An education loan is a sum of money borrowed to finance post-secondary education or higher education-related expenses. Education loans are intended to cover the cost of tuition, books and supplies, and living expenses while the borrower is in the process of pursuing a degree. Payments are often deferred while students are in college and, depending on the lender, for an additional six-month period after earning a degree. This deferment period is also referred to as a "grace period."
Education loans are issued for the purpose of attending an accredited college or a university to pursue an academic degree. Education loans can be obtained from the government or through private-sector lending sources.
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To qualify for a Education Loan, you have to meet certain criteria. Below are the important factors that lenders take into consideration to decide your eligibility for a Education Loan.
Most lenders have a minimum and maximum age requirement for loan applicants. Typically, you need to be of legal age (18 or older) to apply for a loan.
Education loans are often tied to specific educational programs or courses. Lenders may have a list of eligible institutions and programs that qualify for loans.
Many lenders require proof of admission to an eligible educational institution before approving a loan application.
Some lenders might consider your academic performance as part of the eligibility criteria. This could include factors like your high school or previous education grades.
If you have limited credit history or income, some lenders might require a co-borrower or guarantor (usually a parent or guardian) who will share the responsibility of repaying the loan if you are unable to do so.
Student's as well as their co-borrower/guarantor's credit history and credit score can play a significant role in determining your eligibility for an education loan. A good credit history can improve your chances of approval and may lead to more favorable loan terms.
Some lenders may consider your ability to repay the loan based on your income or your co-borrower's income.
The loan amount you're requesting in relation to the cost of the program might affect your eligibility. Lenders may have specific limits on the loan amount they are willing to offer.
In some cases, lenders might require collateral or security against the loan, especially for larger loan amounts. This could be in the form of property, investments, or other valuable assets.
You will likely need to provide various documents as part of your loan application, such as proof of identity, proof of admission, income documents, and more.
Below is some of the basic documents which are required at the time of Education Loan
If you have a question that deals with clients, customers or the public in general, then have a look at some of the basic FAQs.
An education loan is a financial product designed to assist students and their families in covering the costs associated with higher education, including tuition fees, books, living expenses, and more.
Eligibility criteria vary by lender and country, but typically include factors like admission to an eligible program, citizenship or residency status, academic performance, and more.
A moratorium period is a grace period during which borrowers are not required to make loan repayments, usually after graduation or starting a job. However, interest might accrue during this time.
Repayment usually starts after the moratorium period ends, based on the terms of the loan agreement.
Contact your loan servicer to set up repayment details, including auto-deductions from your bank account.
Depending on your credit history and income, a co-borrower or guarantor might be required to secure the loan.