Education loan is vastly helpful for people looking to pursue higher studies, both in a foreign country or within India. The financial help can be of great aid in paying off the tuition fees and even the travel allowance in case of foreign degrees. However, not every student is eligible for such a loan. Lenders check the background of the student thoroughly before sanctioning or rejecting a loan.
Application for such a loan has now been made much easier due to the arrival of the loan apps. Such apps allow the user to apply for the loan from within their home, without having to undergo the hassle of the standard loan application procedure. Still, people must keep in mind the eligibility criteria for such a loan.
Eligibility criteria for education loan
• The first thing that the lenders check in such a case is the academic background of the student for whom the loan is being taken. This is done because the lenders need to check whether the student would be able to perform well in his upcoming course and get a good job. This will determine whether he/she will be able to pay off the loan in the future.
• The lender will also check the course for which the loan is being sought. Most institutions will reject lending money for courses that are not recognized universally or properly accredited. This is because the chances of securing a proper job after such a course are low, which in turn means that the student may not be able to repay the money.
• Usually, for education loans, a guardian or parent of the student in question acts as the co-borrower. This means that failing the repayment of the loan by the student; this co-borrower is liable to pay. So, the lenders will also look into the age and the income of the co-borrower before sanctioning an education loan.
• Finally, the education loan is usually sanctioned against collateral. This collateral may be a property or any other asset. In such a case, the lender will determine the value of the collateral and figure out whether the price of the same covers the loan amount as well as the interest payable.
Remember these pointers before applying for the education loan. Do not forget to check out the education loan interest rates as well. Ensure that you pick a loan where the rates are affordable and where you or your child will be able to pay it off after the completion of school.
Application for such a loan has now been made much easier due to the arrival of the loan apps. Such apps allow the user to apply for the loan from within their home, without having to undergo the hassle of the standard loan application procedure. Still, people must keep in mind the eligibility criteria for such a loan.
Eligibility criteria for education loan
• The first thing that the lenders check in such a case is the academic background of the student for whom the loan is being taken. This is done because the lenders need to check whether the student would be able to perform well in his upcoming course and get a good job. This will determine whether he/she will be able to pay off the loan in the future.
• The lender will also check the course for which the loan is being sought. Most institutions will reject lending money for courses that are not recognized universally or properly accredited. This is because the chances of securing a proper job after such a course are low, which in turn means that the student may not be able to repay the money.
• Usually, for education loans, a guardian or parent of the student in question acts as the co-borrower. This means that failing the repayment of the loan by the student; this co-borrower is liable to pay. So, the lenders will also look into the age and the income of the co-borrower before sanctioning an education loan.
• Finally, the education loan is usually sanctioned against collateral. This collateral may be a property or any other asset. In such a case, the lender will determine the value of the collateral and figure out whether the price of the same covers the loan amount as well as the interest payable.
Remember these pointers before applying for the education loan. Do not forget to check out the education loan interest rates as well. Ensure that you pick a loan where the rates are affordable and where you or your child will be able to pay it off after the completion of school.
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