Documents Required for an Education Loan

“What documents are required for an education loan?” is a question nearly every loan applicant asks. For many applicants, gathering all the documents and understanding which ones they need becomes a very confusing process. In order to acquire an education loan, every single document plays an important role, be it KYC documents, income documents, or academic documents. Hence, it is essential to understand all the document types and their requirements. Here is a detailed list of the common education loan documents required by the banks for the education loan process.

Here is a quick checklist for your education loan journey. Use this as a guide and make sure the process is smooth and hassle-free. For your reference, the applicant refers to the student applying for the education loan, and the co-applicant is the co-signer of the education loan. 

The documents required for an education loan can broadly be classified into two categories: the documents provided by the applicant and the documents provided by the co-applicant. These are some of the basic documents every bank and NBFC (Non-Banking Financial Company) requires.

Documents Provided By The Applicant (Student)

These are the documents that the applicant has to submit:

Applicant's KYC Documents -

• Aadhaar Card
• Passport
• PAN Card
• Voter ID card (not accepted by all banks)
• Recent passport-size photograph

Address Proof Documents -

• Aadhaar Card
• Valid passport
• Rental/lease agreement (Latest) (where applicable)
• Valid electricity/water/LPG bill
• Magistrate/Gram Panchayat affidavit (not applicable for all banks)
• Voter ID card (not accepted by all banks)
• Updated passbook or bank account statement

Academic Documents - 

• Class 10th marksheet
• Class 12th marksheet
• Degree certificate (if going for Master's)
• Master's certificate (if applying for PhD)
• Test Scores (such as IELTS, GRE, GMAT) (if applicable).
• University admission letter (if available) 
• Gap certificate (if there is a gap in the resume)

Documents Provided By The Co-Applicant

A co-applicant is a joint signer who shares equal legal responsibility for paying back the education loan. Parents and legal guardians are the most preferred and common choice. In some cases, when the income of the primary co-applicant isn’t sufficient, banks ask for an additional co-applicant who meets the income requirement. They should be willing to bear the financial responsibility alongside the primary co-applicant and applicant. They are called financial co-applicants; banks and NBFCs both have their list of acceptable financial co-applicants. Do check with your bank before applying. Here is the list of documents required for an education loan by the co-applicant/financial co-applicant. 

Co-Applicant/Financial Co-Applicant Documents-

If Salaried: 

• KYC documents including recent passport-size photograph
• Salary Slips (latest 3 months)
• 6 months bank statements (where salary is reflected)
• Form 16 or ITR of the last 2 years
• Employee ID card

If Self-Employed:

• KYC documents
• Latest 1 year bank statement where business transactions are reflected 
• ITR of the last 2-3 years
• Last 2-3 years' balance sheet and profit & loss account 
• Proof of business address - GST registration/Municipal certificate/Trade licence and photographs of the business   

If NRI (Non-Resident Indian):

• KYC documents 
• NRO (Non-Resident Ordinary) or NRE (Non-Resident External) account 
• 1-year bank statement of the NRE/NRO account 
• Salary proof (latest 3 months)
• Abroad address proof
• 6 months bank statements of the Indian NRI bank account 
• Passport to check the NRI status 
• Additional financial documents such as foreign CIBIL report

If Pensioner:

• KYC documents
• ITR/Pension certificate
• 1-year bank statement 

If Agriculturist:

• KYC documents
• ITR/Mandi certificate
• 1-year bank statement 

Own House Guarantor (OHG):

• KYC documents
• Electricity bill/property tax proof

Note: OHG will be required if the co-applicant is staying in a rented house/is an NRI/residing in a non-serviceable area (such as J&K, North-East, etc.) The OHG doesn’t have to pledge any property and only serves as a point of contact in case the co-applicant cannot be contacted. The own-house guarantor can be any family member whose relationship can be proven.

Documents Required for An Unsecured Education Loan

Unsecured Education loans are loans that are not backed by any collateral. They are based on the co-applicant’s income; the higher the income, the higher the sanction amount. The education loan documents required for an unsecured loan are as listed below.

• Applicant and co-applicant’s KYC documents
• Applicant’s academic proofs
• Applicant and co-applicant’s residential documents
• Co-applicant’s income proofs

Documents Required for Secured Education Loan

Secured Education loans, also known as collateral-based loans, are mainly classified into two types: immovable property (such as house/flat/commercial property/land) and liquid securities (such as Fixed Deposits, Insurance, and Government Bonds). Depending on the bank’s policy, these assets can be used as collateral. 

Documents Needed For Immovable Properties 

1. Property Title Deed - This document is used to determine the ownership of the property.
2. Registered Sale Agreement - It is an official transfer of ownership document from the seller to the buyer. 
3. Allotment Letter - This document is provided by the builder and confirms that the property is allotted to the owner by the developer/government agency/housing authorities.
4. Chain Deed or Link Document - It shows the historical record of all the past owners of the property. In the absence of a chain deed, an encumbrance certificate can be used, which is provided by the local sub-registrar’s office.
5. Latest Property Tax Copy or Electricity Bill - These documents act as supporting evidence to confirm the property’s address and current occupancy. 
6. Municipality-Approved Building Plan or Plot Layout - This document is used to verify that the property plan has been approved by the authorities.

Documents Needed For Liquid Securities

1. Fixed Deposit - For FD, you require the FD document 
2. Insurance Policy - For an insurance policy, you require policy papers and a surrender value certificate 
3. Government Bonds - For government bonds, you require only the bond certificate 

Note: The above-mentioned list consists of the additional documents required apart from the basic documents such as KYC, address, academic, and income documents, which are mentioned at the start of the article.

The education loan journey doesn't end with just the application or the sanction letter. Many education loan documents are required and provided during the sanction and disbursal process. They are divided as follows:

Documents Required When Applying For An Education Loan

During the application process for your education loan, banks and NBFCs require a list of documents to start your application process. For public banks, those documents have to be submitted at the branch. For private banks and NBFCs, as their process is done online, you can upload them online on their portal. However, for some processes, you might still have to visit the bank branch. 

At the time of applying, you are supposed to attach 2 self-attested copies of your documents. Here is the list of documents required for an education loan during the application process. 

Proof of Identity - Aadhaar Card, PAN Card, Voter ID, Passport, Recent passport-size photograph

Proof of Residence - Aadhaar Card, Voter ID, Rental/Lease agreement, Passport

Proof of Education - Class 10th marksheet, Class 12th marksheet, Degree certificate (if going for Master's), Master's certificate (if applying for PhD)

Proof of Income - ITR of the last 2-3 years/Form 16, Salary Slips (latest 3 months), 6 months' bank statements, Last 2-3 years' balance sheet and profit & loss account

 Other Documents - Such as CV of the applicant, university admission application/acceptance letter (if available), completed loan application form

Documents Required Post-Loan Sanction

After the sanction letter is provided, the loan agreement, also known as the Memorandum of Deposit of Title Deed, is signed. If you are going for a collateral-based loan, then you are required to submit the original collateral papers at the time of signing. The loan account is then created, and the loan is now ready for disbursal.

Documents Required For Loan Disbursal

For disbursal of your sanctioned loan amount, the bank requires certain receipts. 

• Tuition Fee - For the disbursal of the tuition fees, the student has to email the fee payment invoice to the bank. After which, the bank processes the payment directly to the university account. The invoice is provided to the student every semester. In case any fee installment is paid by the student, they can claim reimbursement through the payment receipt. 

• Accommodation Expenditure - When you finalise your accommodation, a rental agreement/hostel agreement is created. This is used to request a set amount of disbursal every month from the bank on a particular date. This goes towards your accommodation expenditure.

• Other Expenditures - Costs such as food, groceries, phone charges, Wi-Fi bills, clothing, books, laptops, and travel charges are reimbursed. Because these expenses are subjective and fluctuate, prior disbursal is not possible. To receive reimbursement, the student must document these expenditures by keeping all receipts. The bank then reviews and processes the reimbursement.

Every bank has its own list of required documents, but in this comprehensive guide, we have listed the document requirements of all banks in one place. The following table lists the main required documents for each bank and the additional conditions they focus on when processing education loan applications.