How to Apply for an Education Loan After Completing 12th Class

The application process for an Education Loan after completing 12th class starts with securing your admission in a recognised institute first. Once this is done, you must gather the requisite academic and financial documents, choose a lender that suits your needs, meet the basic eligibility criteria and submit your application to the lender.
Education loans bridge a crucial financial gap for students who have completed 12th class and aim to secure admission in their dream university in India or abroad. In this blog, we will break down the complete process to apply after completing 12th class.

Steps to Apply for an Education Loan After Class 12

Here are the steps you must follow to effortlessly apply for a student Education Loan after passing Class 12: 

Step 1: Secure Your Seat

Education Loan providers in India often require documents like institute admit letter or entrance test results to ensure that your admission is confirmed. This is why it is important to first choose a reputable institute/university and secure a seat in your dream course.

Step 2: Research and Compare Lenders

Start by researching banks and NBFCs that provide education loans. Compare their interest rate, loan tenure, repayment duration, and processing fees. This comparison allows you to choose a lender that offers the necessary funds at the most favourable terms.

Step 3: Meet the Eligibility Criteria

Every lender has a pre-established set of minimum eligibility criteria for potential Education Loan applicants. Certain lenders approve loans only for a pre-determined list of institutions. Besides, you must also conform to the age, citizenship, co-applicant requirement and any other eligibility criteria to ensure swift approval.

Step 4: Prepare the Necessary Documents

Applying for an Education Loan after 12th Class comes with submission of necessary documents as required by lenders. While the actual list of documents may vary from lender to lender, it is wise to keep the following most requested documents ready:

• Academic documents such as 10th and 12th mark sheets
• Proof of admission such as admission letter/entrance test results
• KYC documents such as Aadhaar and PAN card
• Co-applicant documents including KYC, financial and employment documents
• Passport-size photographs of applicant and co-applicant

Step 5: Submit Your Education Loan Application

Once everything is in place, you can submit your application to a preferred lender. With most lenders offering a digital process, you can apply for an Education Loan from the comfort of your home using just a laptop or even your mobile phone. However, ensure to fill in all the details accurately as per official documents and upload all the requested documents in clearly scanned digital format.

Step 6: Verification and Sanction

Once submitted, the lender checks your application and documents. Once approved, you will get a sanction letter specifying the sanctioned amount, interest rate, and repayment tenure.

Step 7: Disbursement of Loan

After you get approved for a loan, the loan amount is disbursed to either your or your educational institution's account.

Also Read: Top 10 Reasons Why Education Loan Applications Are Rejected

Why Should You Take an Education Loan After Class 12?

Most students in India consider a student Education Loan as the last and final option. However, this can be one of the best financial decisions you can make to invest in your career and reap the benefits for years to come. Here are the benefits of an Education Loan you must know:

• Covers every expense for your higher education: A student Education Loan helps you cover every expense, like tuition fees, examination charges, study materials, accommodation, traveling, a laptop, and other expenses.
• Peace of mind: You are relieved that you don't have to borrow or arrange money from somewhere else and that you can comfortably complete your education.
• Encourages financial discipline: You learn to make payments in a disciplined manner.
• No compromise on career options: You don't have to sacrifice your dreams or goals due to a lack of finances.
• Easy repayment: Repayment usually begins after you complete the course, so you can first focus on securing employment.

Also Read: Understanding Education Loans: A Guide to Different Types and Their Benefits

Higher Education Loan Eligibility Criteria After Class 12th

You can apply for a student loan for higher education after the 12th class, but you must meet these general eligibility criteria first to avoid rejection:

1. Age and Citizenship: You must be an Indian citizen between 16-50 years.
2. Successful Completion of Class 12: You must have completed class 12 (10+2) from a recognized board.
3. Admission Letter: You must have been admitted to a recognized undergraduate or professional course in India or overseas by means of entrance exams or selection by merit.
4. Course type: Professional, vocational, and technical courses have more opportunities to get approved for a loan.
5. Academic performance: You must show a good academic performance.
6. Co-applicant: You need a parent or guardian as a co-applicant for proof of income and repayment capacity.
7. Documents: You are required to submit relevant documents such as mark sheets, admission letter, identity proof, and income proof of the co-applicant.

Also Read: 5 Proven Tips to Secure the Lowest Interest Rate on Your Education Loan

Documents Required for an Education Loan

Here is a more detailed list of documents that you must keep ready when seeking to apply for an Education Loan application:

• Passport-size photographs
• Identity proof (Aadhaar, PAN, Passport, or Voter ID)
• Address proof (Utility bills, Aadhaar, Passport, or Ration Card)
• Admission confirmation letter
• Academic certificates (10th and 12th mark sheets)
• Income proof of co-applicant (salary slips, ITR, bank statements)

Tips to Increase Your Chances of Getting Approved for a Student Education Loan

Follow these steps if you want to make sure that your student Education Loan is approved without any issues:

• Maintain great academic records: Not only is good academic performance an important factor for getting admission to the university of your choice, but it also indirectly tells the lenders that you are serious about your studies.
• Choose colleges and universities that are widely accepted: Lenders are more inclined to give loans for courses at reputed or accredited institutions because they are more likely to give a good future.
• Choose professional or job-oriented courses: Courses like engineering, medicine, management, or others are preferred by the lenders as they have a high rate of employability.
• Provide collateral: If you want to avail yourself of a student loan for a large amount, then using your property, FD, or other collateral as security should help you get approval.
• Choose a financially stable co-applicant: A guardian or parent with stable income, a good credit report, and sound financial history can help you improve your chances.

Also Read: How to Get an Education Loan for Hotel Management Courses

To Conclude

Clearing the Higher Secondary Certification (12th) exam opens doors to many opportunities and streams that you can pursue. However, quality education in India or abroad always comes at a cost.

At Poonawalla Fincorp, we ensure that higher education loans are both affordable and supporting. We offer collateral-free education loans of up to ₹1 crore at competitive interest rates with benefits like flexible repayment tenure of up to 15 years. Apply now to start your higher education journey now!

Frequently Asked Questions

Can I get a student Education Loan before getting my admission letter?

Most lenders require admission confirmation from a well-known institution to process your application for an Education Loan. However, you should check with your preferred lender if an admission letter is mandatory during the application stage.

Will an Education Loan also pay for hostel and exam fees?

Yes, a student Education Loan usually covers your tuition fee, hostel fee, examination fee, and even the cost of study materials. The exact coverage of items can vary from lender to lender.

Do I require collateral for an Education Loan after 12th?

An Education Loan can be secured or unsecured depending on lender to lender. In general, the maximum loan amount is usually higher when you opt to provide collateral. However, you can also opt for a collateral-free Education Loan depending on lender to lender.

Can I get an Education Loan if my co-applicant has irregular income?

Irregular income reduces the chances of approval, and therefore, providing proper financial documents such as bank statements or ITRs is crucial for swift processing and faster approval.

Can I start repaying the Education Loan before finishing my course?

Yes, you can start to pay your Education Loan even before you finish your course, but most loans have a moratorium period that spans the course plus 6 months to 1 year after completion.