Education location has always acted as a savior for students in providing the best educational opportunities both in your home country and overseas. Applying for a loan to fund your education is tough to process. Information on education loan interest rates, the application process, and documents required for education loan is crucial to gain the most of the services. Banks usually set a number of terms and conditions to apply for a loan. You need to submit and prepare various documents and follow the terms and conditions stated by the bank.
In India, the cost of education starts from around INR10 Lakhs to INR30 Lakhs depending on the institute. And overseas, the education costs rise by 30% to 50% plus other charges of accommodation, travel, medical issues, etc. depending on the country, its university and the course one opts. The loan criterion comes with a transparent policy, making it more accessible for borrowers. Besides easy-to-meet eligibility criteria, you need to submit a few essential documents.
Requirements
Education loan documents can be divided into broader categories. Each of these categories requires various documents that will make you eligible for the education loans:
- Identity Documents – Details of the identity documents required for education loans. Some bank usually demands any identity proof with a verifiable hint of the photo.
KYC Documents –
- Aadhaar Card
- PAN Card
- Driving License
Address Proof –
- Valid electricity/water/LPG bill
- Valid passport issued by Government of India
- Aadhaar Card
- Voter’s ID card (not accepted by all the banks)
- The current house lease agreement
- Magistrate/Gram Panchayat affidavit (not accepted by all the banks)
Regional/Domicile Proofs –
- Certificate of Domicile issued by district magistrate office
- Gazetted Affidavit (not accepted by all the banks)
- Permanent residence certificate issued by State/UT authority
- Academics Records –Academic requirements for Education Loan.
Past academic records –
- SSC/10th Class or equivalent marks-sheet/passing certificate
- HSC/12th Class or equivalent mark-sheet/passing certificate
- Graduation/ 3yr or 4yr degree mark-sheet/passing certificate
- Diploma passing certificate/record of marks/diploma certificate
- Records of past scholarship/awards etc.
- Special education/Professional courses/Certificate courses
Current academics documents –
- Proof of admission
- Documents of academic fees breakup
- College/University/Institution placements records
Foreign Education Academic –
- 1-20 form for study in USA academic institution
- CAS letter for UK loan
- Entry permit
- Admission exchange exam proofs like TOEFL, GREE, GMAT, etc.
- Exchange student form of the respective country
- Financial Documents – Financial documents needed
General Financial Documents –
- Bank passbook/statement copy of last 6 months
- Academic fees demand letter’
Financial documents for – self-employed, business, pensioners –
- Income tax returns approved and verified by CA at least 24 months
- Proof of the latest turnover
- Audit profit and loss statement of business for the current and previous financial year
- For pensioners – proof of retirement certificate and pension certificate
- For self-employed – qualification proof
Financial documents –employed/govt-non govt services/salaries –
- Salary statement issues by an employer for the current and previous financial year
- Form 16 and ITR returns for at least 2 years
- Salary slips issued by an employer of 2 months
- Collateral Documents– Common collateral documents required (only applicable for certain loan requests based on the loan amount and income proofs of the applicant)
Loan against an immovable asset –
- Property deed/chain of the sale deed
- Allotment letter by Municipal Corporation/Government authority
- Latest property tax statement, maintenance tax/bill
- NOC from society/builder
Loan against deposits –
- Original FD/RD receipts
- Interest statement of FD/RD
Loan against securities/shares and debentures –
- De-Mat account statement of last 6 months
- PAN card copy
- Generic Administration Documents –
- Application form
- Subsidy application forms
- Guarantee forms
Types of Documents
There are three types of student loans: Federal loans, private loans, and refinance loans once you leave school.
- Federal Loans are provided by the government, state colleges, and other organizations to provide financial aid to their students. These loans are more flexible than others. To get the federal loans, one needs to fill out the Free Application for Federal Student Aid (FAFSA) form. Submitting the form is the key to accessing grants, scholarships, work-study programs, and federal student loans. There are five categories of federal loans –
- Direct Subsidized loans
- Direct Unsubsidized loans
- Parent PLUS Loan
- Graduate PLUS Loan
- Direct Consolidation loan
- Private Loans are given by credit unions, banks, and state. These loans depend on the lender’s conditions. The rates are also fixed and variable. The private lenders don’t offer many choices, in fact, there are only two option –
- Private Student Loans
- Private Parent Loans
- Refinance loans can be made after your graduation and good credible history of paying loans. A private lender pays off your loan and gives you a new repayment schedule a lower interest rate. You need a credit score of 690 or higher to refinance. Types –
- Parent PLUS refinance loans
- Medical School refinance loans – both during and after residency
Best Banks for Education Loans 2020(up to INR 7.50 Lakhs)
- HDFC Bank Education Loan
- Axis Bank Education Loan
- Vijaya Bank Education Loan
- Union Bank of India Education Loan
- State Bank of India Education Loan
- Punjab National Bank Education Loan
- ICICI Bank Education Loan
- Corporation Bank Education Loan
- Canara Bank Education Loan
- Bank of Baroda Bank Education Loan
