The education loan procedure

As opposed to missing out on getting a higher education, students find taking an education loan a better option. Many banks and NBFCs now help students find the right financial solution that they need to cover for the course.

Banks and financial institutions have a few important eligibilities for students who wish to apply for the loan. Some of them are that:

1. The student needs to be an 18 years old Indian citizen
2. The student has a confirmed admission in any college/university that is recognised by the UGC/Government/AICTE/Appropriate Authority
3. The student must have a co-borrower who is an Indian.
4. The co-borrower must have a stable source of income and a checking account with any bank in India.

Once you have the eligibility cleared, you can then go on to apply for the loan.

Apply to initiate

Once you have settled on your lender, you will have to submit a form that includes your information in relation to your identity, your academic history and your future academic plans like the course that you are applying an education loan for. Make sure you fill this to precision.

Meeting the lender

Meeting the lender is one of the important parts of the loan process. Here is where the lender and the student have a brief discussion about the loan and also the academics of the student. As a student, you must make sure that you be coherent about your course selection. Lenders will never say no to promising candidates. That is why having excellent academics always comes handy.

Submitting the documents

To crosscheck information in regards to your academics, course and co-borrowers, you will have to submit a list of documents. Make sure you maintain a precise list so that you don’t miss any during submission. When you submit your validated documents correctly and on time, you can have your education loan approved and disbursed in time.

Waiting for the approval

The final background check is done on the co-borrower of the student. You can have your parent or guardian as your co-borrower. The lender reviews the financial history of the co-borrower. After this, your loan with be sanctioned or denied.

Promissory note and disbursal

Once the lender has sanctioned your loan, the student – who is the primary borrower of the education – has to sign the promissory note. This is to ensure the students’ obligation to repay the loan.

After completing a few other technicalities, the lender disburses the loan amount to you or directly to your college/university.

Repayment

When it comes to the repayment, the student gets to choose if they want the moratorium period where no instalments need to be paid. It is suggested that the student use this to properly structure and plan how they want to repay their education loan.

Online application

Now, there are many lenders who have started an online process for education loan application. This is basically to initiate the process. You will have to approach the lender to discuss the loan and your academics.

Hope this helps your education loan process.