Know the Reasons Why Your Education Loan Application Got Rejected

    Updated on: 11 Sep 2023 7 min read

    8 reasons why your education loan application can be rejected


    Education loans in India are facing a concerning rise in Non-Performing Assets (NPAs), as reported by the Ministry of Finance, India. As of June 2022, about 8% of education loans granted by public sector banks, including SBI, Canara, UBI, and IOB, have turned into NPAs, amounting to INR 6,246.42 Crores.

    Due to this growing issue, lenders have become more cautious during the loan application process. Unfortunately, many applicants experience disappointment when their education loan applications are rejected due to small errors made unknowingly. To help our readers, here are some key reasons for education loan application rejections that can be avoided through careful planning.

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    Frequently asked questions

    Should the co-applicant be a blood relative of the applicant? 

    Many lenders mandate that the co-applicant must be a close blood relative of the applicant. However, if the co-applicant has a good profile and earns a higher salary, lenders may agree with negotiations even if the co-applicant is not the applicant’s blood relative.

    Is admission to top institutes mandatory for education loans?

    No, but many lenders keep a list of eligible courses and universities to give education loans. The applicant must adhere to the eligibility criteria prescribed by the lender and should study in a course or university that the lender supports. 

    Can the collateral value influence the rejection of education loans? 

    No, but the loan amount will be lesser than what is required of you. 

    How can I avoid a loan rejection if I don’t have proper documents?

    In case you don’t have proper documents, your chances of getting an education loan will be lower. In this case, you can consider lenders who will be negotiable with documents. 

    Is there any chance for an education loan if my application is rejected?

    You can apply for more education loan options if you meet the eligibility criteria set by them. It is better you research the available options so that you can explore them if the first application is rejected. 



Yogi1
Written by Yogender Panchal

Yogender is a tech enthusiast with specialization in digital marketing. He is currently working at Gyandhan a leading company which provides Education Loan who are studying Abroad. Playing Volleyball, driving a car, traveling, researching new online marketing trends are some of his interest areas that keeps his rejuvenated.


Photo aman jain
Reviewed by Aman Jain

Aman Jain graduated from IIT Kanpur, and currently functions as the CMO at GyanDhan. He is deeply passionate about creating equality in higher education and has directly interacted with 2 Lakh students in his 8-year-long journey.


Specializes in:
Education loan , Study Abroad Admissions


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GyanDhan is India's first education financing marketplace.



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