How Much Education Loan Can I Get
How Much Education Loan Can I Get
Blog Article
The Impact of Parental Income on the Maximum Loan Amount
Introduction
How Much Education Loan Can I Get? The income of your parents or co-applicants is a major factor in determining how much you can borrow when you apply for an education loan in India. Before granting the loan, lenders evaluate the financial standing of your co-applicant, who is typically a parent or guardian, regardless of whether you are applying through a private NBFC or a nationalized bank.
The Significance of Parental Income
Banks assess the co-borrower's financial standing to guarantee EMI payments beyond the moratorium period because students usually don't have any income.
The maximum EMI your family can pay is determined by lenders using the Debt-to-Income (DTI) ratio and net monthly disposable income. This, in turn, places a cap on the total amount of credit you are eligible for.
Loan Amount Based on Parental Income: Typical Scenarios
| Parental Monthly Income (Net) | Unsecured Loan Eligibility (No Collateral) | With Collateral (Optional) |
| ₹20,000 – ₹30,000 | ₹2 – ₹5 lakh | ₹7 – ₹10 lakh |
| ₹40,000 – ₹60,000 | ₹7.5 – ₹10 lakh | ₹20 – ₹25 lakh |
| ₹75,000+ | ₹10 – ₹20 lakh | ₹30 lakh+ |
| ₹1 lakh+ | ₹20 – ₹40 lakh | ₹50 lakh – ₹1 crore |
These numbers differ by country, course, and lender. Higher limitations are frequently approved by NBFCs with flexibility.
Conservative nationalized banks like SBI, PNB, and Canara Bank follow the ₹7.5 lakh unsecured cap until collateral is presented.
Other Elements That Affect Income
- Co-Applicant's CIBIL Score: Eligibility is increased by a credit score exceeding 700.
- Employment Type: People with steady salaries are favored over independent contractors.
- Availability of Collateral: High-value real estate can help get beyond income limitations.
How to Become More Eligible for Loans
- Include a second co-applicant, such as both parents or a financially independent relative.
- To lessen the impact of EMIs, select lengthier payback terms.
- To lessen dependency on income, provide collateral in the form of real estate, FD, or LIC policies.
- Choose a smaller loan amount first and ask for a top-up later.
- Choose NBFCs that assess earning potential in addition to parental income, such as Avanse or HDFC Credila.
Real-World Illustration
- A student who has been accepted to a university in the United States requests a loan of ₹40 lakh.
- If their father has no other EMIs and makes ₹50,000 a month, Qualified for around 15 lakh unsecured
- May receive the full ₹40 lakh with house collateral worth ₹60 lakh.
- Parents may only be eligible for ₹5–6 lakh if their income is ₹30,000 and they have no collateral.
Conclusion
How Much Education Loan Can I Get? When applying for an education loan without collateral, parental income is a significant factor in determining the maximum amount you can receive. To make sure the co-applicant can continue to make EMIs after the moratorium period is over, banks look at income. Public banks are more stringent and adhere to set rules, but NBFCs provide more flexibility by accounting for the course ROI and future income potential.
Think about bringing on a co-borrower, providing collateral, or contacting NBFCs that offer customized solutions if your parents' income is lower than average. The key to obtaining the money required for your academic objectives in 2025 is comprehending and making plans around your family's financial situation, given the escalating costs of college. Report this page