A Complete Guide to Student Loans in India

This article serves as a complete guide on loan for students and amount to be taken from India for higher studies abroad. It is for all those students who are searching for how to apply for a student loan in India for studying abroad including documents required for loan processing, student loan application, sanction procedure, and other guides.

Rate of Interest for Student Loan for Overseas Universities

The rate of Interest differs from bank to bank. It is normally from 11.75 to 12.5% in all nationalized banks. Also, there is a discount of 0.5% for girls who apply for the loan.

Now first of all prepare the following documents before applying for a student loan in India

1. All the mark sheets of the last examination you have qualified
2. Proof of studentship or admission scholarship
3. A brief detail of expenses required for a specific course
4. Passport size photographs (Two)
5. Statement of bank account for last 6 months
6. Income tax records for last 2 years
7. Statement of liabilities and assets of the borrower and the coborrower

For statement of liabilities and assets

Here you will need to submit the agreement (Patta or Land Agreement), blueprint of the house, valuation report of house from a bank panel valuator, legal opinion from bank panel lawyer to prove that your property does not have any legal issues (this may take a few months if you go as it is but you can get it done within a week’s time when you pay additional fees to the lawyer and panel engineers). For this, you need to check with the bank to know who are the panel engineers and panel lawyers.

Submission of Student Loan Application

After completing the above requirements, you can verify your documents with the bank and give an application along with the above documents. If the bank requires any additional documents, they will inform the same. You will also need to submit the expense statement along with the application which is TUITION FEES + LIVING COST FOR THE PERIOD OF STUDY- this particular thing must also be filled in the application in Indian Rupees. There will be a separate provision for filling this and you need to give the breakups like:

Tuition Fees

Living - boarding plus lodging plus travel plus other expenses

Amount Sanctioned

According to the RBI Policy for application of student loans for overseas universities, banks have the right to sanction loan from 75 to 85% and this depends upon banks and bank officials. Also, they will consider your security for the loan.

Best Method of Taking Amount to the University

We can request bank to either transfer the money to the university or give a demand draft in favor of university. Also, request them in two DDs, one in favor of the University and another in favor of Yours for Cost of Living and Personal Expenses. I have heard from various previous student loan applicants that if you are carrying a single demand draft in University’s name and nothing in your name, it becomes very tough for the students to get the remaining money apart from the fees from the university since they have the policy of returning the remaining money after our course gets completed, so always ask the bank for two separate DDs or travelers check.

So above is a complete guide for getting student loans in India including documentation for student loans, submission of student loan application, sanctioned amount, and student loan rate of interest in India. You can also find more details and facts about student loans in India through my other guides.

Happy Studying