Applying for a student loan in India can go smoothly if you have all your required documents in order. Whether you are looking to pursue studies within the country or overseas, having the correct paperwork is essential for the approval of your loan application. An education loan from leading banks like ICICI Bank can help cover expenses like tuition fees, living costs, books, and other essential requirements. A certain set of documents required for Education Loan verify the student’s eligibility and the guarantor’s credibility. In this post, we will talk about the standard documentation needed for student loans to assist students in navigating the application process smoothly.
Documents Needed For an Education Loan Application
When starting the process of applying for a student loan, the initial step involves providing the documents to the bank. These documents are essential for verifying the applicant’s identity, age and place of residence. These include-
Personal Documents
- Every bank asks students to complete a loan application form with information such as personal details and educational background to kickstart the application process smoothly.
- Banks generally ask for two latest passport photos to be included with the application form for identification purposes.
- To maintain transparency in transactions, a PAN card is required for both the student and the parent/guardian for financial and tax verification purposes.
- Banks need records for correspondence purposes to validate the applicant’s address details accurately and reliably. To do so, they require documents carrying permanent address information, such as a passport, voter ID, Aadhaar card, or driving license.
- To confirm the student’s age and identity for the loan application process, you need documents such as Aadhaar Card, Passport, Voter ID or Driving License, which can be provided as proof. These documents ascertain that the applicant satisfies the age requirements for the loan.
Academic Documents
The banks must confirm that the student meets the loan requirements and is currently enrolled in a college. These documents serve as proof of the student’s educational background and acceptance into the institution.
- To apply for an education from a bank, the student applicant should present their credentials, like their 12th grade report card or recent educational certificates, to showcase their achievements for evaluation purposes by the bank personnel.
- Upon acceptance to a college or university program, it is vital to showcase your admission letter for enrollment in a course, along with information regarding the program duration and expenses.
- The bank uses the admission letter to calculate the loan amount, considering the course fees and additional costs involved.
Proof of Financial Requirements
- In order to assist students throughout their loan journey, banks must comprehend the financial needs such as tuition fees, living costs, and other educational expenses of the students.
- When the acceptance letter mentions the expenses for education upfront, the bank can estimate the loan needed. Some schools break down fees, like tuition and living costs, in detail, which helps the bank determine the loan amount required.
- Many colleges and universities offer a breakdown of fees that covers tuition expenses along with costs for housing and exams in a document called the fee structure document which helps in estimating the loan amount needed.
Income Proof of the Co-Applicant (Parent/Guardian)
- In India, many banks request a co-applicant who is basically a guarantor, when applying for Education Loans to cover situations where the student may not be able to repay the loan on their own accord. The co-applicant is generally a parent or guardian who will assume responsibility for loan repayment if needed. To verify the financial capability of the co-applicant to repay the loan proof of income is necessary.
- The bank might ask for proof of income such as pay slips or bank statements from the parent or guardian to ensure they have a regular income to support loan repayments.
- The PAN card of the co-applicant is required for verification so make sure to have it handy before proceeding.
- Banks may also ask for a Form 16 (for employees with salaries) or Income Tax Returns of two years (for those who are self employed). These documents assist in evaluating the security of the co applicant.
Collateral Documents (if applicable)
- When applying for an Education Loan, banks may request collateral to secure the loan amount. Collateral could include assets such as property or FDs. The documentation needed to pledge collateral commonly includes-
- When using property as collateral for a loan, you are required to provide documents like title deeds and property valuation certificates to prove ownership securely.
- To use an FD as collateral, it is required to present a certificate issued by the bank for the FD amount.
- Some banks like ICICI Bank, allow you to use Home Loan policies as cross-callateral for a loan. So you need Home Loan documents for collateral, if applicable.
Conclusion
Getting an Education Loan in India entails planning and arranging of documents to ensure an efficient application process for students. Make sure to contact your selected bank to confirm the documentation needed since the requirements could differ slightly from one bank to another. To prevent delays and secure assistance for your educational aspirations, it’s important to have all the necessary paperwork prepared in advance for your Education Loan application.