Documents Required for a Loan Capability Certificate: Here are the Details

Documents Required for a Loan Capability Certificate

Students wishing to study abroad are required to go through a lot of paperwork. From the application process for the university to the application process for the visa, the applicants are required to submit a lot of documents for verification. Therefore, the prior knowledge of documents required at various stages becomes quite crucial. In this blog, we will cover documents required for a loan capability certificate so that you can prepare them beforehand. Keep reading this blog to know more! 

Must Read: Difference Between Loan Sanction Letter and Loan Capability Certificate 

What is a Loan Capability Certificate? 

A loan capability certificate is a type of financial support document which is issued by the bank showcasing their willingness to provide financial aid to the student. This certificate testifies to the adequacy of funds with the student during the visa application process signifying that they will be able to live comfortably abroad if their visa gets approved. Apart from this certificate, there are other documents which serve as evidence of the financial support, these are – CA certificates, loan approval certificates, affidavits of sponsorship, etc. Coming to the loan capability certificate, this document generally consists of information like: 

  • Loan amount sanctioned by the lender 
  • Student’s name 
  • The willingness of the bank to provide loans to the student 
  • Signature of bank authorities 

Also Read: Understanding the Eligibility Criteria for Loan Capability Certificate? 

Documents Required for a Loan Capability Certificate 

Mentioned below are the general documents required for a loan capability certificate: 

  • Application form – For a loan capability certificate, lenders usually ask the borrower to fill out an application form. In this form, the borrower is required to fill out details about themselves which include their employment status, their income and other financial details. 
  • Proof of Identity – As proof of identity the borrower will be required to submit any of the government-issued photo ID cards like a driver’s license, passport, or Aadhar card. 
  • Income documents – If the borrower is working, then depending on the source of the income they will be required to submit the following documents: 
  • Self-Employed Individuals: Income tax returns, bank account statements of the business, and profit and loss statements. 
  • Salary Earners: Salary slips or pay stubs for the last few months.
  • Contract/Freelance Workers: Bank account statements and income tax returns. 
  • Proof of Address – A borrower is required to submit a proof of address which can be any one of the documents like rental agreements, utility bills, or a voter ID card. 
  • Employment Verification – To verify the employment status of the borrower, the lender may contact the employer of the borrower to know about their salary and job stability.
  • Credit Report – To assess the creditworthiness of the borrower, the lender will require the credit report of the borrower. However, the borrower is not required to provide this as the lender will obtain the report themselves. 
  • Bank Statement – To show the transaction history and financial stability, the borrower will be required to provide the bank statement to the lender. 
  • Additional Documents – Based on the specific requirements, the lender may ask for some additional documents from the borrower. 
  • Declaration of other liabilities – If the borrower has any other outstanding debts or liabilities then they might need to declare that beforehand to the lender. 
  • Income Tax Returns – The past few years’ income tax returns of the lender can help the lender assess the financial stability of the borrower. 
  • Photographs – For documentation purposes, passport-size photographs of the borrower will be required by the lender. 

Also Read: Limitations of a Loan Capability Certificate 

FAQs

What is a loan capability certificate?

A loan capability certificate is issued by the bank in which they declare that they are willing to provide financial assistance to the student for studying abroad. 

What are financial support documents?

The documents that are accepted as evidence of financial support. Some examples of these documents are a CA certificate, Loan approval letter, Scholarship approval, grant letters, etc. 

What is a loan approval letter? 

Just like a loan capability certificate, a loan approval letter can also be submitted as evidence of financial support. This bank contains the approval of the bank and the amount that the bank is going to offer the student for their studies abroad. 

This was everything about the documents required for a loan capability certificate! To know more about the loan capability certificate, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience. Follow our social media handles on Twitter, LinkedIn and Instagram

About Prachi Gupta

Prachi is a SEO content writer who have written many well researched blogs in the field of Finance and Education loans. Through her critical thinking and problem solving skills she strives to help students so that they can overcome financial hurdles in their education journey. She comes up with creative answers for students looking for financial aid by fusing her in-depth financial expertise with her compassionate attitude. She is a sought-after expert in the sector due to her dedication to demystifying complicated financial topics. Numerous students have received the advice they require from her articles and thorough guides, enabling them to overcome financial obstacles and realise their educational aspirations.

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