How to get an Education Loan in 6 easy steps?

In this inflationary period, the rising costs of education are putting pressure on the pockets of most people. Although getting qualified from top universities and colleges has its own prominence, these institutions come with significant costs. To finance such education, most people prefer Education Loans.

The question each student asks is, 'How can I take Education Loan?' Education Loans basically finance the education of students, and they can pay it back after the education ends. Education Loans have been key to financing the costly education in today’s time. But how to get Education Loan online? Let’s find out!

How to get Education Loan for students

If you are wondering how to obtain Education Loan, then you are at the right place. It all begins with choosing and applying with the right lender. But before you apply for Education Loans, it is important to be sure whether you are applying for an Education Loan to study in India or abroad. The loan amount gets disbursed directly to the college or university where you are willing to study.

Education Loan application process: Step-by-step guide

Here’s the step by step process on how to take Education Loan for studies:

Research and choose the lender: The first step on how to take a Study Loan is choosing the right lender. It includes certain parameters, like the interest rate provided by the lender, Education Loan eligibility criteria, maximum loan amount, flexibility in tenure, fees and charges, and other terms and conditions.
Fill out the loan application form: The application can be made either online or offline depending upon your lender. Fill in the entire application form and submit it to the lender along with all the necessary documents.
Appear for the interview round: After you submit the application, you might have an interview with the college or university. If you are selected and your admission gets finalised, you can proceed to completing your Student Loan application.
Documentation: After submitting the application and getting your admission finalised, the next step on how to take a Student Loan is to submit the relevant documents relating to confirmation of your admission.
Bank approves the loan: After the application and documentation are completed, your bank will scrutinise your application and decide on the approval. Once approved, the bank will issue an offer letter containing all the details about the terms of the loan.
Loan disbursal: The loan amount relating to college fees will be directly disbursed to the concerned college or university.

Amount that can be availed as an Education Loan

The amount that you can avail of as an Education Loan depends upon multiple factors. This includes your eligibility criteria, the amount you need for the loan, the collateral you provide, etc.

Education Loans are basically of two types:

Secured loans: You need to provide security to the lender. There is no upper limit on the amount you can avail of.
Unsecured loans: They don't have any collateral requirements. They have an upper limit depending on your income level and asset and liability status.

Who can get an Education Loan?

Most students wonder, 'How to get Education Loan after 12th?' Well, different banks have different Education Loan eligibility criteria. Here are the common eligibility criteria that you will find in most financial institutions:

Residence: You should be a resident of India.
Age: Both the applicant and co-applicant should be over the age of 18 years.
Courses: You should apply for career-oriented courses, like Engineering, Medicine, Management, etc., either at the graduation or post-graduation level.
Admission: You should have secured admission to a college or university either in India or abroad through a merit or entrance test-based selection process after the completion of HSC.
Income: The co-applicant can be either a parent or guardian and should have a regular source of income.

Documents required to apply for an Education Loan

If you are willing to apply for an Education Loan, then you need to submit the following documents:

1) Documents at the time of application:

Income proofs like income tax returns, salary slips, Form 16, etc., for the last 2 years
Passbook or bank statement for the last 6 months
Copy of the Admission Letter from the concerned college or university, along with the fees schedule
Pass certificates and mark sheets of SSC, HSC, national-level entrance tests and degree courses
Age proofs like Aadhaar card, PAN card, birth certificate or driving license
Address proofs like Aadhaar card, passport, utility bills, rent agreement, etc.
Photo ID proof like Aadhaar card, PAN card, birth certificate or driving license
Passport-size photos of both the applicant and co-applicant
Guarantor form, if required

2) Documents required for first disbursement:

Demand Letter from a university or college
Sanction Letter and loan agreement signed by the applicant or co-applicant
Disbursement request signed by the applicant and co-applicant
Receipts of margin money paid to the university or college, along with the bank statement that reflects the transaction
Documents required for collateral
Form A2 signed by the applicant or co-applicant (for an overseas college or university)

3) Documents required for subsequent disbursements:

Demand Letter from the university or college
Disbursement request signed by the applicant and co-applicant
Receipts of margin money paid to the university or college, along with the bank statement that reflects the transaction
Exam mark sheet or progress report
Form A2 signed by the applicant or co-applicant (for an overseas college or university)

Conditions to apply for Education Loans in India

You should be a citizen of India
You should have achieved 50% marks in HSC and graduation
You need to apply for admission in career-oriented courses like engineering, medicine, management etc. either at the graduate and post-graduate
You should secure admission to universities or colleges, either in India or abroad, based on a merit-based or entrance exam-based selection process after completing the HSC
The co-applicant, either a parent or guardian, should have a regular source of income

How to get Education Loan from the government?

The government has launched various schemes to ensure that finance is not a hurdle to the education of any child. Education Loans by the Government of India provide benefits in the form of direct schemes or subsidies in the Education Loan. Some of these schemes include -

Central Scheme of Interest Subsidy for Education Loans
Dr. Ambedkar Central Sector Scheme of Interest Subsidy for Educational Loans
Padho Pardesh Scheme of Interest Subsidy for Education Loans

Also Read: How to select the right Education Loan for you?

Choosing the ideal lender

To get an Education Loan at some of the most affordable Education Loan interest rates and tenure, Axis Bank is an ideal choice. With loan amounts starting from ₹50,000, you can seamlessly finance your studies whether in India or abroad. The amount is disbursed in stages based on the progress in your education. So why wait, fulfil your study dreams with Axis Bank.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.