Higher education may no longer be a prerequisite for securing a high-paying job, however, we know how helpful and useful it can be. While there was a time when most people would go for higher education immediately post-graduation, the mindset has changed. Many professionals are now choosing to study after a few years of working.
While this mindset has changed, you would still need good academic performance to secure admission in a good college and financial resources to fund your education there. Even if you have saved money, the costs of education are rising year-on-year and it is quite expensive to pursue higher education in a good institution.
The good thing about education is that the governments at the centre and the states have created an atmosphere where students aspiring to get a good education can do so by availing education loans to fund their education or even personal loan.
The terms of the education loan are quite liberal and the student can start repaying the loan once he completes the education and secures a job. Further, the government allows tax benefits to the student as well as the parents in their individual capacities in the form of tax deduction without limit for the interest paid on the education loan.
While availing an education loan, from a financial institution like Tata Capital, is rather simple as it comes under the personal loan segment, there are certain eligibility conditions that you must satisfy before you can apply. The eligibility question comes in two parts – the non-financial part and the financial part. Check out the following points to determine whether you are eligible or not.
Approved educational institutions
In general, you are eligible to apply for any course conducted by any college affiliated to a recognized university. Along with standard degree courses in any discipline, even vocational courses and part-time courses are also eligible. Further, if you are seeking admission in a college abroad you are eligible subject to the lender approving the college.
You need to have a good academic record and pass any admission tests to secure admission to the college of your choice. If your academic record is poor, you may not secure admission. You must have an admission letter from the college giving the relevant information and the breakup of expenses so that you can submit the same to the lender when you apply for the education loan.
Availability of collateral
For education loans up to Rs 4 lakh, there is no need for margin money or collateral security. However, in today’s world, the costs of education are quite high and you will need more than Rs 4 lakh to pursue the course of your choice.
Thus, you must ensure you have some form of collateral security such as a life insurance policy, fixed deposits, mutual funds and immovable property either in your name or your family member’s name while availing an education loan.
Availability of margin money
For education loans up to Rs 4 lakh, there is no need for margin money. But for education loans above this amount you need to bring in margin money of 5-15% of the loan amount required depending on the lender’s terms and conditions. Make sure you can bring in the required amount before you apply.
Credit history
It is advantageous to you if you can make your parents a co-applicant. However, remember that all the applicants need to have a decent credit score which ascertains your creditworthiness. If your credit scores are low then the lender can impose stricter terms and condition for the education loan.
Availability of eligible documents
You need to produce all the documents necessary to support your application such as KYC documents to prove your identity and address for all the applicants, collateral security documents, admission letter, academic record, income proof of all applicants, visa application if applying to a college abroad and net-worth statement of all applicants.
From the foregoing, it is clear that if you can produce all the necessary information as above along with documentary proof you are eligible to apply for an education loan. Remember that education loans are really a part of the personal loan product of the lender and as such, the application process is quick and easy.
