Education Loan Eligibility Calculator

Education loans support your academic aspirations by funding higher studies in India or abroad. Assessing eligibility ensures manageable repayments. Use Loanpao’s education loan eligibility calculator to plan your educational journey.

Calculate Your Education Loan Eligibility

What Is Education Loan Eligibility?

Education loan eligibility is determined by lenders based on the repayment capacity of the student or their parent/guardian. Key factors include income, credit score, academic performance, and course/institution credibility.

How To Use Education Loan Eligibility Calculator?

To use the education loan eligibility calculator, follow these steps:

  • Enter the monthly income of the parent/guardian and any existing EMIs.
  • Specify the desired loan tenure (up to 15 years, including moratorium).
  • Input the interest rate (typically 8-12% for education loans).
  • The calculator will display your eligible loan amount and monthly EMI.

How Is Education Loan Eligibility Calculated?

Eligibility is based on income, existing debts, tenure, and interest rate. For example:

  • Monthly Income: ₹40,000
  • Tenure: 7 years (84 months)
  • Interest Rate: 8%

Step 1: Calculate the maximum EMI you can afford

Banks allow up to 50% of monthly income for EMIs:

EMI = 40000 × (50/100) = 20000

So, you can afford ₹20,000 per month as EMI.

Step 2: Input values in the formula

The loan eligibility formula is:

P = EMI × [(1+r)^n - 1] / [r × (1+r)^n]

Where:

  • P = Loan amount
  • EMI = ₹20,000
  • r = Monthly interest rate = 8% / 12 = 0.006667
  • n = Loan tenure in months = 7 × 12 = 84 months

P = 20000 × [(1+0.006667)^84 - 1] / [0.006667 × (1+0.006667)^84]

P ≈ ₹12,40,713.36

Therefore, the eligible loan amount is approximately ₹12,40,713.36.

Education Loan Eligibility Criteria

Criteria Details
Age Limit 16 to 35 years (student)
Minimum Income ₹15,000 per month (parent/guardian); varies by lender
Maximum Loan Tenure 15 years (including moratorium period)
Credit Score Preferably above 650 (parent/guardian)
Academic Record Admission to recognized institution; good academic performance

Documents Required For Education Loan Eligibility

  • Application Form: Duly filled education loan application form.
  • Photographs: Passport-sized photos of student and co-applicant.
  • ID Proof: Aadhaar Card, PAN Card, Voter ID, or Passport (student and co-applicant).
  • Address Proof: Utility bill, Aadhaar Card, or rental agreement.
  • Income Proof (Co-applicant):
    • Salaried: Salary slips (3 months), bank statements (6 months), Form 16, ITR (2 years).
    • Self-Employed: ITR (2 years), bank statements (6 months), business financials.
  • Academic Documents: Mark sheets (10th, 12th, graduation), admission letter, fee structure.

Factors Affecting Education Loan Eligibility

Income of Co-applicant

Stable income of parent/guardian ensures repayment capacity.

Credit Score

A score above 650 for the co-applicant improves approval chances.

Course and Institution

Loans are more likely for recognized institutions and professional courses.

Existing Debts

High EMIs may reduce eligibility; clearing debts helps.

Academic Performance

Strong academic records enhance eligibility.

How To Improve Your Education Loan Eligibility?

Maintain a Good Credit Score

Ensure the co-applicant’s score is above 650 by timely payments.

Choose Reputed Institutions

Apply to recognized universities or colleges with strong placement records.

Reduce Existing Debts

Lower the co-applicant’s debt-to-income ratio by clearing loans.

Strong Academic Record

Maintain good grades to strengthen your application.

Frequently Asked Questions

Banks assess the co-applicant’s income, credit score, existing debts, and the student’s academic profile, limiting EMI to 50% of income.

Up to 15 years, including a moratorium period during studies.

Yes, a parent or guardian is typically required as a co-applicant to ensure repayment.