Extensive research, multiple location based training, high end teaching and practical interfaces have left no stone unturned in making modern day education reach the pinnacle of its time. With these advancements, going for a quality education is not affordable for everyone anymore. The fees have increased manifold times and some amenities that were termed as luxuries earlier, such as the internet, computers, smartphones, are now basic necessities.
A vital investment in one’s life, education is now a commonly bank financed activity. In this article, we take a look on what a bank needs from a customer who seeks an education loan. We discuss a few formalities, checklist and understand what is needed to satisfy the bank for the same.
1. Admission Documents: The first and foremost requirement would be producing the documents pertaining to admission. These documents would include:
(a) Admission Letter: The enrolment or admission letter is the prima facie for beginning the process of your education loan. It is recommended to present it along with the document proof of the method of securing admission (mark sheet of any competitive examination you gave or SAT score sheet).
(b) Prospectus: The prospectus of the institution or university you are being admitted into is going to help the bank in researching about genuineness, job placement record, accreditations and other important data about the university and the course you have enrolled into.
(c) Fee Structure: Usually, fee structure is the part of the prospectus, but is critical enough to have a separate tab mentioned as it is the fee structure which would enable the bank to asses the quantum of finance it can provide to you on the loan.
2. Past Education Records: The past performance is an important criteria that gives unbiased data to the bank in deciding its exposure. Present all the past education records in a chronological format, making them easily accessible to the officer processing your loan.
3. Know Your Customer (KYC Norms): KYC norms refer having government/employer verified and authenticated facts about you. These facts include Name, Date of birth, residential address, permanent address etc. Documents that suffice as KYC ones are driver’s license, voter identification card, PAN Card etc.
These KYC documents play a critical role in generation of credit score as well as in pre-sanction inspection.
4. Job Details: Having a job prior to joining a new education loan is always a pro. Since one has to leave the job before getting enrolled for an education loan, your seriousness and importance for the loan is increased. Also, the loan assessment officer would find you to have an edge over your competitors when you sit for placements.
5. Account Statements: A decent transaction in the account is always necessary and there is no better way to analyse the same than the account statement itself. Also, the officer can track if any EMIs are being paid and other regular investment being made. Submit a bank’s attested account statement of all the accounts.
6. Property Papers: If the loan amount is high, the bank might ask you to either mortgage a property or assign a fixed deposit or an LIC policy. In the case of mortgaging a property, take a clear photocopy of all the documents and submit it in the bank along with the other documents.
After submission of these documents, the legal officer would undergo through these photocopies to tell you whether the property can be mortgaged or not.
When you deposit a FD or LIC policy, you have carry original documents along with details of their present value.
7. Formalities for Parent/Guardian/Co Applicant: When the bank asks for the details for your parent or guardian or any other applicant who will share the obligation of the loan, attach their KYC details, income proof and account statements too.