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Eligibility criteria for an education loan

Who wouldn’t want a great job at a big company, while getting a nice paycheck along the way? All this may seem dreamy, but let us reassure you, it is very possible for you to make this a reality. Getting to that position obviously requires the individual to be skilled enough to make significant contributions to the company that he/she is hired at. But apart from the individual’s skills, a job also requires them to be academically proven.

Sure, the skill you possess will ultimately take you to the places you want to go, but a post-graduate degree along with that will certainly help you along the way. For students who worry about the finances to fund their education, an education loan is an ideal option to provide them with the financial power that will take care of their academic expenses.

Eligibility criteria for an education loan

The first step for getting a loan is making sure you clear the eligibility criteria of the lender. Here is a general list of the eligibility criteria that every applicant should keep in check:

The applicant should be an Indian citizen.
For getting an education loan, one needs to have completed 18 years of age.
Students looking to get a loan need to have a co-applicant.

These are basic criteria that one should be eligible for in order to apply for a loan. For students looking to be eligible for a bigger loan amount, here’s what they need to do:

Keep a good credit score

Maintaining a good credit score has a lot of benefits, one being that the applicant gets offered a better loan plan by the financial institution. Even co-applicants have to maintain their credit history since the financial institutions will be reviewing their scores too. Applicants with a good credit score can get a lower interest rate on the education loans they take. People with below-average credit scores are more likely to get an education loan from a Non-Banking Financial Company (NBFC) than a bank, though they may get one with a higher interest rate.

Provide collateral 

Most financial institutions do not require collateral if the loan amount is under a certain limit. This works for the applicants, as most of them generally look to take loans from lenders that do not require collateral.  But this can also be beneficial for the borrowers, as they can get bigger loan amounts at lower interest rates. The financial institutions agree to give you these benefits since you are providing them with collateral as security.

Each financial institution will have its own terms and conditions. However, you do not need to fret over this, as you can always make use of an eligibility calculator. The eligibility calculator would require details of your monthly income, monthly obligations, interest rate of the loan, and the loan tenure, and based on this information you will get the loan amount you are eligible for.

Hope this article has helped you, all the best!

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