Get instant loan offer suitable to your profile !
On this Page:
Read GyanDhan’s guide on education loan sanction letter, format and sample of education loan sanction etter and how to get sanction lender from lenders.
The education loan process is long-winded and fraught with multiple steps.
It starts with you researching the eligibility for a loan. After reading the lengthy novel-like terms and conditions, you understand maybe one or two things. The next is filling up the application form. Do you know all the documents that you have to submit? Probably not. So you run from pillar to pillar, gathering the documents you need to submit just the next day. After this marathon, you finally submit your loan application. Now you have to wait for some letter. And the wait, still, continues.
A sanction letter is an official document provided by the lender that indicates the basic information about the education loan, such as the loan amount, student’s (borrower) name, interest rate, loan tenure, and other terms and conditions. It is proof that the student has successfully applied for and been granted the loan.
The sanction letter is either sent by post or handed a hard copy to the student against acknowledgment. It is given once the loan is approved and sanctioned after the student submits the loan application form and the required documents.
A loan sanction letter can be submitted as proof of funds for your admission and visa purposes.
Some foreign universities require students to submit proof of their ability to pay for their education before granting admission. Students must show proof of funds while applying for a student visa for countries like the USA, UK, Australia, and Germany.
For example, to get an I-20, you must submit proof of financial support, for which the minimum fund requirement is 10,000 USD. In this case, a loan sanction letter makes you eligible for an I–20.
Check Your Education Loan Eligibility
Generally, education loans are sanctioned once students submit proof of securing admission abroad. However, students often need a sanction letter before getting admission to a university. In this situation, a pre-approved sanction letter helps them.
A pre-approved sanction letter is a provisional sanction letter given to the borrower before they secure admission to a university. This letter can prove financial support during the admission process and, for select countries, during the visa process.
Students can apply for a pre-approved education loan after receiving their standardized test scores. Remember, this facility is available with select lenders. If the lender finds any discrepancy with your application or submitted documents later, the pre-approved loan can get canceled.
The format of an education loan sanction letter varies for different lenders. While some lenders issue a 2 - 3 page long sanction letter, some others make it concise to fit within one page.
Based on the format mentioned above, here is a sample for an education loan sanction letter. Since the template for each lender varies significantly, we have adopted a format followed by a prominent public sector bank in India for study abroad education loans.
Education loan sanction letter
XYZ Bank letterhead
To,
Date: 20/07/2023
Mr. ABC
S/O BBB
R/O New Delhi
(Adress of the borrower)
Mr.BBB
(Adress of parent/ co-borrower)
Dear Sir/ Madam,
Subject:
EDUCATION LOAN SANCTION OF Rs. 30 LAKHS
We are pleased to inform that we have sanctioned an education loan of Rs. 30,00,000 (Rupees Thirty Lakhs) in your favor under the terms and conditions given below.
Terms and conditions of loan sanction |
|
Name of the borrower |
ABC |
Name of the co-borrower |
BBB |
Name of the guarantor |
CCCC |
Course details |
Master of Business Administration, York University, Canada |
Amount sanctioned |
Rs. 30 Lakhs |
12% per annum |
|
Type of interest |
Floating |
Margin |
5% |
Credit insurance premium |
Rs. 30,000 |
Repayment period |
Repayable in 120 equated monthly installments of Rs. 27,000 each w.e.f. 06/06/2026 |
Holiday/ Moratorium period |
36 months |
Amount of EMI |
Rs. 52,080 |
Processing fee |
Rs. 5,000 |
Documentation fee |
0.00 |
Other charges |
0.00 |
Loan will be disbursed once the student gets the visa. All loan terms and conditions are met. |
|
Security details |
Primary - Assignment of the future income of the student for payment of installments |
Collateral - Credit guarantee on the house property of the co-borrower |
|
Guarantor - |
|
Loan account number |
1234****9089 |
Loan account branch |
Rajiv Chowk, New Delhi IFSC Code: BB09HB |
Penal interest, if any |
In case of default in any repayment of loan or non-compliance of the terms and conditions, the borrower shall be bound to pay a penal interest of 2% of the default/ irregular amount. |
The above sanction is, however, subject to
Please convey your acceptance for the terms and conditions of the sanction.
Thank you
Manager, XYZ Bank Ltd
The documents required to get a sanction letter vary depending on the type of lender. They are submitted with the initial loan application. A generalized list of documents is as follows:
Self-employed co-applicants:
Salaried co-applicants:
The applicant will have to submit collateral documents along with the above-mentioned documents in case the student has applied for a secured education loan.
The process of getting an education loan sanction letter is long stretched and requires multiple actions. You must choose your lender, prepare the documents, pay the processing fee, and wait for approval. The process is slightly different for various lenders, as you can see in the sections below.
The education loan sanction process in public sector banks is slightly lengthy that can take up to one month.
The process to receive the sanction letter is in three steps.
The education loan sanction letter for private banks, like Axis Bank, ICICI Bank, and IDFC First Bank, is as follows:
For a secured loan, the bank will evaluate the property and complete the documentation, while, for unsecured education loan, the bank will evaluate and verify the credit history of the applicant and the co-applicant.
The process for an education loan sanction letter for Non-Banking Financial Companies (NBFCs) starts with filling up the loan application, submitting the required documents, and receiving the sanction letter. Here are the details of the process for different NBFCs:
International lenders like MPOWER Financing and Prodigy Finance offer education loans to students without any collateral or co-signer. They offer a provisional loan offer within 2 days of applying for the loan, which is valid for up to 2 weeks. Once the student accepts the offer, the lender issues a Loan Confirmation Letter, otherwise known as the Sanction letter.
To ease the education loan process for the USA, MPOWER and Prodigy Finance issues two types of sanction letters:
The letters are available on the dashboard of the applicant’s account. Read more about MPOWER Financing and Prodigy Finance education loan process here.
An education loan sanction letter is a formal document outlining the details of your education loan. It serves two purposes - informing the funding details for you and answering multiple inquiries on your funding options by the university and visa authorities.
On receiving the education loan sanction letter, you must go through the details specified and inform the lender that you agree with the terms and conditions. Unless you don’t inform the lender, there might be no disbursement post the issuance of the sanction letter.
However, there is a challenge in getting a sanction letter - the process is long stretched and can lead to rejection at the last minute if you make any mistake. Avoid the lengthy process and make your application hassle-free, and get the loan sanction letter within days of submitting the documents. Take advantage of the opportunity - check your education loan eligibility now.
Read also:
To get a sanction letter online, you must apply for any of the SBI education loan schemes online or offline, submit the relevant documents, and let the bank verify all the details you submit. If you are eligible for an education loan, the bank will issue a sanction letter, which you can request them to send via email.
When you apply for an education loan, the lender examines all the documents for security purposes. The verification process involves legal documentation of your collateral if you are applying for a secured education loan and a legal agreement with the co-applicant for unsecured education loans.
HDFC Credila loan sanction letter is an official statement provided by HDFC Credila to an applicant showing basic loan data, like course details, loan amount, names of the borrower and co-borrower, interest rate, margin, etc. Refer to the sample of an education loan sanction letter in the blog for a detailed understanding.
Public and private banks, NBFCs, and international lenders take up to 2 days to issue the sanction letter once the student pays the loan processing fee.
The ICICI education loan process is easy if your profile is strong. You can explore various schemes by the ICICI Bank and apply for the right option. Make sure you have a good academic background and a co-applicant with the required salary.
Yes. You can submit the education loan sanction letter as proof of your I-20 application.
In typical cases, there are fewer chances of delays if you meet the eligibility requirements and the documents are submitted correctly. There might be unexpected delays if your documents are not proper. It will take more time for the lender to evaluate and proceed further with your application.
In general, you cannot expect a pre-approved sanction letter from all the lenders without analyzing your profile. Getting a pre-approved education loan sanction letter depends on the strength of your application and the lender’s decisions.
Check Your Education Loan Eligibility
Ask from a community of 10K+ peers, alumni and experts
Trending Blogs
Similar Blogs
Network with a community of curious students, just like you
Join our community to make connections, find answers and future roommates.. Join our CommunityCountry-Wise Loans
Best Lenders for Education Loan
ICICI Bank
Axis Bank
Union Bank
Prodigy
Auxilo
HDFC Credila
IDFC
InCred
MPower
Avanse
SBI
BOB