Education is the key to a successful future, but not everyone can afford the high cost of education. Fortunately, in India, there are many financial institutions that offer education loans to students who want to pursue higher education. In this guide, we will walk you through the step-by-step process of applying for an education loan in India. There are multiple stages of criteria that one has to fulfil to be eligible to apply for an education loan in India.
Here in this blog, we have mentioned the step-by-step process to apply for education loans in different banks. One has the option to apply to Private banks, Semi Government banks as well as private banks etc.
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How to apply for Education Loan 2023:
If you’re planning to pursue higher education, an education loan can be a helpful tool to fund your studies. In India, several banks and financial institutions offer education loans for students who wish to pursue courses in India or abroad. Here’s a step-by-step guide on how to apply for an education loan in India.
Step 1: Determine Your Eligibility
Before applying for an education loan, you should check your eligibility criteria. The eligibility criteria differ from bank to bank. However, the general eligibility criteria are:
- Students must hold Indian citizenship.
- One must have secured admission to a college/Institute or University in India or abroad.
- Students must have good academic records.
- The applicant or their parents should have a regular source of income to repay the loan.
Step 2: Choose a Lender
After determining your eligibility criteria, you should choose a lender that suits your requirements. There are various financial institutions that offer education loans in India, such as banks, NBFCs, and government bodies. Compare the interest rates, repayment terms, and other features of different lenders before finalizing one.
Here are some banks with their rate of Interest and EMI Plans:
Bank Name | EMI for 20 lakhs | Interest Rate per year |
SBI | INR 31,472 | 8.30% |
ICICI Bank | INR 32,688 | 9.50% |
PNB | INR 31,472 | 8.30% |
Bank of Baroda | INR 32,026 | 8.85% |
UCO Bank | INR 32,739 | 9.55% |
Federal Bank | INR 35,627 | 12.30% |
Axis Bank | INR 37,149 | 13.70% |
Canara Bank | INR 32,332 | 9.15% |
Read More- Study Abroad Scholarships Spring 2023
Step 3: Gather Required Documents
After choosing a lender, you should gather all the required documents to apply for an education loan. The documents required for an education loan are:
- Identity Proof (Aadhar Card, PAN Card, Voter ID Card, Passport)
- Address Proof (Aadhar Card, Voter ID Card, Passport, Driving License, Utility Bills)
- Academic Documents (Marksheets and Certificates)
- Admission Letter from the educational institution
- Fee Structure of the course
- Income Proof (Salary Slip, Income Tax Returns, Bank Statements)
- Guarantor’s Details (if required)
Step 4: Fill out the Application Form
Once you have gathered all the required documents, you can proceed to fill out the application form. You can either fill out the application form online or visit the lender’s branch to fill out the form in person.
Step 5: Submit the Application
After filling out the application form, you should submit the application along with the required documents to the lender. You can either submit the application online or visit the lender’s branch to submit it in person.
Step 6: Wait for Approval
After submitting the application, you should wait for the lender to approve your loan. The lender will verify your documents and check your eligibility criteria before approving the loan. This may take some time depending upon the bank or lender.
Step 7: Sign the Loan Agreement
If your loan is approved, the lender will send you a loan agreement. You should read the loan agreement carefully and understand the terms and conditions before signing it. Make sure to ask any questions you may have before signing the agreement.
Step 8: Disbursement of Loan Amount
After signing the loan agreement, the lender will disburse the loan amount directly to the educational institution. The disbursement process may take a few days, depending on the lender and the educational institution.
Step 9: Repayment of Loan
You will have to start repaying the loan after completing the course or after getting a job, whichever is earlier. The repayment conditions also varies from bank to bank. Make sure to read the repayment terms and conditions carefully before taking the loans.
Applying for an education loan in India is a simple process if you follow the steps mentioned above. However, it is important to choose a lender that offers a low-interest rate and flexible repayment options. It is very important to read the terms and conditions carefully as a applicant before signing the loan agreement. With an education loan, you can pursue higher education but you have to pay back the entire with the interest.
Education Loan for Abroad Studies 2023:
There is an option for Education loan to study abroad. Many financial institutions offer education loans specifically for students who want to pursue higher education abroad. The eligibility criteria, loan amount, interest rate, and repayment terms may vary from lender to lender, so it is important to research and compare the different options available before choosing a lender.
However, in general, the eligibility criteria for an education loan for studying abroad include having secured admission to a recognized course in a foreign university, having a good academic record, and having a regular source of income to repay the loan. Additionally, you will need to provide the required documents, such as an admission letter, the fee structure of the course, income proof, identity proof, and address proof.
Read Also- How to Study Abroad After 12th
Process to Apply for Education Loan to Study Abroad:
The Process to apply for the Education Loan to study abroad is simple as mentioned above. Then too, here are some steps that you have to follow.
- Research Lenders: Research and compare different lenders to find the best option for you. Look at the interest rates, repayment terms, and eligibility criteria of each lender.
- Check Eligibility: Check the eligibility criteria for the loan. In general, you need to be an Indian citizen, have secured admission to a recognized course in a foreign university, and have a good academic record.
- Gather Required Documents: Gather all the required documents. The documents required may vary from lender to lender, but you will typically need to provide identity proof, address proof, academic documents, an admission letter, the fee structure of the course, income proof, and guarantor’s details.
- Apply for the Loan: Apply for the loan either online or in person. Make sure you fill out the application form accurately and attach all the required documents.
- Wait for Approval: Wait for the lender to approve your loan. The lender will verify your documents and check your eligibility criteria before approving the loan. This process may take a few days to a few weeks, depending on the lender.
- Sign the Loan Agreement: If your loan is approved, the lender will send you a loan agreement. Read the loan agreement carefully and understand the terms and conditions before signing it.
- Disbursement of Loan Amount: After signing the loan agreement, the lender will disburse the loan amount directly to the educational institution. The disbursement process may take a few days, depending on the lender and the educational institution.
- Repayment of Loan: Repay the loan after completing the course or after getting a job, whichever is earlier. The repayment terms and conditions vary from lender to lender.
To get or apply for an Education loan for studying abroad, you need to research lenders, check eligibility, gather required documents, apply for the loan, wait for approval, sign the loan agreement, receive a disbursement of the loan amount, and repay the loan.
FAQs For How to Apply for Education Loan
The maximum amount of loan that can be availed depends on the lender and the course you are pursuing. It can range from a few lakhs to several crores.
The interest rate charged on education loans varies from lender to lender. It is generally around 8% to 15% per annum.
The repayment period for an education loan may vary from lender to lender. In general, it ranges from 5 to 15 years.
Yes, most lenders require a guarantor to apply for an education loan. The guarantor is usually a family member or a friend who can provide collateral security or a personal guarantee for the loan.