What you should know about qualifying for an education loan

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Guide to qualifying for an education loan

Many students desire to get into their dream college and pursue higher education but the way to get there is very costly, a situation exacerbated by high education inflation. For example, if the cost of engineering education in India today is 10 lakh, the cost of education in India after 15 years would be 40 to 50 Lakh. If medical education costs Rs 25 lakh in a private college today, you can safely assume you’ll need to save Rs 1 crore in 15 years.

Don’t let financial constraints prevent you from enrolling in your dream institute. With a Varthana education loan, we vow to take care of your finances and improve your options on route to achieving something greater. In this article, we will discuss all you need to know about qualifying for an education loan.

Varthana understands your ambitions and acknowledges your merit. We are committed to helping you with the financial burden that has been weighing you down. We are here to make your journey hassle-free. Our education loan interest rates make us a better choice in the industry.

Want to apply for an education loan? Are you eligible?

Before loaning money to any student, lenders (Banks, NBFCs, or other financial institutions) set certain requirements for applicants to meet.

Factors considered:

  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 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.

Also Read:

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 education loan

Varthana education loan helps you finance your tuition fees, hostel charges, study materials, and other expenses. We provide quick and hassle-free 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.

Eligibility Process

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

Taking out an educational loan allows students to continue their studies at their preferred universities. It contributes to the growth and development of the citizens and the country. Because education loans are a long-term investment, it’s important to do your research and take your time.

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