When it comes to financing your education, an education loan can be a great option to cover the expenses. However, before applying for an education loan, one crucial factor to consider is the minimum salary required to be eligible for an education loan.
In this article, we’ll discuss how much salary you need for an education loan and the loan eligibility criteria and requirements you should know before applying.
Eligibility criteria for Education loans
To be eligible for an education loan, there are certain criteria that you must fulfill.
Firstly, you must be a citizen of India, and secondly, you must have secured admission to a recognized course in India or abroad.
The student must be 16 years old or above to be eligible to apply for an education loan in India.
Additionally, you must provide proof of admission and also, have a co-borrower or a guarantor. The co-borrower or guarantor should have a good credit score and be willing to take the responsibility of paying back the loan if you fail to do so.
Lenders may differ in their eligibility requirements. Some lenders may also consider the academic record of the student, while others may look at the income of the parents or the co-borrower.
It’s essential to check the eligibility criteria of the lender you’re planning to apply for an education loan to ensure you meet all the requirements.
How much salary do you need for an Education loan?
The minimum salary required to be eligible for an education loan depends on the lender’s policy. Typically, the minimum salary required for an education loan is around Rs. 25,000 per month.
However, some lenders may have a higher or lower minimum salary requirement.
It’s important to note that the salary requirement is not the only factor that lenders consider when approving an education loan.
Lenders also consider the co-borrower or guarantor’s income and credit score, the course’s duration and cost, and the repayment capacity of the borrower before approving the loan.
Education loan requirements
To apply for an education loan, you’ll need to submit certain documents. The documents required may vary depending on the lender, but some common documents that most lenders ask for are:
- Identity proof: Aadhaar, PAN, a passport, or a driver’s license may be used as identification.
- Proof of address: Aadhaar card, passport, utility bills, or rental agreement.
- Proof of admission: Admission letter from the institute or university.
- Income proof: Salary slips, income tax returns, or bank statements.
- Academic records: Mark sheets of previous exams with a minimum of 50% in high school and graduation.
You may also need to provide additional documents if the lender requests them.
How to choose the best education loans?
How to apply for an Education Loan?
To apply for an education loan, you can either visit the lender’s branch or apply online through their website. Here are the steps to follow when applying for an education loan:
- Research: Research various lenders and compare their interest rates, loan amounts, repayment options, and other features.
- Check eligibility: Check if you meet the lender’s eligibility criteria before applying.
- Apply by completing the application form and submitting the necessary paperwork.
- Approval: Once the lender receives your application and documents, they will verify your eligibility and documents. They will authorize the loan if everything is in line.
- Disbursement: After approval, the lender will disburse the loan amount to the institute or university directly.
Repayment options for Education Loans
After completing your education, you’ll need to start repaying the education loan. Most lenders provide a variety of flexible repayment options, such as:
EMI: Equated Monthly Installments (EMI) is a fixed monthly payment that includes both the principal and interest. Your ability to repay the loan will determine the EMI amount you receive.
Moratorium period: Some lenders offer a moratorium period, during which you don’t have to pay the EMI. This period usually lasts for the course’s duration plus six months or one year after completion.
Prepayment: You can prepay the education loan if you have extra funds. However, certain lenders could charge a fee for early repayment.
Conclusion
An education loan can help students and their families finance their education expenses without having to worry about immediate financial burdens.
However, it is crucial to understand the eligibility criteria, loan requirements, and minimum salary requirements before applying for an education loan.
Applicants must also ensure that they have all the necessary documents in place to expedite the loan approval process. With proper research and preparation, an education loan can be a great investment in one’s future.
