Education is one of the most important tools for individual progress. It helps you compete well in the verticals of your choice so that you attain peak position and thereby live a successful life ahead. It plays a vital role in shaping up the society to prosper socially and economically. Therefore, parents want their children to study well and succeed ahead. But due to the higher inflation costs, family commitments, and other financial responsibilities, it becomes difficult for people to finance their child’s higher studies with the little savings they have.
In today’s time, the best way to finance studies would be taking a student loan. Government banks and private finance companies offer Study Loans with an easy procedure and at an affordable interest rate. There are flexible repayment options and ample of time for loan repayment. However, every individual need to check the student loan eligibility before applying for a loan. It helps them understand the loan amount they get qualified for, the interest rate applicable, repayment procedure and other fees associated with education loan.
In India, every bank has set student loan eligibility for pupils as well as co-applicants. To apply for education loan the student should be an Indian national with a good academic track record and has secured admission to a recognized University/College. All loans require a co-applicant who has to fulfill the basic criteria to apply for an educational loan. The co-applicant can be a salaried or self-employed parent, sibling or a relative with a steady source of income. The age, annual income, work experience or steady business source, education qualification and profession of the co-applicant are also considered by a bank or private finance company.
Here are some important checks for student loan eligibility across all banks and finance companies:
- You must be an Indian national
- You must be in the 16-26 age groups or any other range specified by the bank
- A good academic record (first class throughout, with no gaps or breaks in education, etc.)
- Your parents/ guardian should have a regular source of income so that they are able to repay the loan if the need arises
- The institute you have applied for must be a recognized one
- Minors are ineligible for study loans, as banks assess the individual’s repaying capacity while disbursing the loan. But you can avail of the loan if your parents/ guardians satisfy the eligibility criteria.
To make your job easier and save your time & energy from tedious calculations, there are student loan eligibility calculators. These calculators will help the prospective borrower to calculate the approximate amount of loan that he or she will be eligible, interest rate, processing fees, prepayment charges, etc.
While government banks might demand margin money costs of around 15-20% some leading private finance companies have designed study loans without setting any cap on finances. They are no margin money costs involved in it. They provide 100% coverage of your educational costs. The loan gets disbursed directly to the university account so the student must have confirmed admission in the institute before the disbursement of the loan. Some private finance companies give students financial assistance related to GRE/GMAT/SAT exam entrance fees, the cost of application to foreign universities, 100% tuition fees, and other expenses related to education in the form of a bridge loan. Overall, factors like academic score, recognition of the university applied for, gross income, credit worthiness of the loan seeker, course fees, and monthly expenditure are taken into consideration under the student loan eligibility parameter while sanctioning the loan.