Education Loan Eligibility Criteria 2024

Higher education abroad has now become a gateway to success and career advancement. However, the rising costs of education can often pose a financial barrier for many aspiring students. This is where education loans for abroad studies come into play, providing a lifeline of financial support. To secure an education loan, it is essential to understand the eligibility criteria set by lenders. Before you apply for an education loan, it's important to understand the educational loan eligibility that lenders use to evaluate loan applications.

What is Education Loan?

An education loan is a specialized type of loan designed to support students in funding their educational pursuits. It covers expenses such as tuition fees, books, living costs, and other necessary educational charges. Educational loan eligibility is a crucial aspect of determining who can access these loans. It typically involves eligibility criteria such as the applicant's age, academic performance, the course and institution selected, and the financial stability of the co-applicant or guarantor. 

Education Loan Eligibility Criteria for Abroad Studies

To get an education loan for studying abroad, applicants have to fulfill a few requirements for student loans. Whether you can get a loan or not depends on things like how well you did in school, what you want to study, and where you want to study. This is what we call study loan eligibility. Also, both you and your co-applicant need to have a good track record of managing money. This is part of what's known as student loan eligibility. It's like a way for the bank or loan place to make sure you're a good bet for getting and paying back the loan for your studies in another country.

• To meet the education loan eligibility in India, the applicant must be an Indian citizen and should be between the ages of 18 and 35. 
• A critical aspect of student loan requirements is your academic performance. Candidates should have scored at least 50% in their previous qualifications. This criterion underscores the importance banks place on your academic dedication and potential.
• Candidates who apply for an education loan with collateral should fulfill the following criteria-

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  The collateral value should be at least 90% of the loan amount required. 
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  The applicant must have documents, such as the Registered sale deed, chain documents (evidencing the ownership history of the property for 30 years), property tax receipt, and occupancy proof. 

• A pivotal factor in education loan eligibility is the CIBIL score. For both applicants and co-applicants (usually a parent or guardian), a CIBIL score of no less than 700 is required. This score reflects your creditworthiness and is a key determinant of your loan approval chances.

To streamline your preparation, consider using an education loan eligibility calculator. This tool helps you understand how much loan you might be eligible for based on your qualifications, the cost of your intended program, and other study loan requirements. Ensuring you meet these 'student loan requirements' will significantly enhance your prospects of securing an education loan for your studies abroad.

Tips to Increase Your Education Loan Approval Chances

Several factors can enhance your study loan eligibility. These include:

• Maintaining a consistent and impressive academic record throughout your educational journey reflects your dedication and ability to excel, and can positively impact your eligibility for an education loan.
• Securing admission to renowned or top-tier institutes or universities enhances your credibility as a student and increases your loan approval chances.
• Having a strong financial background, either through your parents, guardians, or a co-borrower, assures lenders that you have the means to repay the loan.
• Demonstrating good potential for future employment and income generation after completing your education can improve your eligibility

Factors That Can Improve Your Eligibility for an Education Loan

To secure financial aid, banks carefully assess a candidate's eligibility for an education loan. Key factors considered include the applicant's academic performance, the course of study they intend to pursue, and their current admission status. Here are some ways to enhance your eligibility:

• Achieving high grades or ranking in qualifying exams
• Maintaining a strong academic record
• Gaining admission to a reputable or top-tier institute or university
• Having a financially stable parent, guardian, or co-borrower
• Demonstrating strong prospects for future employment or income generation

Documents Required for an Education Loan

Below listed are the education loan documents required list -

Applicants documents:

• Identity proof: PAN/ Passport/ Driver’s License/ Voter ID card or government-issued identification document
• Education loan application form
• Address proof: recent copy of telephone bill/ electricity bill/water bill/ piped gas bill/ Driving license/ Aadhaar card
• Past academic record
• 10th standard mark sheet
• 12th standard mark sheet
• Undergraduate result (semester-wise)
• Entrance exam results (e.g. GMAT, GRE, TOEFL, etc.)
• Proof of admission: admission letter (A conditional admission letter is also applicable).
• Statement of expenses
• 2 passport-size photographs
• Loan A/C statement of one year (if applicable)
• Bank account statement of the student (if applicable)

Co-applicant’s documents:

• Identity proof: PAN/ Passport/ Driver’s license/ Voter ID card or government-issued identification document
• Address proof: recent copy of telephone bill/ electricity, water, piped gas bill or copy of Driving license/ Aadhaar card
• 2 passport-size photographs
• Co-borrowers bank account statement for the last 6 months
• In case of another ongoing loan, then the loan A/C statement of 1 year

Income proof for salaried co-applicant/guarantor:

• Salary slips for the last 3 months
• Copy of Form 16 of the last 2 years or copy
• Bank account statement for the last 6 months (Salary account)
• A brief statement of assets & liabilities of parent/ guardian/ other co-borrower

Income proof for self-employed co-applicant/guarantor:

• Business address proof
• Last 2 years IT returns ( If IT Payee)
• TDS certificate (Form 16A, if applicable)
• Certificate of qualification (for C.A./ doctor and other professionals)
• Brief statement of assets & liabilities of parent/ guardian/ other co-borrower
• Bank account statement for the last 6 months

Education loan eligibility is influenced by a range of factors, including academic qualifications, course of study, financial stability, collateral availability, and creditworthiness. By understanding these criteria, aspiring students can navigate the loan application process with confidence and increase their chances of securing financial support for higher education. To help you gauge your chances for an education loan accurately, GyanDhan has introduced an education loan eligibility tool that carefully evaluates your profile and then suggests the amount and lenders you are eligible for. Our team of dedicated counselors thoroughly evaluates your profile and provides personalized recommendations for the most suitable lenders to meet your specific loan requirements. We take care of the entire process, ensuring a smooth and hassle-free education loan journey for you. To start your education loan journey, you check your loan eligibility and leave the rest to us.

Frequently Asked Questions