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How to Get a Student Loan? Research Team | Posted On Tuesday, April 30,2019, 06:16 PM

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How to Get a Student Loan?



What is Student Loan?

A Student loan is offered to applicants who want to enjoy a quality education.  Student loans are an ideal option for meritorious students, who want to study, but struggle with financial constraints. The concept of banks paying for your education while you study and then repaying them once you start earning is a boost for banks as well as your career. This type of loan covers basic fees along with other related expenses of the course.

Almost all major banks in India offer student loans. The quantum of the loan depends on the college and the course. The most significant advantage of student loans is that it can be repaid after the completion of the course (take a look at moratorium period), or after securing a job, whichever is earlier.

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How to Get a Student Loan?

You can apply for a student loan at any bank or NBFC. Any individual who wants to pursue higher education in India or abroad, can avail student loan provided he is a citizen of India and has already qualified for the higher secondary examination. To get a student’s loan, the borrower must submit the loan application form along with requisite documents at the bank. No collateral is required to get student loan. However, parents, siblings or a guardian has to execute the loan as a co-borrower.

SEE ALSO: Home Articles Personal Loan For Students

Steps to Look Before Getting a Student Loan:

Estimate your Expenses

Before applying for student loan, consider the various expenses like tuition fees, hostel charges, cost of study material and other expenses like lab fees/ project fees, caution deposit and the cost of lodging and boarding, which is not covered under the student loan.

The money required for pursuing education in a foreign institution is much more than that required for completing the course in India. Make a list of the possible expenses and estimate costs. Once you know the possible expenditure, you will be able to get an idea on how much loan you need.

Check your Eligibility

You have to check eligibility before applying for the loan. This helps in comfortable repayments.

Decide Tenure and Repayment

Before zeroing on any loan, the applicant must keep in mind the different aspects related to the loan. You must go through the list of all the student loans offered by different banks and financial institutions and choose the one that offers flexible tenure. Look out for bank charges like processing fees, prepayment charges, penalties for late payment and EMIs.

Make your Application:

A student loan requires minimal documentation. Check with your bank and get all the documents handy. Submit your loan application along with all the necessary documents. The amount of money sanctioned and the repayment period depends on the course you have enrolled. Talk to your bank on the processing time, as these loans are disbursed quickly.

Student Loan Eligibility Criteria:

To get a student loan from a bank or a financial institution, the applicant must fulfil some eligibility criteria. Listed below are the general eligibility criteria for student loan:

  • The applicant must be an Indian citizen.
  • The applicant must belong to the age group of 16-35 years.
  • A co-applicant is required along with the main applicant to avail a student loan.
  • Collateral is required as a security in case the loan amount is more than a specified limit.
  • The co-applicants salary must meet the minimum salary criteria specified by the banks.
  • The applicant must secure admission in a college or course before applying for the loan.

SEE ALSO: Education Loan Without Collateral

Student Loan Documents Required

To avail an education loan, the applicant must submit a specific set of documents. The documents required for the loan are the same for all banks.  The list below shows the documents that must be submitted for a student loan:

  • Proof of age: School certificate or birth certificate
  • Proof of address: Aadhaar card or Voter ID
  • Identity proof: Passport or PAN or driving license
  • Income proof of the co-applicant or guarantor
  • Bank statement of the co-applicant if required
  • Copy of the admission letter
  • Optional guarantor’s form

Student Loan Interest Rates

Interest rates on student loans are lower than personal loans. Though the rates of interest vary from bank to bank, they generally belong to the range of 11.75% to 14.75% a year. The students who secure admission in prestigious institutes like IIT or IIM can avail the student loan at a relaxed interest rate. Also, certain public sector banks provide a lower interest rate for female applicants.

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