An education loan is the choice of many when it comes to meeting expenses for pursuing higher studies in India. With college fees increasing every year, many choose education loans as a convenient option.
In case you are wondering, fees for undergraduate engineering courses could range from Rs 5-15 lakh, while a five-year medical course at a private college could cost up to Rs 50 lakh. Fees for postgraduate courses, such as those in management, could exceed Rs 10 lakh.
You may have to depend on your savings and other financial means to get enrolled in the course but this is especially difficult for young professionals attempting to pursue part-time courses to advance their careers. In this article, we will go over the specifics of selecting the best online education loan for you.
Why should you take a loan?
An online education loan could be extremely beneficial in covering the entire cost of an educational course. Many parents nowadays decide to let their children take out education loans just to ensure they learn financial discipline. Parents typically save for emergencies or unforeseen expenses.
Usually, it is the first loan a student avails. And, if repaid on time, students can build good credit histories; this will be of immense help when they seek to avail other loans in the future. With timely education loan repayment histories, students get pre-approved loans for other requirements.
As Benjamin Franklin once said, “An investment in knowledge pays the best interest.” So you can invest in knowledge by applying for admission to your dream university in India.
Completing higher education has become the most valuable asset in today’s world. However, education loans have some limitations and cannot be taken for every kind of course. In India, for example, it is not usually possible to obtain an educational loan for online courses, which are a popular alternative to expensive full-time degree programs, especially after COVID-19.
Some lenders (NBFCs), however, are open these days to fund certification and vocational courses, as Technical and Vocational Education and Training (TVET) holds great potential for economic mobility and development in India, which has one of the largest working age, unemployed populations in the world. Read more about NSDC’s partnership with Varthana to provide financial assistance to students for skill development courses here.
Eligibility check: Apply for the right online education loan
Before loaning money to any student, lenders (Banks, NBFCs, or other financial institutions) set certain requirements for applicants to meet.
1. Academic background of the student: The lender examines the applicant’s academic background, credit history, and achievements.
2. Course: The lender also conducts research into the applicant’s chosen course of study. They check to see if the applicant’s course is credited or not.
3. Institution: The lender also takes into account the institution the applicant has applied to. The accreditation and reputation of the institution are extremely important.
4. Collateral: The applicant’s ability to provide collateral for the loan. The bank will consider the type of collateral provided as well as its value.
5. Co-borrowers or guarantors: Parents, guardians, or another acceptable third party can act as a co-borrower or guarantor for the applicant. They’ll also check the career history and credibility of the co-borrower.
Courses eligible for online educational loans:
With a Varthana education loan, you can easily pay off tuition fees, examination fees, housing or accommodation costs, travel expenditures, and associated pre-admission charges. The eligibility criteria for personal finance for education are determined by the lending policies of the institution and the accompanying job-related results.
Lenders will lend money to students to study nearly anything as long as the course and institution are approved by the relevant authorities or have a good reputation. Students with a good academic record and most importantly Indian citizens will be eligible for the domestic education loan. Those who have been accepted to career-oriented courses such as Medicine, Engineering, and Management at the graduate or post-graduate level are also considered.
The following courses are eligible for education loans in India:
Studies in India
Graduation, post-graduation, and technical/professional courses from reputed colleges/universities, should be recognised by the UGC/Government, AICTE/Department of Electronics/IMC, and autonomous institutions such as IIM, IIT, and others. Any courses leading to a degree/diploma from reputable Institutes/Colleges/Universities in India for studies.
Short-term courses in soft skills, such as animation, English learning, catering, spoken English, data science, Artificial Intelligence (AI), digital marketing, and event management, are now also eligible for loans, thanks to their growing popularity. However, it’s a good idea to check with the lender to see if they provide a short-term education loan.
Documents required for online education loan
Varthana provides quick and hassle-free online education loans once you complete the application and submit documents. Find out what documents you’ll need to apply for a Varthana Education Loan.
Students who want to take out a loan to study in the country can provide the following documents:
- KYC documents
- Proof of admission to the course (Offer letter/bonafide letter from the institution)
- Schedule of expenses (Fee structure)
Students who are interested to take out a loan with a co-borrower (Parent/Spouse/Guardian) can provide the following general documents:
- KYC documents
- Proof of current residence (Gas bill, rental agreement or any KYC)
- Income documents
Note: For retired co-borrowers, we need only their IDs, residential proof, 6 months’ bank statement and pension order. Students and co-borrowers can also provide some income proof documents. Click here to know more.
Typically we will check on the following criteria to approve the student loan:
- The applicant should be an Indian citizen
- The applicant should be of age 18-35 years
- The applicant should have a good academic record
- The applicant should have secured admission or seeking admission to a recognised University/institution
No doubt online education loans are considered a popular financing option. It offers both accessibility and flexibility to users. In a way, Varthana education loan helps you to do better in life and helps you to reach your true potential. It also helps young professionals become independent by taking charge of their own finances without having to depend on family/friends.
Therefore, never let a lack of funds restrict your growth. Opt for a Varthana education loan to fund your higher studies. Apply now