How to Apply for a Student Loan in India

The Indian education loan market was estimated at around Rs.93,000 crore as of the end of July 2020. In other words, an increasing number of students are willing to avail credit to fund their higher education from premier institutions in India or abroad.

There are two types of study loans in India, secured and unsecured. And almost all financial institutions offer these loans to eligible candidates. However, before opting for funds, individuals need to know the application process to facilitate the speedy disbursal of funds. 

If you’re unsure about how to avail an education loan in India, you can refer to the step by step guide below.

Step 1: Fill the application form 

After deciding the loan requirement, applicants need to fill up a study loan application form, mentioning basic information, such as name, mobile number, email ID, personal information, educational qualification, and parents’ income details. Applicants can fill up and submit the form online to proceed with the borrowing process. 

Step 2: Discuss with a lender

After submitting the education loan application form, you will have to sit with a loan manager who will ask for details regarding your educational background, the chosen institution, the placement process, the course selected, and current scholarship details (if any). 

Individuals who are not availing a scholarship scheme and still aspire to pursue courses from a prestigious institution need access to substantial funding. In such cases, they can opt for a loan against property and raise enough funds for self-financed courses. 

Step 3: Relevant document submission

The next step requires individuals to submit all relevant documents to prove their eligibility for the study loan. 

Below listed are some of the documents required for an education loan.

• KYC of the applicant
• 2 passport-sized photographs.
• Certificates and mark sheets of all exams passed
• Proof of admission to the course, including the original stamp and signature of the institution head
• Scholarship letter copy (if applicable)
• Bank account statement of the borrower (student/parent/guardian) for the last 6 months
• ITR documents for the last 2 years

Applicants can upload the documents online for verification further. 

The documents needed to apply for a loan against property are different and can vary from one lender to another.

Step 4: Loan status 

After assessing the eligibility and documents, the lender decides if the study loan will be approved or not. In most cases, you need to have a guarantor if you are a minor or unemployed. 

In such cases, lenders also check the credit score of the guarantor. Since a LAP is secured with a high-stake asset, lenders generally approve the funds quickly. For the same reason, they also offer lower mortgage loan rates that facilitate repayment. 

Step 5: Loan disbursal 

Once all the formalities are completed, the lender will disburse the amount directly to your account if you opt for a loan against property. Otherwise, the lender will pay the fees on your behalf. Leading financial institutions offer LAP loans for education up to Rs.3.5 crore, with the disbursal taking as little as 4 days. 

Lenders also extend pre-approved offers that simplify and expedite the credit availing process. Besides education loan against property, these offers are also available on other financial products such as home loans. All you have to do is enter your name and contact number to check your pre-approved offer. 

Features of LAP for education 

Listed below are a few things to know before applying for a loan against property for education. 

• Besides course fees, individuals can also finance travel costs, admission fees, accommodation, etc.
• The repayment tenor can extend up to 20 years; you can use a LAP EMI calculator to check which tenor will suit you best
• Applicants can opt for a flexi loan facility wherein the property loan interest rate applies only to the fund utilised

Overall, a study loan helps students bear the expenses of higher studies without liquidating their savings. On the other hand, with a loan against property, they can also gain funds for other expenses apart from the fees. 

What are the perks of the education loan?

• A large amount

As per your eligibility, you may borrow up to Rs.1 crore from top lenders. You can use the LAP EMI calculator to know how much EMI you will pay. Sanctioned money can also be known after using the mortgage loan eligibility calculator. 

• Easy loan disbursal

Once you get the loan approval, leading banks and NBFCs in India don’t take much time to disburse the amount. You may have to wait only up to 96 hours to get your approved study loan amount credited into your bank account. 

• Minimal documentation

The education loan eligibility criteria and the documents required for the education loan is uncomplicated and minimal. What’s more, reputed lenders also collect your documents from your doorsteps. It helps you stay protected during the crucial COVID-19 surge. 

If you wish to avail of a significant amount, you can check out your education loan against property eligibility right away.     

• Flexible repayment tenor

There is no need to worry about repaying the education loan faster and hurting your wallets. It is possible to stretch your loan amount over a tenor ranging 2 and 20 years.