How to get a student loan from Bank in India? : The step by step process of getting an education loan for higher studies from Bank in India is explained here. Childhood is the best memory and we still remember some of them. When we were kids, it was the responsibility of our parents to teach us in the school selected by them. But after high school, it is our responsibility to study well and take admission in the good colleges. So that’s life. The good or bad may come and go but that’s life and had to happen. Every student has his/her dreams and goals which they want to achieve.
Nowadays, every high school student has started thinking about the career. But that fully depends on our country. Whether it is to provide facilities to the students to help them in achieving their dreams. Many of the high school students wants to go abroad and study for higher studies. But there are some basic requirements which are necessary to be keep in mind. You need to crack the entrance exam of the university/college. Take education loan from the bank and more. So here are some of the steps to get loan for higher education.
How to get a student loan for higher studies from Bank in India?
To understand “How to get a student loan from Bank in India?” read the steps mentioned below:
1. Choose course
When you’re done with your high school, the next you decide for your further studies. You should be confident about your decision. You should know your interest and skills. Develop your interest that particular field. Build your confidence and be self motivated if you want to go abroad or even if you are planning for higher studies in India.
Be independent and don’t be confused related to this matter. Your further life will be based on this. Your education makes your future. So choose a specified course, crack your entrance exams efficiently. And achieve your ticket to a fruitful future ahead.
2. Loan application form
The first step when you’ll go for taking loan from the bank, you need to fill the application form. The application form requires basic information about you like loan amount, monthly income, purpose of taking loan, which course applying for, name, residence, mobile, etc. To go further, you need to apply for the form.
The loan amount for studying abroad will be more expensive as compared to studying in India. There are different criteria of studying in different countries. It also needs your score of the entrance exam while going further, exams like GMAT, IELTS, GRE etc whichever is applicable.
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The eligibility criteria differ on different banks. It is important to understand the eligibility criteria for students. But there are some common criteria for every bank. It includes:
- The student must be an Indian citizen.
- The student shall have passed the entrance test or shall have secured some scholarship for the admission in India or abroad.
- The loan applicant must have crossed the age of 18.
- The candidate must be from a good academic background.
- The applicant should have got admission in the institution or college in India or abroad.
4. Decide loan amount to be taken
Decide the loan amount to be taken. Prefer public banks over private bank sector. Public banks provide lower rate of interest as compared to private banks. The payment is divided into two parts, interest and the principal amount. The loan amount depends upon your salary or the income you earn. The education loan varies from bank to bank.
But in common, for studies within India, the amount lies between Rs 7 lakhs to Rs 10 lakhs and in Abroad, the amount is between Rs 15 lakhs to Rs 20 lakhs. Interest rates too varies, usually banks provide 11.25 percent to 13.5 percent of rates. Like “Bank of Baroda” charges 12.5 percent of loan amount up to Rs 4 lakh. Interest rate depends on your loan amount.
5. Documents required
Education loan requires documents which are necessary to be submitted to the bank. These documents include:
- Marksheet of last qualifying exam.
- Proof of income.
- Proof of admission.
- Income tax assessment of last 2 years.
- Bank account statement of borrower.
- Generic administration documents which include: application form, guarantee form, subsidy application form.
6. Personal discussion
When the documents are ready and the application form is completely filled up. The bank goes for a personal discussion, the student must be clear about his or her future life and the course so opted for. He/she may be asked question related to the institute/school, course so selected and the academic performance.
The student must be confident and should answer all the questions related to the academic life. only few banks give attention to the personal discussion and some don’t even make a step in taking the PD.
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7. Enlist all the banks in the city
If you want to get education loan, you need to enlist the banks in your city. Choose a bank which provides a lower rate of interest. Don’t limit yourself in checking the financial institution from where you’ll take your loan. You need to check the loan and the amount they offer to you.
8. Borrower’s signature on the promissory note
It is important to have signature of borrower on the promissory note. A borrower is not the parents or guardians but the student itself. So the student has to sign the promissory note. A promissory note is a written and a dated document which the borrower promises to pay the definite amount to the payee on the specified date so selected. Promissory note are of two types, secured and unsecured. In education loan, secured promissory notes are required.
The borrower need to pay the collateral that is property, services, goods, etc in case he or she fails to pay the definite amount on the date assigned.
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9. Loan approval
When the banker finds all the necessary documents valid and the eligibility criteria fine with the client, the bank will go for loan approval within a short period. And you’ll be granted the loan for the desired time period. You need to pay the EMI’s monthly or annually as signed by you. When the bank gives educational loans, the guarantor is mandatory.
A guarantor could be the parent/ guardian of the applicant. The bank will check thoroughly the background of the guarantor and the credit history before permitting the loan.
10. Loan disbursement
The loan amount is payed to the client by the bank after a certain period of time. The disbursal of loan is based on some formalities that you have to fulfill once the loan gets permitted. Avoid the extra payment of interest on the amount disbursed. The bank may disburse the college fee to the desired college.
I hope now you have got understood “How to get a student loan from Bank in India?”. Kindly don’t forget to share this post with your friends and family members.