, such as proof of identity, proof of admission, income documents, and more.
Documents Required to Apply for Education Loan
Documentation: You will likely need to provide various documents as part of your loan application, such as proof of identity, proof of admission, income documents, and more for both Student as well as the Guarantor or co-borrower.
- Student-Applicant
- Co-applicant/Guarantor
- Income Proof for Salaried Co-applicant/ Guarantor
- Income Proof for Self-employed Co-applicant/ Guarantor