Education Loan Eligibility Criteria for Studying Abroad in 2024

Eligibility Criteria for Secured Overseas Education Loans

For any secured loan, the applicant must provide an asset as collateral. This pledged asset can be used by the lender in case the borrower defaults the repayment. 

The following points merit consideration while discussing education loan eligibility criteria:

Age and Citizenship	The applicant must be an Indian citizen aged 18 or above
Credit Score	Student’s parents should have a CIBIL score of more than 700 and must have a good credit history
Agricultural Land	As per RBI norms, if tax is paid to the Gram Panchayat or Nagar Panchayat for your agricultural land or farmhouse, then it can not be used as collateral for secured loans.
Registration	The property should be registered with the Municipal Corporation, Improvement Trust property and Nagar Parishad.
Sanctioned Documents	There should be proper sanction of the layout plans and building plans of the property documents from the respective departments.
Value	Typically banks allow loans for the 80-85% of the total market value of the property.

 

Factors Enhancing Education Loan Eligibility

Once you have an idea about education loan requirements, have a look at some factors that can enhance your chances of getting an education loan eligibility:

• Strong Academic Record: High scores in previous studies and standardized tests can enhance your eligibility.
• Admission to a Recognized Institution: Securing admission to a recognized foreign university makes you a more attractive candidate.
• Co-Applicant’s Financial Strength: A co-applicant with a stable income, good credit score, and solid financial background boosts your loan approval chances.
• Work Experience: Relevant work experience, especially if applying for a postgraduate course, can work in your favor.

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Bank Wise Education Loan Eligibility in India 

Different lenders have different sets of education loan criteria. Have a detailed look at the different features of education loans provided by multiple private banks, public banks, and NBFCs:

Features	Private Banks`	Public Banks	NBFCs
Lenders	SBI (State Bank of India) BOB (Bank of Baroda), UBI (Union Bank of India)	Axis Bank, ICICI Bank, IDFC First Bank	Avanse, Auxilo, Incred
Loan Amount	With Collateral – up to INR 1.5 Cr Without collateral – INR 7.5 Lakhs	With Collateral – Up to INR 60 Lakhs Without collateral – INR 35 – 40 Lakhs	With Collateral – Up to INR 60 Lakhs Without collateral – INR 30 – 40 Lakhs
Interest Rates	8.75% – 11.15%	Secured – 10% – 11% Unsecured – 11% – 13%	Secured – 11% Unsecured – 13% – 14%
Processing Charges	INR 10,000 + GST + Property valuation charges	1% – 2% of the loan amount	1% – 2% of the loan amount

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Documents Required for Education Loans

When applying for an education loan the required documents typically include:

• Admission Letter: A copy of your admission letter or offer of acceptance from the university where you will be studying.
• Cost of Attendance: Documentation from the university detailing the total cost of attendance (tuition fees, living expenses, etc.) for the academic year.
• Loan Application Form: Completed loan application form provided by the lender or financial institution with affixed photographs.
• Identity Proof: Typically, a copy of your passport, and/or Aadhar card.
• Academic Records: Copies of your academic transcripts and certificates, including proof of previous degrees or qualifications. (Marksheet of class 10th and 12th)
• Collateral Documents (if applicable): If you are providing collateral (such as property or fixed deposits) for the loan, documents related to the collateral may be required.
• Income Proof: If you or your sponsor (if applicable) are employed, documents such as salary slips, income tax returns, or bank statements may be required to demonstrate income and repayment capacity.
• Visa Documentation: Proof of visa status (if already obtained) or documentation related to your visa application process.

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Education Loan Documents Required From Co-Applicants

In certain circumstances, the lender may require a co-applicant as an education loan requirement. In such cases, apart from the above-mentioned documents, the following additional documents are also needed:

• Proof of Identity: PAN/ Passport/ Driver’s License/ Voter ID card
• Proof of residence: Recent copy of Telephone Bill/ Electricity Bill/Water Bill/ Piped Gas Bill 
• Photographs: 2 recent passport-sized photographs
• Loan statement: If applicable, loan statement for the previous 1 year.

Documents Required for Income Proof for Salaried Co-Applicant/ Guarantor:

In case there is a co-applicant or a guarantor is involved in the loan process, some additional documentation is required by the lender to assess the income eligibility such as:

If the co-applicant or guarantor is salaried	1. Salary Slip or Salary Certificate for the last 3 months 2. Form 16 for the last 2 years or a copy of IT Returns for the last 2 financial years 3. Bank account statement for the last 6 months (of Salary Account)
If the co-applicant or guarantor is self-employed	1. Business address proof (Registration certificate, utility bill, etc.) 2. IT returns for the last 2 years in the name of the business 3. TDS Certificate 4. Certificate of qualification (for C.A. / Doctor and other professionals) 5. Bank account statement for the last 6 months

 

EMI and Interest Rate on Education Loans by Top Indian Banks

EMI or Equated Monthly Installments and interest rates are prime considerations while availing an education loan as they can highly influence the decision. Suppose you take an education loan of INR 20 Lakhs, then the following comparison of EMI and interest rates may come in handy for you:

Banks	EMI Amount (INR)	Interest Rate p.a.
State Bank of India	31,472	8.30%
ICICI Bank	32,688	9.85%
Punjab National Bank	31,472	8.30%
Bank of Baroda	32,026	8.85%
UCO Bank	32,739	9.55%
Federal Bank	35,627	12.30%
Axis Bank	37,149	13.70%
Canara Bank	32,332	9.15%

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Conclusion

Understanding education loan eligibility is very important before applying for any education loan. Once you’re ensured that you meet the eligibility in terms of academic, financial, and course-related requirements, your chances to crack a loan increase. With HiWiPay, you can apply to multiple lenders at the same time. Just fill out the form with the required information and we’ll connect you with the most suitable lenders. They will connect with you directly with personalized offers. Apply for your dream education loan now!

FAQs of Education Loan Eligibility