Education institutions play a significant role in student’s life by imparting the necessary skills and knowledge to make them career-ready. To provide an excellent learning experience, these institutes must be equipped with new-age educational infrastructure. To enable a conducive learning environment, academic institutes opt for an education institution loan (EIL). So, here is everything you need to know about loans for schools and colleges.
· What does a loan for educational institutions cover?
o Technological infrastructure
o Other needs
· Can you opt for loans for new educational institutions?
· Student loans for vocational schools
· How to get an education institution loan?
What does a loan for educational institutions cover?
Teaching institutes such as colleges and universities offer infrastructure and amenities such as innovative classrooms, libraries, equipment, learning devices and learning pods, among others, to enhance the student experience. Education institutions opt for EIL to provide these facilities. Financial institutions offer EIL to build or renovate the premises too.
Institutions and teachers have embraced digital tools to address the short attention span of students. Whiteboards, smart classrooms, projectors, audio-visual teaching, interactive and participative modules of learning, and AI and ML-based e-learning tools have become an integral part of the learning environment. You can opt for an education institution loan to accommodate this digital transformation.
You can opt for an institutional student loan to purchase a new property or land or to meet working capital needs. Outdoor sports are imperative for the overall development of students. Hence, many schools and colleges build playgrounds and indoor game spaces too. If purchasing land to meet the learning needs of your student community has been on your mind for some time, this is the right time to opt for EIL.
Can you opt for loans for new educational institutions?
All the education institutes, such as K-12 establishments, higher education colleges, well-known training and coaching institutions, and companies that provide technology and material supplies to educational institutions, can opt for EIL.
Student loans for vocational schools
Most financial institutions will offer loans for vocational schools. However, before applying for an EIL, please research to check with your preferred education institution loan partner if it will provide you with an EIL.
How to get an education institution loan?
· Research: Conduct thorough research to find out the right financial partner based on the financier’s domain expertise in managing education loans, customer service, customer ratings, interest rates, features and benefits extended to you.
· Select the right tenure: Although the repayment tenure will completely depend on the education institution’s financial capacity, it is advised to talk to the lender as they will guide you to choose the best term. The longer the tenor, the lower will be the interest rates.
· Arrange the documents: You will need to provide general documents as well as financial documents.
Here is the list of documents that you will need when you apply for EIL
o General documents
ü The application form, along with a photograph and a signature across the photograph
ü KYC documents – ID proof and address proof
ü Your organisation’s trust deed, MOA, AOA, bye-laws, or partnership deed
ü Registration/Incorporation Certificate
ü Approval from the AICTE, DTE, ICSE, CBSE or any other relevant authority
ü Collateral security-related documents
o Financial documents:
ü Financial report of the previous 3 years, along with the audit report
ü Income Tax Returns of the previous 3 years
ü Bank statement of the previous 12 months from the main operating account
ü All loan sanction letters and statements since the organisation’s inception
· Application process:
o Step 1: You need to submit the login documents and initial processing fee.
o Step 2: The lender will assess your eligibility and will inform you accordingly. If you are eligible for the loan, you need to provide the rest of the documents.
o Step 3: The lender will complete the technical, legal and financial due diligence.
o Step 4: If you meet the financer’s preset criteria, the lender will finalise the sanction terms, post which you need to clear the balance processing fee. The lender will then issue the final sanction letter.
o Step 5: You need to execute the necessary resolutions, and finally, the loan will be disbursed by the lender.
Can you opt for EIL without assets?
You can choose between two types of education institution loans: unsecured and secured loans. You don’t have to offer any asset as collateral for an unsecured loan. But for a secured loan, you have to offer collateral as a security against your EIL. You can communicate your requirements before applying for an education institution loan to your financial partner.
So, this is everything you need to know about education institution loans. You can opt for an education loan for private institute that provides education to students. We at Avanse Financial Services offer education institution loans to democratise education and education financing space. If you need any assistance, please feel to connect us.
We always aim to offer you competitive interest rates on your Avanse Education loan.
The rate of interest on your loan is calculated as: Interest Rate = Avanse Base Rate + Spread.
Our current Base Rate is 14.25% (WEF 01.05.2023).
The Spread is floating and is based on analysis of overall credit and course profiling.
This rate is subject to the terms and conditions of Avanse Financial Services Ltd.