What is the eligibility criteria for education loan?
Education loans, also referred to as student loans, are financial advances offered to students by banks or financial institutions to assist with the expenses of higher education. This specialised loan program provides financial support to high-achieving students for studying at universities both in India and abroad.
To avail the benefits of our loan against property, which include attractive interest rates, flexible repayment tenor, nominal associated charges, and balance transfer facility, you must meet certain eligibility terms. The eligibility criteria for salaried and self-employed individuals are slightly different from each other.
Importance of student education loan
Check your education loan eligibility criteria
In order to avail of a loan against your property to fund your education, you need to check the eligibility criteria.
For self-employed borrowers below is the basic criteria
- You must be between 25 years (18 years for non-financial property owners) to 85 years* (including non-financial property owners)
* 85 years* of age or less at the time of loan maturity - Regular income
- Resident of India, owning property in any of these cities: Ahmedabad, Chennai, Mumbai, Udaipur, Delhi and NCR, Pune, Surat, Bangalore, Cochin, Hyderabad, Nagpur, Vijayawada, Madurai, Lucknow, Jaipur, and Indore
For salaried borrowers below is the basic criteria
- You must be between 25 years (18 years for non-financial property owners) to 85 years* (including non-financial property owners)
* 85 years* of age or less at the time of loan maturity - Employment at a multinational, private or public organisation
- Resident of India, owning property in any of these cities: Delhi and NCR, Mumbai and MMR, Chennai, Hyderabad, Bangalore, Pune, and Ahmedabad
With a minimum CIBIL score of 700 and a healthy credit profile, you can easily qualify for the Bajaj Finserv Education Loan on Property.
Get all the education loan scheme details and avail the best interest rate and other benefits on customised loans for students from Bajaj Finserv.
What are the factors affecting your loan eligibility
Several factors can influence the approval and terms of a loan against property for education purposes. Lenders consider these factors to assess the borrower's creditworthiness and determine the terms of the loan. Here are some key factors:
1. Credit score:
A higher credit score enhances the chances of loan approval. Lenders use credit scores to evaluate the borrower's creditworthiness and risk level.
2. Income and employment stability:
Lenders typically prefer borrowers with a stable income and employment history. A steady source of income assures the lender of the borrower's repayment capacity.
3. Loan amount and property value:
The loan amount is often a percentage of the property's current market value. The value of the property offered as collateral influences the approved loan amount.
4. Loan-to-Value (LTV) ratio:
The LTV ratio is the percentage of the property's value that the lender is willing to finance. A lower LTV ratio may result in a more favorable loan offer.
5. Debt-to-income ratio:
Lenders assess the borrower's debt-to-income ratio, which is the ratio of monthly debt payments to monthly income. A lower ratio indicates better financial health.
6. Purpose of the loan:
Clearly stating that the loan is for educational purposes can impact the lender's decision. Some lenders may have specific loan products designed for education financing.
7. Documentation and eligibility criteria:
Meeting the documentation requirements and eligibility criteria set by the lender is crucial. This may include proof of income, property documents, educational details, etc.
8. Interest rates:
The interest rates offered by the lender can vary based on market conditions, the borrower's credit profile, and the loan tenure. A higher credit score may result in lower interest rates.
9. Loan tenure:
The repayment period chosen by the borrower can affect the loan terms. Longer tenures may lead to lower monthly instalments but could result in higher overall interest payments.
10. Market conditions:
Economic conditions, interest rate trends, and the overall lending market can influence the terms of the loan.
11. Co-applicant or guarantor:
Having a co-applicant or guarantor with a strong financial profile can strengthen the loan application.
Before applying for a loan against property for education, it's advisable to compare offers from different lenders, understand the terms and conditions, and ensure that the loan aligns with your financial goals and capabilities.
Documents required for loan against property
Here is the list of documents required while applying for loan against property:
- Proof of identity/ residence - Aadhaar/ passport/ voter’s ID/ driving license/ letter from NPR/ NREGA job card
- Proof of income
- Property-related documents
- Proof of business (for self-employed applicants), and
- Account statements for the last 6 months
Frequently asked questions
Employment verification in an education loan in India involves confirming the borrower's employment status, income, and stability. Lenders assess the borrower's ability to repay the loan by verifying their employment details, ensuring they have a steady income source to meet repayment obligations. This verification is a standard part of the loan application process to evaluate the borrower's creditworthiness.
The margin requirement for education loans in India is typically set at 5% to 15%. This means that the lender finances 85% to 95% of the total educational expenses, and the remaining percentage is expected to be covered by the borrower or their family as a margin or down payment.
The minimum age limit to avail a student loan in India is generally 18 years. Most lenders require applicants to be at least 18 years old to be eligible for a student loan.
Yes, most lenders levy a processing fee on education loans. The exact amount may vary depending on the lender’s terms and conditions.
Typically, parents, guardians, or a spouse can be co-applicants when applying for an education loan. In some cases, siblings or other close relatives may also be allowed as co-applicants.
Education loan courses are generally classified into domestic and international courses. They may further be categorized into undergraduate, postgraduate, diploma, or certification programs, depending on the lender's policies.
