As you look to plan your child’s career and consider their higher studies in a good institute in India or overseas, the question that most parents ask themselves is, how hard is it to get an education loan?
Today, education in India has become quite expensive from the school level onwards. Given the rising inflation rate, fees across the board for higher education in reputed Indian and international universities are going up yearly.
In this scenario, if you are serious about sending your child to an excellent Indian institute or abroad for higher studies, chances are high that you will be required to take an education loan.
Taking an education loan for a four-year undergrad engineering course from a private institute in India can cost you upwards of Rs. 12 lakhs in tuition fees. The same course in an international university can go up to Rs. 60 – 70 lakhs, with travel and stay extra.
Most parents today opt for an education loan to fulfill their child’s educational and career aspirations.
That brings us to the topic of this article: how hard is it to get an education loan? To understand the challenges, you must understand what the lenders look for in an education loan application.
What lenders look for while reviewing education loan applications
There are several education loans available, as RBI promotes these extensively. So most nationalized banks will offer you these loans. Here is the list of factors they consider when reviewing an education loan application:
1. Financial history of the borrower and co-borrowers
Especially in the case of undergraduate courses, parents as co-borrowers must have an excellent credit rating and must show the financial capability to meet the need for repayment, should the need arise.
2. Co-borrower or Co-applicant
While international lenders may not ask for a guarantor, most public sector/govt lenders do. They require a guarantor or co-applicant, especially if the loan is for a significant amount.
Again, the guarantor’s credit history will be scrutinized while sanctioning the loan.
3. Collateral
Public sector/nationalized banks and several private lenders need collateral to issue an education loan if the amount is enormous. The value of the collateral is worked out in light of the loan required and varies depending on the lender, but collateral is a must. There are various non-collateral options available for students as well. Most of these even offer loan amounts up to 1 crore, but it depends upon the individual and their application.
4. University of your choice
This is another crucial aspect for lenders. Most leading lenders have their preferred list of universities and courses for which they will issue loans.
So, you must ensure that the institute your child is shortlisting is on that list and an accredited educational institute that the banks recognise.
5. The academic record of the student
An excellent academic record goes a long way in assuring the lender of the child’s seriousness toward education and career.
It works as an indicator for them that the student will complete the course for which the loan is being given and will be able to repay the same by building a promising career.
Simplifying Education Loans with EduFund Abroad
EduFund can significantly ease the process of obtaining an education loan, addressing the common challenges faced by students and parents. Here’s how:
- Streamlined Application Process: EduFund offers a user-friendly online platform that simplifies the loan application process, making it less daunting for applicants. This includes clear guidance on the required documents and eligibility criteria, reducing confusion and errors.
- Wide Eligibility Range: EduFund caters to a diverse group of students, considering various factors such as academic performance and financial background. This inclusivity helps more students qualify for loans compared to traditional lenders.
- Quick Approval and Disbursement: With efficient processing and verification, EduFund aims to expedite loan approvals, often completing the process within a few weeks. This quick turnaround is crucial for students needing immediate funding for their education.
- Flexible Repayment Options: EduFund provides customizable repayment plans tailored to individual financial situations, allowing borrowers to manage their repayment comfortably after graduation.
- Access to Competitive Interest Rates: EduFund partners with multiple lenders to offer attractive interest rates starting from 8.5%, helping reduce the overall financial burden on students.
- Dedicated Support: EduFund’s team of experts is available to assist applicants throughout the loan process, providing guidance and answering any questions that may arise, ensuring a smoother experience.
