A Comprehensive Guide: Student Loan Application in Private Bank

Private banks in India offer students both secured and unsecured loans to study abroad. The amount that can be sanctioned depends on various factors such as country, course, applicant’s profile, co-applicants financial profile, etc. Private-sector banks offer higher interest rates than government banks but better interest rates than NBFCs and international lenders.

Private banks generally require borrowers to meet specific eligibility criteria, which may include a good credit score, proof of enrollment in an accredited educational institution, and sometimes a co-signer with a strong credit history.

Features of Education Loans from Private Banks 

Application Process of Education Loans Via Vidya Lakshmi Portal

The Vidya Lakshmi portal is designed to help students in India find information about various education loan schemes provided by banks and financial institutions. To apply for an education loan follow the below-mentioned steps.

Step 1: Start by completing the Common Education Loan Application Form (CELAF) which is a crucial first step. Go to the dashboard and click on the 'Loan Application Form' tab.

Step 2: On the dashboard, click the orange 'Search and Apply for Loan Scheme' tab. This tab helps you to explore and apply for various education loan schemes.

Step 3: Use the available filters to narrow down your search results based on specific criteria such as whether it's for domestic or international study, the course level, and the desired loan amount.

Step 4: After you have applied the filter, a list of suitable loan schemes will be shown. Each scheme will have an option for you to apply.

Step 5: Click on a particular scheme that best suits your requirements. You will be redirected to a page offering detailed information about that specific scheme. Take your time to review the details to ensure it meets your needs.

Point to remember - You can apply for a loan from a maximum of three banks, and only one scheme per bank can be selected for the application.

Application Process of Education Loans Via Gyandhan

To apply for an abroad education loan through GyanDhan, follow these five simple steps:

Step 1: Check your loan eligibility.

Step 2: GyanDhan's expert education loan counselor will assess your profile.

Step 3: Your dedicated loan counselor will provide you with a customized document checklist. Borrowers will further upload the documents on GyanDhan’s website.

Step 4: Once the documents are uploaded, the GyanDhan team will take it further from there.

Step 5: The bank will disburse the loan amount according to the agreed-upon schedule.

Detailed Eligibility Criteria

When a student is willing to pursue higher education and worried about how to finance their education abroad, there comes to the rescue education loan. Different banks have different eligibility criteria based on academic performance, co-applicant requirements, family income, collateral requirements, and course of study. Below is a detailed breakdown of the eligibility criteria for the Private Banks.

Academic Performance - Your academic performance is often considered the deciding factor for approving your education loan.

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  You must have secured a minimum of 60% of marks in your previous qualifying exams and secured a spot in a reputable university, especially in STEM courses or professional degrees. Such profiles increase the chances of loan approval.
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  Moreover, if you have cracked exams like the GRE, GMAT, etc, highlight these achievements in your loan application as many banks value them.

Family Income - Family income also plays a crucial role in determining the loan amount you can secure.

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  Private Banks require that your co-applicant must have a stable income as they are equally responsible for the repayment of the loan amount. 
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  Different banks have set different limits. Say for instance Axis Bank and ICICI Bank accept co-applicants with a minimum income of 50 thousand per month without any obligations.
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  Your co-applicant must have a good credit score.

Collateral Requirements - The requirement of the collateral depends on the loan amount. For loans up to INR 7.5 lakhs, many banks offer unsecured loans.

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  If you are willing to secure a loan amount that exceeds 7.5 lakhs, then banks often ask for security. You would have to pledge collateral that can be property deeds or fixed deposits.

Course Type - The choice of your course can influence your loan approval. Banks generally tend to favor students who are pursuing STEM courses, or professional courses. These programs have high chances of employability, hence lower risk of getting default.

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  Moreover, students who are seeking loans for postgraduate studies, have higher chances of loan approval due to shorter course duration and closer to entering the workforce. 

Application Process of Education Loan In ICICI Bank

ICICI Bank is one of India's leading private sector banks that offers various financial products and services, including education loans. Education loans can be a great way to fund your higher education expenses, whether in India or abroad. ICICI Bank provides both online and offline modes for applying for an education loan. 

Online mode of application:

Applying for an education loan online is the most convenient and efficient way to get started. Below is a step-by-step guide on how to apply online:

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  Visit the ICICI Bank website.
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  Search for the 'Education Loan' or 'Loans' section on the website's homepage or in the menu.
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  Once you're in the education loan section, you'll find an 'Apply Now' or 'Apply Online' button. Click on it to initiate the application process.
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  Fill out the application form. Make sure you provide accurate information.
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  Scan and upload the necessary documents, such as your identity proof, address proof, academic records, admission letter, and more, as per the bank's requirements.
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  Carefully review the details you've provided, and if everything looks correct, submit the application.

Offline mode of application:

You can also apply for an education loan offline by visiting your nearest ICICI Bank branch. Visit the nearest ICICI Bank branch using the bank's website or directory. Once at the branch collect the application form. Fill out the form, attach the required documents, and submit your application at the branch.

Application Process of Education Loan In Axis Bank

Axis Bank is one of the prominent financial institutions in India that offers education loans to help students pursue their higher education goals both in India and abroad. Education loans cover a range of expenses such as tuition fees, living expenses, books, and other related expenses. 

Online mode of application:

This is the most convenient and widely used mode for applying for an education loan. You can apply for an Axis Bank education loan online through the bank's official website.

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  Go to the official Axis Bank website. 
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  Look for the 'Products' section and click on 'Education Loan' to access the loan details and application form. 
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  Fill in the application form
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  Scan and upload the necessary documents 
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  Review and submit the application.

Offline mode of application:

While online applications are more convenient, you can also visit your nearest Axis Bank branch for an offline application. Visit the Bank and obtain the application form. Along with the application form, submit all the required documents such as identity proof, address proof, academic records, admission letter, and income proof. Once your application form is completed and you have attached the required documents, hand over the completed application to the bank representative.

Application Process of Education Loan In IDFC First Bank

IDFC First Bank is a well-known financial institution in India, known for its wide range of banking and financial services, including education loans. They offer competitive interest rates and flexible repayment options to make education financing more accessible to students and their parents. Borrowers can apply for an education loan from IDFC First Bank through both online and offline modes.

Online application procedure:

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  Visit the official website of IDFC First Bank.
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  Search for the 'Education Loans' section on the website. It might be under the 'Loans' or 'Products' tab.
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  Fill out the online application form. You'll need to provide personal details, educational institution details, course information, loan amount required, and other relevant information.
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  Upload scanned copies of the required documents, such as academic records, income proof, identity proof, and address proof.
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  Double-check all the information you have entered and the documents you have uploaded. Once you have reviewed the application form, submit the application.

Offline application procedure:

Visit the nearest IDFC First Bank branch in your area. Request an education loan application form from the bank representative. Complete the application form with accurate information. Attach the necessary documents as specified by the bank, including income proof, academic records, identity proof, and address proof. Hand over the completed application form and documents to the bank representative.

Documents Required for an Education Loan from Private Banks

To apply for an education loan at a private bank, you are required to submit or upload the following documents.

Applicants' documents:

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  Undergraduate result (semester-wise)

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    12th standard mark sheet
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    10th standard mark sheet
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    Past academic record.
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  Passport 
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  Address proof: Recent copy of telephone bill/ electricity bill/water bill/ piped gas bill/ driving license/ Aadhaar card.
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  Education loan application form.
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  Identity proof: PAN/ Passport/ Driver’s License/ Voter ID card or government-issued identification document.
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  Entrance exam results (e.g. GMAT, GRE, TOEFL, etc.)
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  Proof of admission: Admission letter (A conditional admission letter is also applicable).
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  Statement of expenses.
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  2 passport-size photographs.
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  Loan A/C statement of one year (if applicable)
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  Bank account statement of the student (if applicable)

Co-applicant’s documents:

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  Identity proof: PAN/ Passport/ Driver’s license/ Voter ID card or government-issued identification document.
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  Address Proof: Recent copy of telephone bill/ electricity bill/water bill/ piped gas bill or copy of passport/ driving license/ Aadhaar card.
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  2 passport-size photographs.
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  If any previous loan is from other banks/ lenders, then the loan A/C statement of 1 year.
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  Legal documents of the collateral/ property documents.
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  Bank account statement of the co-borrower/guarantor, for the last 6 months (in case of takeover of education loan).

Income proof for salaried co-applicant/guarantor:

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  Salary slips for the last 3 months.
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  Copy of form 16 of the last 2 years or copy.
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  Bank account statement for the last 6 months (Salary account).
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  Brief statement of assets & liabilities of parent/ guardian/ other co-borrower.

Income proof for self-employed co-applicant/ guarantor:

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  Business address proof.
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  Last 2 years IT returns ( If IT Payee).
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  TDS certificate (Form 16A, if applicable).
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  Certificate of qualification (for C.A./ doctor and other professionals).
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  Brief statement of assets & liabilities of parent/ guardian/ other co-borrower
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  Bank account statement for the last 6 months.

Updated Interest Rates & Loan Amounts

Some Banks provide special offers for women candidates like an extra 0.5% interest rate concession for female students.

When you dream of pursuing your higher education and plan to take an education loan to finance your education, the process of applying for a student education loan in private banks can be challenging. Remember that while private banks offer attractive interest rates and repayment options, private banks offer easy loan applications and take less time to approve loans. Moreover, maintaining a strong credit history, preparing all necessary documents, and staying organized throughout the application process is essential to ensure a successful loan approval.

At GyanDhan, we understand the importance of securing financing for your education. That's why we're here to support you every step of the way. We connect students with a wide range of education loan options, including those offered by private banks, to help you find the most suitable financing solution for your academic journey. With GyanDhan, you can access personalized loan recommendations, expert guidance, and a seamless application process.

Don't let financial barriers stand in the way of your education. Explore your options, make informed decisions, and leverage resources like GyanDhan to turn your educational aspirations into a reality. check your loan eligibility and take the first step toward a brighter future!

Read how GyanDhan can help you get:

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  ICICI bank education loan
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  IDFC Bank education loan
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  Axis Bank education loan

Frequently Asked Questions

How can I apply for a student education loan in private banks?

 

To apply for a student education loan in private banks, you can follow these steps:

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  Research different banks and compare their loan offerings, interest rates, and repayment terms.
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  Check the eligibility criteria and documentation requirements of the bank you want to apply to.
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  Fill out the loan application form and attach the required documents, such as proof of admission, identity proof, address proof, income proof, and academic records.
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  Submit the loan application form and documents to the bank.
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  Wait for the bank to process your application and approve the loan.

What is the interest rate and repayment period for student education loans in private banks?

 

The interest rate and repayment period for student education loans in private banks may vary depending on the bank and the type of loan. However, most private banks offer education loans at competitive interest rates, ranging from 12-14%, and repayment periods of up to 15 years.

Can I get any tax benefits on my education loan from private banks?

 

Yes, you can get tax benefits on your student education loan under Section 80E of the Income Tax Act. You can claim a deduction on the interest paid on your education loan for a maximum of 8 years or until the loan is fully repaid, whichever is earlier.