Many students aspire to study at top universities in India and abroad, and an education loan serves as a crucial financial aid in fulfilling this dream. However, securing an education loan requires meeting certain education loan eligibility criteria set by banks and financial institutions. These criteria vary from one lender to another, but some fundamental aspects remain consistent.
Understanding the education loan eligibility criteria is crucial for students seeking financial assistance for their higher studies. This blog aims to provide a detailed understanding of the eligibility for education loans to study in India or abroad. This includes meeting specific academic, financial, and nationality-related requirements set by banks and government-backed schemes. Let’s explore these criteria in detail.
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Education Loan Eligibility Criteria
To apply for an education loan, students must meet certain academic, financial, and nationality-related criteria. The eligibility criteria for education loans differ from bank to bank. Even for different government education loan schemes the eligibility criteria vary depending upon the scheme.
However, a few common factors are taken into consideration by all lenders. The general eligibility criteria that most banks and financial institutions consider include:
Nationality and Residency
- The applicant must be an Indian citizen.
- Non-resident Indians (NRIs), Persons of Indian Origin (PIOs), and Overseas Citizens of India (OCIs) may also be eligible under specific loan schemes.
- For state-specific schemes, the applicant must be a resident of that state (e.g., Himachal Pradesh Mukhyamantri Gyandeep Yojana requires the applicant to be from Himachal Pradesh).
Academic Eligibility
- The student must have secured admission to a recognized university in India or abroad.
- Admission should be obtained through a merit-based selection process, entrance examination, or a qualifying test.
- Many banks require a minimum of 60% marks in Class 12th (some government schemes may relax this requirement for certain categories).
- For postgraduate loans, the applicant must have completed an undergraduate degree with a satisfactory academic record.
- Courses eligible for education loans include undergraduate, postgraduate, PhD, diploma, and technical/professional programs.
Age Criteria
- The age of the applicant should typically be between 16 to 35 years at the time of loan application.
- For working professionals applying for higher studies, the age limit may be extended depending on the lender.
Financial & Income Eligibility
- If the applicant is below 18 years, the loan must be applied for by their parents or guardians as co-applicants.
- A co-applicant with a stable source of income (parent/guardian/spouse) is usually required.
- Most banks assess the financial background of the co-applicant to determine loan repayment capacity.
- The minimum family income for an education loan varies by lender but generally, a co-applicant should have a stable income of at least INR 3-4 lakhs per annum.
Collateral & Security Requirements
Some government-backed schemes, like the Credit Guarantee Fund Scheme for Education Loans (CGFSEL), provide loans without collateral for eligible students.
Loans up to INR 7.5 lakh generally do not require collateral.
For loans exceeding INR 7.5 lakh, banks may require collateral in the form of property, fixed deposits, or third-party guarantees.
Education Loan Eligibility Marks & Academic Requirements
Many banks require students to have a minimum academic performance to be eligible for a loan. Here are a few examples:
| Education Loan Scheme | Academic Requirement | Category | Eligible Courses |
|---|---|---|---|
| E-Samaj Kalyan Gujarat Education Loan | Minimum 60% in Class 12 | SC, OBC, EWS | UG, PG, PhD (Technical & Professional) |
| Himachal Pradesh Mukhyamantri Gyandeep Yojana | Passed Class 12 | Native of Himachal Pradesh | Professional & Technical Courses |
| Vidya Lakshmi Portal Education Loan | Completed 10+2 or equivalent | All Categories | UG, PG, PhD, and other approved courses |
Also Read: Documents Required for Education Loan
Additional Eligibility Criteria For Education Loan
Certain lenders and education loan schemes follow additional eligibility requirements that students must follow. To understand it better let’s look at a few of such eligibility requirements:
Nativity
To avail of educational loans under state-specific schemes, the applicant must be a native of that state. For example, to apply for an education loan under the E-Samaj Kalyan Gujarat Education Loan Scheme, you have to be a native of Gujarat.
Course Requirements
Certain education loan schemes like the KBL Vidyanidhi Quick Education Loan Scheme specifically mention the list of eligible courses. A student can only apply for the loan if his course of study comes under this scheme’s approved eligible courses. Furthermore, a few loan schemes only offer loans for professional and technical courses. You must check with your lender if your course is eligible for a loan or not.
Specific Categories
Additionally, certain schemes are designed for specific categories of students like Other Backward Classes (OBCs), Scheduled Castes (SCs), Economically Weaker Sections (EWSs), etc. You can only apply for these schemes if you belong to the eligible categories as mentioned in the schemes.
Further Read: Latest RBI Regulations on Credit Report
Understanding the eligibility for education loan in SBI and other banks is essential before applying. Students must carefully check the requirements for student loans in India, verify the education loan documents required, and ensure they meet the education loan eligibility mark set by banks. Always compare loan options and read the terms before applying.
FAQs on Eligibility Criteria for Education Loan
Students who have secured admission to a higher education course in recognised institutions in India or abroad, through entrance tests or merit-based criteria or students who have secured admission to a reputed course. Banks also ask for documents displaying the regular income of the co-applicant.
Most banks provide education loans to students who have secured at least 60% marks in their class 12th examination. However, you need to check with your respective bank if you are eligible for a loan if you have secured 50% marks or less.
Yes, there are special government schemes that provide loans to students from low-income families. A few examples of such schemes are Dr. Ambedkar’s Scheme of Interest Subsidy on Education Loan and E-Samaj Kalyan Gujarat Education Loan Scheme.
The limit of the loan depends on the bank or the scheme you are applying for. For example, if you apply through the Vidya Lakshmi portal then some banks provide education loans from INR 4 Lakhs to INR 1.5 crores. However, this does not mean everyone is eligible for it. Students must check what are the requirements before applying.
A student must have secured admission to a reputed university to apply for a loan. A student also needs to be an Indian national and must be above 16 years of age.
To apply for an education loan, you’ll typically need identity, address, and income proof, academic records, admission letters, and bank statements. Co-applicants or guarantors must also provide their KYC and income documents.
Some banks like ICICI might offer education loans even with lower marks if other education loan eligibility criteria are met. Check with individual banks for their specific policies.
To improve your chances of securing an education loan with 50% marks, provide a co-applicant with a strong financial background and any available collateral. Meeting all other education loan eligibility criteria is essential.
Hope this blog helped you understand the eligibility criteria for education loans. Students must compare the eligibility criteria before applying for education loans and must read the terms and conditions carefully. If you have any questions, feel free to ask them in the comments section below.
To know more about education loans, the best international 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.
| Additional Reads |
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| Education Loan Restructure: Check All Major Details Here |
| How To Convert Secured Loans To Unsecured Loans? |
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