Indians are increasingly willing to explore educational opportunities both within India and abroad. However, financing higher studies can be a significant challenge for many. To overcome this hurdle, young Indians are considering affordable education loans from popular banks in the country like IDFC FIRST Bank.
Education loans provide financial assistance to students and enable them to pursue their dreams of higher education. Know the eligibility criteria for education loans in India and the steps to apply for an education loan without collateral in India.
Eligibility criteria to apply for an education loan in India
The eligibility criteria for education loans may vary from one lender to another. However, banks consider some general criteria to approve an education loan without collateral:
· Nationality: Applicants must be Indian citizens.
- Age: The minimum age requirement is usually 16-18 years at the time of loan application. There may be an upper age limit, often around 35-40 years.
- Academic background: Students should have secured admission to a recognised university or educational institution in India or abroad. The course must be job-oriented or professional.
- Co-applicant: Most lenders require a co-applicant, such as parents or guardians, to jointly sign the loan agreement. The bank assesses the co-applicant’s income and creditworthiness while approving a loan.
- Financial stability: Lenders assess the financial stability of the borrower and co-applicant. The income, assets, and liabilities of the co-applicant are evaluated to determine the repayment capacity.
- Academic performance: Certain lenders consider the academic performance of the student during the loan application process.
Applicants must note that these eligibility criteria may vary based on the lender’s policies and specific loan products. You must check with the chosen financial institution for their specific requirements before applying.
Steps to apply for an education loan in India
Applying for an education loan without collateral in India is a streamlined process. Here is an explanation of the main steps through IDFC FIRST Bank’s example:
- Research and choose a lender: Begin by researching different lenders and comparing their loan offerings. Look for lenders like IDFC FIRST Bank that specialise in education loans and offer competitive interest rates and flexible repayment options.
- Gather required documents: Prepare the necessary documents, such as academic certificates, admission letters, fee structure, KYC documents, income proof, and bank statements of the co-applicant.
- Fill out the application form: Complete the loan application form provided by the lender. You can also apply online through the lender’s website or mobile app.
- Submit the application: Submit the duly filled application form along with the required documents to the lender. Some lenders may provide the option of submitting documents online.
- Verification and approval: The lender will verify the provided documents and assess the eligibility criteria. If satisfied, they will approve the loan and communicate the terms and conditions.
- Loan disbursement: Upon approval, the loan amount will be disbursed directly to the educational institution or as per the agreed-upon disbursement schedule. IDFC FIRST Bank, for example, offers direct disbursement to the institution.
Before applying for an education loan, you should check its interest rate and use an education loan EMI calculator to know the value of your future EMIs (Equated Monthly Instalments) in advance.
