- Want to know why your student education loan is rejected?
- Read this post to know the possible reasons
Yes, an education loan request can be rejected if the borrower doesn’t satisfy the conditions put forth by the lender. The conditions can be academic, economic or any other. If the institute in which you want to get admission doesn’t have a good placement record, banks won’t show interest in lending you. Plus, some lenders want a co-applicant for an education loan. But if the co-applicant does not earn enough as required by the lender, the education loan application can be rejected. Read the post further to know the reasons for application rejection in detail.
Credit Score of the Guarantor and Co-applicant
If you borrow a loan from a bank, the first thing the bank checks is your credit history. And, in the case of the student education loan, the primary applicant is unemployed and has no credit history, so the parent or guarantor’s credit score is checked. When the credit score is below the requirement of the bank, the loan would be rejected.
Now, to cope with the credit score problem the first thing you have to do is check the credit report. Because, if you haven’t made any default, there must be an error in it. And, to remove it, you need to discuss with your bank or credit bureau.
Recognition of College or Institute
You secured admission but if it is not on the list of approved institutions of the bank, your application can be rejected. Students need to secure admission to a university that is recognized by the government and offers placements. Because the future income of the student is based on the institute he/she studies at, and if it is not on the list of institutes or recognized colleges, the bank may not give funds for higher studies.
In case the bank finds that the documents you provide are fake, the loan can get rejected. The academic details of the student are required for the loan sanction which is the 10th & 12th mark sheet or the admission letter from the institute. After you submit the documents to the bank along with your loan application form, it goes for a verification process after which the bank decides what amount to provide. And if the documents are fake, the loan can be rejected and you may also face some legal issues.
The Academic Performance of the student
Your loan application is for the higher studies and the only source on which the bank provides you the loan is your future income. And if your academic performance is not so great then the bank would consider your application weak and may reject it. Only the meritorious students whose academic performance shows great results could get an instant loan from the bank at an attractive rate of interest. So, watch out the above-mentioned factors while applying for an education loan so that it is not denied by the bank.