Education Loan Eligibility Criteria for Studying Abroad

Education loan eligibility criteria in India vary from bank to bank. Government and Private sector banks offer student loans at cheap interest rates with flexible terms and conditions to candidates who fulfil education loan eligibility and have impressive profiles. Getting a study loan is helpful for Indian students to finance their study abroad dream.

Who is eligible for getting student loans? If you are going to knock on the bank’s door to borrow an education loan to study abroad, then you should have the answer to this question. Indian citizenship, age of candidate, admission status, and credit report are the common but important factors of education loan eligibility.

Meritorious students get financial help to attend universities abroad under this unique loan programme. It is known to all that the cost of studying abroad is quite expensive. Many students drop their plans of overseas education due to expensive fees. However, borrowing study loans is the best idea to finance their studies. Students can explore government education loan schemes before applying for any student loan. You may get an interest-free loan, easy repayment options and other benefits if you are eligible. This article will help you understand the eligibility criteria for bank-wise education loans to finance your study abroad education. 

Read More: How to Repay Student Loans Faster?

Education Loan Eligibility in India

It is important for students to understand the education loan eligibility guidelines and qualify the same, to be able to apply to their preferred money lending institution/bank for their Education Loan. The education loan eligibility criteria vary for different banks. However, some common factors that are taken into account by all money-lending institutions (banks) include:

• Citizenship: The applicant must be an Indian national.
• Age Limit: If the loan applicant is under 18, then his or her parents must apply for the loan on their behalf.
• Academic Performance: The applicant must have a strong academic record. A strong academic record enables quicker loan approval.
• Admission Letter: The applicant must have received admission to a reputable overseas college, university, or institution.
• Top Trending Course: The applicant's chosen course must be technical or professional since banks favour programmes that prepare students for employment.
• Co-applicant: Full-time students must have a co-applicant, who may be either a parent, a guardian, a spouse, or a parent-in-law (in the case of married candidates). The co-applicant needs a steady source of income.

Factors Enhancing Education Loan Eligibility

Till now, you have understood the importance of eligibility to get an education loan. Banks and NBFCs analyze the profile of candidates before offering student loans. Here are some factors that can help you to be more eligible for borrowing education loans:

• Strong Academic Record
• Admission to a top university or college
• Family's Financial Stability
• Promising Career Prospects

Bank Wise Educational Loan Eligibility in India 

Check out the student loan eligibility criteria of different banks.

Documents Required for Education Loans

While the formalities vary for different banks while applying for an Education Loan, however, there are a set of formalities that are identical across the board, such as documents that you would be required to disclose along with your Loan Application Form. The documents primarily include but are not limited to:

List of Documents Required for Education Loan: For Students

• Proof of Identity (either): PAN/ Passport/ Driver’s License/ Voter ID card
• Proof of Residence/ Address (either): Recent copy of Telephone Bill/ Electricity Bill/Water Bill/ Piped Gas Bill or copy of Passport/ Driving License/ Aadhaar Card
• Income Proof
• Valid Indian Passport
• Academic Records: 10th Result and 12th Results
• Graduation Result: Semester-wise (if applicable)
• Entrance Exam Results through which admission has been secured including GMAT, GRE, TOEFL, and IELTS scores
• Proof of admission: Offer Letter or Admission Letter from the Institution. A conditional admission letter may be considered in the case of studying abroad.
• Statement of cost of study/ Schedule of expenses
• 2 passport-size photographs
• If any previous loans from other Banks/Lenders, then the Loan A/C statement for the last 1 year

Also, Read

Documents Required for Study Loan: Co-applicants:

• Proof of Identity (any one): PAN/ Passport/ Driver’s License/ Voter ID card
• Proof of Residence/ Address (any one): Recent copy of Telephone Bill/ Electricity Bill/Water Bill/ Piped Gas Bill or copy of Passport/ Driving License/ Aadhaar Card
• 2 passport-size photographs
• If any previous loans from other Banks/Lenders, then the Loan A/C statement for the last 1 year

We have also provided the Income Proof documents that would be required from the Co-applicant as part of the Education Loan process. 

Documents Required for Income Proof

• Salary Slip or Salary Certificate of the last 3 months 
• Copy of Form 16 for the last 2 years or a copy of IT Returns for the last 2 financial years, acknowledged by IT Dept.
• Bank account statement for the last 6 months (of Salary Account)
• Business address proof (For Self Employed)

• IT returns for the last 2 years (For Self Employed)
• TDS Certificate (Form 16A, if applicable)

Chances of Getting an Education Loan

To guarantee that students receive financial help, banks are vigilant while evaluating a candidate's eligibility. The general academic standing of the applicants, their intended course of study, and their present admission status are taken into account before authorising a loan.

• Obtaining a good grade or ranking on the prerequisite examinations
• Showing academic excellence
• Being accepted into a reputable institution of higher learning
• Parents, guardians, and co-borrowers have a solid financial history.
• Showing promise for new employment and revenue growth

Students are informed that from the education loan process to approval and disbursement, the entire loan process is time-consuming, so it is always advisable to apply for an Education Loan months in advance to avoid any last-minute complications. Students who have applied for an education loan from a nationalized bank are required to start the repayment process after the completion of the moratorium period (Repayment commences one year after the course completion or 6 months after securing a job, whichever is earlier). However, students should understand the moratorium time varies for different loan-providing institutions.

Read: SBI Education Loan for Study Abroad: Ultimate Guide

How to Calculate EMI on Education Loans

There are multiple websites which offer a tool called, Education Loan EMI Calculator. It allows you to stimulate the EMI you need to pay and the total repayment amount. All you need is information about principal amount, interest rate and loan tenure. These are the most important factors to calculate your education loan.

• Principal Amount: This is the total loan amount you're borrowing.
• Interest Rate: This is the annual percentage rate (APR) charged on the loan. Education loan interest rates can vary significantly among different banks and financial institutions.
• Loan Tenure: This is the duration of the loan, typically expressed in months or years.

For Example, A student borrowed INR 20,00,000 as an education loan for 7 years at a 9.4% rate. That student needs to pay INR 32,586 per month as EMI of an education loan.

Contact India’s leading education loan providers through Shiksha Study Abroad For more queries. Do write to us in the comments below. Or request a call back from our Shiksha Study Abroad Counselling Services.