The terms “Marksheet loan” and “Student Loan” can sometimes be used interchangeably. Public sector lenders as well as a sizable portion of private lenders have stepped up to the plate in response to pressure from the national government and Reserve Bank of India (RBI). They provide marksheet loans to deserving students who want to advance their careers by attending top colleges but need financial support. Here is all you need to know about marksheet loans whether you are a student or parent, including how to apply, who is eligible, what documentation is needed, and the interest rates.
What is a Marksheet Loan?
Students who desire to continue postsecondary education at authorised colleges and institutions can apply for a marksheet loan. They are unable to cover the fees and other ancillary expenditures due to their financial situation. A marksheet loan differs from other types of loans in that repayment is postponed for the duration of the course and there are no instalment payments due until the course or degree is finished.
Some lenders even provide an extra 6- to 12-month moratorium period following the completion of the course. But there’s more! For marksheet loans, there is no requirement for collateral, however there is a maximum. In addition, the borrower can deduct the interest component of the instalments from taxes under section 80E.
Marksheet Loan Eligibility
- Minimum age of applicant must be 18 years old;
- A letter of confirmed admission from the college or university where the applicant plans to enrol is required. The college or university must be accredited by the UGC, the government, the AICTE, or another recognised body in order for lenders to finance study at that institution.
- A co-borrower is required to enrol in full-time courses. Co-borrowers may be parents, guardians, or spouses.
- Maximum age of applicant at loan maturity must be 65 years old;
- The candidate must be legally residing in India.
- Minimum length of employment must be three months; and
- Minimum net monthly income must be three thousand rupees per month (Rs.3,000 in Mumbai, Delhi, Bangalore, Chennai and Hyderabad & Rs.3,000 in Calcutta, Ahmadabad and Cochin)
- A copy of the Institute’s letter of confirmation of admission with the complete fee schedule.
- A 10th or 12th grade marksheet copy.
- Properly completed loan application form with two borrower photos.
- Form of Guarantor
- Copy of voter ID, passport, driver’s licence, or Aadhaar card as proof of age
- A copy of your voter ID, Aadhaar card, driver’s licence, or passport
- For the spouse, guardian, and co-borrowers, bank statements or passbooks from the previous six months serve as proof of income. You may need to provide Form -16 and ITR form as proof of your income if the lender requests it.
- You will be required to present both a disbursement request that is personally signed by you and a demand letter from the institution at the time of disbursement.
What are the Interest Rates?
Different banks have different interest rates on the loan amount. The base rate and markup are often added to determine the interest rate. The base rate typically ranges from 8% to 10%. Thus, the interest rate varies from bank to bank and is between 6.85 and 15.20 percent. The size of the loan and the particular college or university has an impact on the interest rates as well.
Courses Covered By Marksheets Loan
- Courses leading to a degree or diploma from reputable institutions or universities that have been accepted by the government, the UGC, the AICTE, the IMC, etc.
- Leading independent educational institutions like IIM, IIT, etc. regularly provide degrees and diplomas.
- Fields of education, such as engineering, management, medicine, computer science, pure science, architecture, agriculture, hotels and hospitality, fine arts, and design, among others.
- Courses in technical and vocational fields as aviation, air hostess, shipping, nursing, teacher preparation, etc.
Required Security or Collateral Obtain a Loan
The quantum, or needed loan amount, and the primary borrower’s credit worthiness determine the loan’s security. Fixed deposits, residential real estate, including homes, apartments, and flats, non-agricultural land, and life insurance with an insured sum equal to 100% of the marksheet loan amount are all acceptable forms of collateral.
The following items qualify as collateral or security for a loan secured by a marksheet:
- No security is needed if the parents are a joint borrower for loans up to Rs. 4 lakh.
- Between Rs. 4 lakh and Rs. 7.5 lakh in loan amount The safety of parents ought to be ensured by a third party.
- Parental co-borrowers are required for loans over Rs. 7.5 lakh, as well as a physical security deposit equal to 100% of the required loan amount.
How to Request a Loan Based on Marksheets
It’s not difficult to obtain a marksheet loan; lenders have made the procedure straightforward, and some will even accept internet applications. Here is a step-by-step tutorial for requesting a marksheet loan:
- Calculate the total cost of the Course
Before submitting an application for a loan, the borrower should sit down and estimate all of the expenses spent over the semester. This covers tuition, lodging charges, travel, meals, the use of the library, and any other incidental expenditures. Keep in mind that your estimate ought to be fair and backed up by supporting documentation.
- Apply for a Loan
When you visit the lender, fill out the application form and talk to them about your needs. As an alternative, you may fill out the online application that the major lenders give to apply for a marksheet loan. Provide all the evidence and paperwork needed for the application, then submit it for consideration. Documents are any of the different evidence we previously covered, such as KYC documents, admission letters, guarantor information, copies of grade reports, etc.
- Await Loan Approval
The lending organisation will assess your loan application and choose whether to approve the desired amount or refuse it. While assessing the loan application, the lender may require some further documentation or justifications.
Marksheet Loan and Banks’ viewpoint
It is asserted that because loans are viewed as debts, they cannot be claimed as matters of right. The money borrowed must be returned to the lender within the loan’s stipulated term.
The claimed overdue amount is close to or equal to Rs. 50,000 crores, according to Indian banks. As investments for the expansion of economic growth and prosperity, marksheet loans should be promoted. A developing or developed country will exhibit this.