Education Loan industry is growing strong in India as more and more students seek education loans for higher studies in India and Abroad. The current Indian Education Loan market stands at around INR 73,300 crore. However, before they plan for their education loan, students should have a good idea of the process of availing a loan and all the basic document necessities.
Various banks and NBFCs providing education loans in India offer various customized schemes, thus, bringing along with them a long list of documents required. Though most of the banks ask for the common generic documents, some banks and NBFCs do have special demands. For example, certain schemes like Vijaya Bank Education Loan demand for community certificate in case of loans having special provisions for the caste categories. The most commonly asked documents for availing education loan are mentioned below.
Admission Letter is probably the first document banks ask to ensure that you have secured admission in a reputed institute. Banks often refrain from giving loans to students securing admission in “not-so-popular” institutes as they worry about the repayments. However, the admission letter matters only when you approach the bank for education loan after admission.
The most important documents required are those which verify your identity and address. Your Aadhar card comes as the first response to such requirements, but it is also mandatory for you to provide your PAN card to link all your financial data and a few others.
Note: All of these documents are required to be self-attested.
Passport-size photographs are an obvious requirement in all financial dealings. Do remember about them as we often tend to forget the smallest things.
Your Passport and Visa are the 2 most important documents required when it comes to education loan for foreign education. Some banks like Dhanlaxmi Bank go a step further and ask for I-20 form also.
Banks and NBFCs ask for the recent ITRs and bank account statements of the parents. Karur Vysya Bank Education Loan asks for statements of previous 3-6 months. This is to ensure that the family is capable of repaying the money they are taking on the loan.
Many banks ask for collateral or a third-party guarantee for loans above a fixed value. These can include your LIC policies, property papers, govt. approved valuation certificate, etc.
Institute Brochure is necessary to prepare the plan for your education loan. Banks provide education loan instalments in accordance with the requirements from your institute’s side.
These were some of the documents which are commonly asked for. Apart from these, some banks ask for some additional documents too. For example, the Bank of Maharashtra also asks for details of all your previously availed loans and the scholarships you have earned so far. Punjab National Bank asks about the details of assets and liabilities of the parents or the co-applicant.
The entire loan sanctioning process becomes a lot simpler if you have all the documents prepared before-hand. Make sure you call your bank and get all the things sorted.