A child’s education is every parent’s primary concern and priority. However, the costs of higher education can be expensive. These days, an MBA degree costs anywhere between Rs. 7.5 lakh and Rs. 25 lakh, while an engineering degree can cost approximately Rs. 8 lakh.
As per CARE Ratings, the average expenditure for a medical degree is currently Rs. 71,620 per year. Education overseas can cost more than Rs. 30 lakh, considering the high tuition fees and living costs abroad. If you fall short of money while funding your child’s career prospects, student loans can come to your rescue. An education loan can help your children realize their aspiration of pursuing higher education in any field, whether in India or overseas.
Any meritorious student can apply for student loan. However, personal loan eligibility criteria vary from one financial institution to another You need to be aware of the general guidelines before you approach a lender to avoid your loan application being rejected. Here is a brief checklist:
Additional Read – Just ask yourself 5 questions before you avail an education loan
Common factors that lenders consider to determine education loan eligibility:
Citizenship: The student applying for the education loan needs to be an Indian citizen.
Age: The minimum and maximum age limits differ for each lender. A student who is at least 16 years old can avail of education loans with minimum documentation.
Academic background: The lender needs to be sure that the student will be able to repay the loan by completing the course and securing a high-paying job. A sound academic track record will, therefore, help your child obtain a substantial loan amount. You will have to produce mark sheets and certificates as proof of your child’s merit.
Educational institution: The reputation of the university or college where the applicant is admitted also affects the education loan process. Picking an approved or accredited educational institute is essential. You will need to furnish the admission letter issued by the institute while applying for the personal loan for education
The income of the student or parents: It is essential for either the parents or the applicant seeking the loan to have a stable income. The lender will ask for a proof of your income like past bank statements, salary slips, and income tax returns. Your income is a crucial element as it determines your education loan interest rate.
Collateral and guarantor: Most financial institutions will ask for a guarantor or some collateral, especially if you are looking for a higher loan amount. The lender will consider the job profile and income of the guarantor and might ask for salary slips and IT returns.
Credit history of co-applicants: As with all loans, a high credit score is essential for the approval of your education loan. As a parent, you may have to be the co-applicant if your child is unemployed. In this case, your credit history will also be considered.
Additional Read: Things to Look Out for While Signing Education Loan Documents
Do not let the lack of funds restrict your child’s future. Apply for education loan online from Tata Capital with competitive interest rates and proudly watch your child’s career graph soar.