The Indian education loan industry currently stands at a value of approximately INR 73,300 crore. The education loan demand is increasing in the country as more and more students seek funding options to fund their higher education. However, with the increasing demand, banks are establishing stricter eligibility criteria to disburse education loans to students.
While the demand is increasing, the number of Non-Performing Assets (NPAs) in the country is also increasing. This means that more and more borrowers are defaulting on the Education Loans for Study in India and Abroad availed by them. So, in order to ensure that they get their money back, banks and NBFCs are preferring only selected people for these loans.
Most of the public sector banks (PSBs) have started considering the eligibility criteria strictly. In schemes like SBI Education Loan and Kotak Mahindra Bank Education Loan, following are some of the major eligibility criteria considered by banks:
Indian National: The applicant must be a citizen of India. Some banks even consider those NRIs who hold the Indian Passport.
10+2: The student should have cleared the 10+2 examination with good grades.
Co-signer: A genuine co-signer must accompany the student who is availing the loan.
Recognized Institute: The institute in which student is getting admission should be well recognized and should have the necessary accreditations.
However, as the demand for education loan is increasing, banks are posing more conditions to filter the students. Some of the instances are mentioned in the table below.
|Punjab National Bank||Admission Basis||The bank prefers students who get admission through either entrance exams or on merit-basis. Many other banks have also started adopting this trend.|
|ICICI Bank||Eligible Course||The bank has kept certain conditions regarding the course student is planning to pursue.|
|UCO Bank||Age||UCO Bank has kept an upper age limit for students to avail education loan. The age limits are: UG course: 28 years PG course: 30 years|
|Bank of India||Outstanding Loan||Bank of India gives loan to only those who have no outstanding loan from any other institute.|
Through these conditions, banks ensure that the education loan goes to the most deserving student who is also capable of repaying it on time. For those students who seek Education Loan for Abroad, banks keep additional conditions. In such cases, it becomes mandatory for students to clear exams like GRE, GMAT, TOEFL, SAT, etc.
Banks don’t want to risk their money at a time when NPAs are on a rise and have already crossed the 9% mark. Some banks even prefer students who have scored good marks in 10+2 as they have high chances of continuing scoring good marks and getting a job easily.
So, if you think you are lagging behind on any of these parameters, it’s time you start improving your chances so that you also get that education loan easily.