What are the Documents Required for an Education Loan?

Every national and international bank provides students with low-interest education loans to assist them in paying for their higher education fees. It is a type of financial assistance offered to students to study in institutes in India and overseas. Banks provide eligible candidates with educational loans, adjustable terms and conditions. Furthermore, the paperwork process is maintained, and one of the major processes involved in obtaining an education loan is the submission of documents. Let us read more about the documents needed for education loan.

Also Read: Personal Loans for Students in India

List of Documents Required for Education Loan

The following documents are requested by banks when a student applies for an education loan:

Identification Documents 

• KYC (Know Your Customer) documentation
• Address Proof of Citizenship Regional Domicile

Academic Papers 

• Latest admission documents 
• Certificates, scorecards, and diplomas from previous qualifications 
• Fundamental qualifying records

Financial Records 

• Income Tax Returns 
• Account statements

Documents of General Administration 

• Forms of guarantee 
• Completed application form
• Forms for Subsidy Applications

Documents of Education Loan for Salaried Individuals

If you are a parent and want to apply for an education loan for your child, then you need to apply as a co-applicant. Let’s have a look at the documents of education loan for salaried individuals-

Co-applicant/Guarantor:

• Identity Proof (Anyone)
• Proof of Address/Residence (Any)
• 2 passport-sized photos
• A/C statement for the preceding year if there was a previous loan from another bank/lender

Proof of Salary for Salaried Co-applicant/Guarantor:

• Copy of Form 16 and IT Returns recognized by IT Dept. Bank account statement for the previous 6 months (of Salary Account)

Documents of Education Loan for Non-Salaried Individuals

Let’s have a look at the documents of education loan for non-salaried individuals-

• TDS Certificate (Form 16A, if applicable), IT Returns recognized by IT Department
• Bank account statement over the previous six months
• Proof of identity
• Proof of address
• Passport-size photographs
• Bank account statements

Documents Required for First Disbursement

Facility Agreement

• All candidates will be asked to fill out and sign forms with franking (state-specific) and MOE/MODT/MOD state-specific as appropriate.

Disbursement Request Form

• All applicants signed the Disbursement Request Form (DRF)

Also Read: What is the maximum and minimum tenure for a personal loan?

Repayment Mode

• E-NACH or Auto Debit mandate (Security E-NACH mandate if applicable)
• Three SPDCs are necessary for loans over one crore (one-third of the loan due amount).
• The first Pre-EMI cheque will be sent with favourable details.

Administration Charge

• Whichever is less, ₹ 5000/- or 0.25% of the loan amount, plus applicable taxes (The administrative charges are one-time non-refundable charges collected by the lender to appraise the valuation and legal verification of property to determine the suitability of accepting the property for mortgage, and they are independent of the outcome/result of such appraisal. Please keep in mind that administrative fees are due at the time the Facility is disbursed.)

Stamp Duty

• A stamp duty is levied state-wise

Notice of Intimation (NOI)

• For properties in Maharashtra, a Notice of Intimation (NOI) will be required. NOI must be completed within 30 days of the first payout date.

Sanction letter

• Accepted Sanction Letter, all applicants signed.
• Pending papers, if any, under the approved criteria.

Also Read: What are the Various Types of Personal Loans?

Property Documents

• Sale Deed and any extra agreements, if any.
• Current Agreement with Registration Receipt and, if appropriate, Index 2.
• Total number of connected papers.
• Plan approval and authorization from the necessary authorities.
• If appropriate, a copy of the most recent Encumbrance Certificate (EC).
• If appropriate, a copy of the most recent Property Tax Receipt.

Documents Required for Subsequent Disbursement

Now that you know about the documents required for first disbursement, let’s see the documents required for subsequent disbursement-

• Sale Deed and any extra agreements, if any.
• Current Agreement with Registration Receipt and, if appropriate, Index 2.
• Total number of connected papers.
• Plan approval and authorization from the necessary authorities.
• If appropriate, a copy of the most recent Encumbrance Certificate (EC).
• If appropriate, a copy of the most recent Property Tax Receipt.

Also Read: Personal Loans for Self-Employed in India

The interest rates on student loans are frequently lower than those on private loans. Fixed interest rates keep loan conditions from altering over time. Many student loans do not need payments until after graduation, and they may be eligible for deferral or loan forgiveness. Choosing an education loan relieves the burden on your family’s finances and prevents the need to liquidate your fixed deposit, mutual fund, or bond assets. Furthermore, the interest on an education loan is tax deductible under Section 80 E of the Income Tax Act of 1961.

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