p>School education plays a vital role in child development as it shapes a student’s personality and provides a holistic learning process. Schools provide an enriching environment to every student where they acquire knowledge and skills to grow as a responsible individual. Hence, parents are always inclined to send their children to the best schools. To be the top choice of parents, schools need to offer quality education along with proper infrastructure and facilities to provide holistic academic development.
Therefore, school owners should provide all the essential amenities to enable a great learning experience. Education institution loan is the best solution to help schools establish a robust atmosphere for a student’s overall progress in life.

Now, before a school owner applies for a loan, they need to know a few things to reap the benefits of such a facility.
Education loan for private institute:
Secured Loan
This refers to the loan scheme offered by financial institutions with tangible security backing the loan amount. Opting for collateralised credit tends to be cost-effective as companies can extend interesting benefits because collateral reduces credit risks. If you provide collateral, you can also opt for a larger loan amount.
Unsecured loan
If you do not prefer to offer any collateral, you need not worry. Financial institutions also offer unsecured education institution loans. The loan amount will differ depending on the financial institution and their preset criteria.

  • Important note: You can take loans for new educational institutions too.

Judiciously choose the loan tenure
Secured loans can be availed for a longer duration. But it is always advisable to plan your repayment time period. You should remember that interest is higher when you opt for a longer timeframe. You need to check the tenure and discuss it with the lender. Customer-centric organisations will always communicate with you transparently so that you can make informed decisions.
List of documents required
General documents:

  • The application form along with a photograph and a signature across the photograph
  • KYC documents – ID proof and address proof
  • Your organisation’s trust deed, MOA, AOA, bye-laws, or partnership deed
  • Registration/Incorporation Certificate
  • Approval from the AICTE, DTE, ICSE, CBSE or any other relevant authority
  • Collateral security-related documents

Financial Documents:

  • Financial report of the previous 3 years along with the audit report
  • Income Tax Returns of the previous 3 years
  • Bank statement of the previous 12 months from the main operating account
  • All loan sanction letters and statements since the organisation’s inception

Procedure followed by financial institutions to process an education institution loan

  • Step 1: You need to submit the login documents and initial processing fee.
  • Step 2: The lender will assess your eligibility and will inform you accordingly. If you are eligible for the loan, you then need to provide the rest of the documents.
  • Step 3: The lender then completes the technical, legal and financial due diligence.
  • Step 4: The lender will finalise the sanction terms post which you need to clear the balance processing fee. The lender then will issue the final sanction letter.
  • Step 5: You need to execute the necessary resolutions and finally, the loan will be disbursed by the lender.

Repayment options
You should check for all the necessary details related to your loan, including the repayment options available. For most financial institutions, Equated Monthly Instalment (EMI) is usually the only way to pay off your loan. Nonetheless, getting all information for better knowledge and understanding is always advisable.
Hope this article clarifies some of your doubts regarding an education infrastructure loan. Avanse Financial Services provides customised education institution loan options for renovations and campus development as the organisation is focused on building quality education infrastructure in India. Please reach out to us for any query or assistance.

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