Which is best time to apply for an education loan?

Which is the best time to apply for an education loan?

What are the advantages of an Early Application? 

When there is fund assurance the chances for getting admission to your dream university increases.

  • Allows you to know your loan eligibility in advance.
  • The most preferred way to declare ‘Assured Funds to Universities’
  • Loan Sanction letter has better acceptance over the solvency letter.
  • Assures no last minute issues especially during Visa/ fee payment time.

Why should I get a loan sanctioned before admission?

It’s a preferred way to declare ‘Assured Funds to Universities’

  • Better acceptance of the sanction letter over the solvency letter.
  • Increase your chances of getting admission to your dream college.
  • No last minute surprises, especially during Visa time.
  • Know your loan eligibility in advance.
  • Quick and hassle free process to get a sanction letter.

Who is eligible to apply for an education loan and why should one apply?

Usually, middle-income group people opt for education loans, because of: 

  • Rapidly rising costs of education.
  • Income tax benefit under section 80E of IT act.
  • Students want to take their own financial responsibilities to preserve their parents savings and build positive credit history.
  • Even affluent families are going for education loans because they don’t want to block the huge amount that can be reinvested somewhere else.

Which bank should I choose for funding my education?

best time to apply for an education loan?

In general, all banks offer a competitive rate of interest on education loans. So the most important question after answering- When do I need to apply for student loans?, is how do you select the right bank for yourself? Well every bank has its own pros and cons. 

  • Most of the banks need something as collateral for education loans. This can be a burden on you if you are unable to provide a collateral and are just one step away from your dream university.

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  • Also, banks demand a huge percentage of margin money from students, which generally revolves around 10% to 25% of the total loan amount. For many families it can be troublesome considering the high cost of education.

  • Next follows the speed at which the banks process your education loan. Sometimes there can be a delay in the process for successful sanctioning of your loan which in return can waste your valuable time. We recommend you to go for services offered from private lenders and NBFCs as their process is faster and they give quick decisions. Therefore, there is no harm in exploring options. best time to apply for an education loan?

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 What is the eligibility criteria for an education loan?

Lending organisations decide loan eligibility on the basis of: 

  • The past academic strength of the student.
  • Future employment prospects.
  • University and course that you have applied to.
  • Co-borrower’s financial standing is also considered in the evaluation process.

What are the documents needed for an education loan application?

 KYC documents

  • Academic documents
  • Acceptance letter 
  • Financial documents of your co-applicant (generally parents)

However, following a detailed evaluation of your case by any financial organisation might need a few more documents.

 Do I need to produce a co-borrower / guarantor for an education loan?

 Generally students do not have a source of income, so they take the support of a co-borrower or guarantor for their loan application. A co-borrower/ guarantor mitigates the risk for the loan provider giving you the loan. Best time to apply for an education loan?

 Who can be a co-borrower/ guarantor?

Your parents/ siblings/ close relatives can be your co-borrower during your loan application.

Note: Many universities do not grant much time for tuition fee payment post rolling out the admits, which often leaves very little time for loan application and processing. However, with Education Loan providers like InCred, HDFC – Credila and Avanse they allow you to process and sanction the loan even before you receive an admit. 

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