Understanding education loans and related terms before applying is crucial because taking charge of your financing sets a strong foundation for academics and career. Ultimately, thorough research helps students make well-informed decisions. So, if you are planning to opt for a secured education loan, here’s everything you must know.
Key highlights:
- Secured Education Loan
- Collateral Security for an Education Loan
- Some Basic Eligibility for a Secured Education Loan
- Documents Required for Secured Student Loan
- Application Process for Secured Education Loan
- Things to Know About Student Profile
- Online Calculators That Simplify Your Student Loan Journey
Secured Education Loan
Secured student loans require an asset as collateral. The collateral security for an education loan acts as a guarantee against the education loan. On the other hand, unsecured student loans do not require any collateral or security assets.
Most lenders offer both types of student loans: secured and unsecured. You can choose between the two based on your financial requirements and preferences. Both types of student loans are available for studying abroad and in India.
Collateral Security for an Education Loan
The most widely accepted collateral includes residential property (apartment/house) or a fixed deposit.
Some Basic Eligibility for a Secured Education Loan
Before applying for a study loan, it is advised to research to understand the basic requirements of your chosen lender, as these might slightly vary depending on the financial institution.
- Students can apply if they:
- Are Indian citizens who are 18 or older
- Have a confirmed admission before the final disbursal
- Have a co-borrower who earns in India
- Co-borrowers also need to meet the following criteria:
- Must be an Indian citizen and should be a parent, legal guardian, sibling or other blood relative
- Must have a bank account in India that allows them to sign cheques
- Must be the primary debtor
Important Tip: Before applying for a collateral education loan, please check if your preferred lender has a tie-up with your chosen university for the shortlisted course to enable a seamless education loan process.
Documents Required for Secured Student Loan
- For students:
- 2 colour passport-sized photos
- Photo ID
- Residence proof
- Date of birth proof
- Signature verification
- Academic documents
- Proof of admission
- Fee structure
- For co-applicant:
- 2 colour passport-sized photos
- Photo ID
- Residence proof
- Date of birth proof
- Signature verification
- Income proof
- Collateral documents (for a secured student loan)
- 8-month bank statement
- Relationship proof
Application Process for Secured Education Loan
Gone are the days when you had to stand in long queues and get stuck with cumbersome paperwork, as most lenders are now available online. In fact, with Avanse Financial Services, you can apply in 4 easy steps:
- Fill out the application online or visit the nearest Avanse branch
- Speak to an Avanse representative
- Share the requisite documents
- A student loan will be sanctioned if you tick all the boxes
Things to Know About Student Profile
When you apply for a student loan, your lender will thoroughly evaluate your student profile to determine your employability potential. Therefore, parameters such as academic scores, entrance exam scores, the pedigree of your university, and continuity in your education, to name a few, will be analysed. Additionally, your co-applicant’s financial background will be examined too. If you meet the set parameters of your chosen financial institution, your student loan will be sanctioned.
Online Calculators That Simplify Your Student Loan Journey
- Education Loan EMI Calculator: An education loan EMI calculator helps you estimate your monthly EMIs. Instead of crunching complex formulas on your own, you just type in your loan amount, interest rate as shared by the lender and repayment tenure. This calculator will get an instant estimate of what you’ll be paying each month, helping you plan your financing journey with ease.
- College Expense Calculator: To borrow exactly what you need without borrowing too much or too little, you first need a clear picture of your actual college expenses. A college expense calculator helps you do just that by giving you an accurate estimate of your potential college expenses in just a few clicks.
- Eligibility Calculator: An eligibility calculator acts as your student loan eligibility checker. Based on your current finances, the calculator gives you a quick, realistic estimate of how much you can borrow.
So, with this information about the secured student loan, you can plan your academic and student loan journey. If you have any doubts about an education loan, education loan interest rate or academic journey, please connect with us. We will be glad to assist you.
Also Read: Unsecured Education Loan: How Eligibility and Approval Work
