If you are researching ways to finance your higher education, you must have come across a term called education loan sanction letter. It is considered to be one of the most important documents of your loan approval process. But what exactly is it? Find out the details in this article.
What is the sanction letter?
When you apply for a loan, you provide a set of documents along with the application form. The lender examines these documents and decides whether you are approved for the said loan amount and terms. Once approved, the institution sends a document informing you, the borrower, that you have successfully applied and received approval for the loan. This document is the sanction letter.
Thus, the sanction letter is an official document informing you that you have been approved for your education loan application. It contains all the necessary information about your loan application, such as the loan amount, your name, loan tenure, interest rate, terms and conditions, etc. After this, the lender sanctions the loan amount, and it reaches your account.
This document is only provided after you successfully apply for the loan. Soft inquiries such as contacting the financial institution representatives to understand the loan terms are not considered a loan application.
Sometimes universities require proof of financial capability before granting admission to students aspiring to study overseas. Others require a visa permit as well. However, traditionally, financial institutions require proof of admission into a university and student visa to give the sanction letter. In such cases, you can apply for a pre-approved loan sanction letter.
Additional Read: 5 Questions to ask before you avail an education loan
What are the documents required for the sanction letter?
The documentation requirements for the education loan sanction process vary across lenders. However, there are a standard set of documents that most lenders ask for. They are as follows:
- A correctly filled loan application form.
- Academic record.
- Identity proof such as PAN Card, AADHAR card, etc.
- Proof of address.
- Proof of admission.
- Statement of educational expenses such as the tuition fee, hostel fee, cost of accessories for education, and related costs.
- Income proof of the loan applicant or co-applicant.
- Bank statement of the loan applicant or the co-applicant.
- Collateral documents if applicable.
Additional Read: Things to Look Out for While Signing Education Loan Documents
Securing the sanction letter for education financing can be challenging if you do not have the correct information. This article should empower you with the knowledge to ensure hassle-free approval of your loan sanction letter.
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