Education Loan Eligibility in India is a little tricky. There are so many lenders and types of lenders and each of them have their own eligibility standards. This can be quite confusing for students who have no prior experience with any form of debt. Keeping this in mind, the following article will go over some need to know pointers about education loan eligibility in India to ensure students who apply for such loans have a good idea of this important aspect.
Eligibility works on two levels.
The first is whether or not you are eligible to apply for the loan or not. Even when it comes to this, different lenders might have different minimum requirements. However, generally speaking, lenders usually require that applicants are Indian citizens and above the age of 18. They might also require that the applicant have secured his/her admission before applying.
Along with this, most lenders would also make it mandatory for the applicant to have a co-borrower. Said co-borrower should also be an Indian citizen above 18 years in age. The co-borrower should also have access to his/her own bank account which allows him/her issue cheques.
The second level of eligibility.
Once you are eligible to apply, you must check the loan amount you are eligible for, commonly referred to education loan eligibility in India. To determine your eligibility amount, lenders will evaluate several factors, including your academic performance till date, your entrance exam scores, the course you have opted for, the college/university you have chosen, etc.
They will also look into other factors such as the financial background of your family, the financial capacity of your co-borrower, their income and credit scores, etc. After evaluating all these aspects, they will arrive at your education loan eligibility.
The difference between banks & NBFCs.
Most banks, especially public sector operators, have stricter norms when it comes to eligibility. You might have a very good profile, but they will require you to provide collateral to give you loans above Rs. 7.5 lakh. This means that, even though you are eligible, you will not get the loan amounts you need if you do not have any to offer as collateral.
NBFCs on the other hand will offer financing that’s more lenient. They will offer collateral-free financing if your profile is good. In fact, with an NBFC, you can also increase your education loan eligibility in India by providing collateral.
Can one check their eligibility before applying?
Yes, there are a number of online calculators that can help you check your rough education loan eligibility in India. All you have to do is look for one online (they are easily available on lender websites & loan aggregator pages) and fill in your the required details (usually your monthly income, outgo and the interest rate of the loan). After this, the calculator should tell you the ball-park amount you are safe to apply for.
Remember to be sure about education loan eligibility in India before you apply. Applying without properly understanding your eligibility could cause your loan to be rejected.
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