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Education institutions play a significant role in
student’s life by imparting the necessary skills and knowledge to make them
career-ready. To provide an excellent learning experience, these institutes
must be equipped with new-age educational infrastructure. To enable a conducive
learning environment, academic institutes opt for an education institution loan
(EIL). So, here is everything you need to know
about loans for schools and colleges.
Key Highlights
·
What does a loan for
educational institutions cover?
o
Construction/renovation
o
Technological infrastructure
o
Other needs
·
Can you opt for loans for new
educational institutions?
·
Student loans for vocational
schools
·
How to get an education
institution loan?
What does a loan
for educational institutions cover?
Construction/renovation
Teaching institutes such as colleges and universities offer infrastructure
and amenities such as innovative classrooms, libraries, equipment, learning
devices and learning pods, among others, to enhance the student experience. Education
institutions opt for EIL to provide these facilities. Financial institutions
offer EIL to build or renovate the premises too.
Technological infrastructure
Institutions and teachers have embraced digital tools to address the
short attention span of students. Whiteboards, smart classrooms, projectors,
audio-visual teaching, interactive and participative modules of learning, and AI
and ML-based e-learning tools have become an integral part of the learning
environment. You can opt for an education institution loan to accommodate this
digital transformation.
Other needs
You can opt for an institutional student loan to purchase a new property or land or to meet working
capital needs. Outdoor sports are imperative for the overall development of
students. Hence, many schools and colleges build playgrounds and indoor game
spaces too. If purchasing land to meet the learning needs of your student
community has been on your mind for some time, this is the right time to opt
for EIL.
Can you opt for loans for new
educational institutions?
All the education institutes, such as K-12
establishments, higher education colleges, well-known training and coaching
institutions, and companies that provide technology and material supplies to
educational institutions, can opt for EIL.
Student loans for vocational
schools
Most financial institutions will offer loans for
vocational schools. However, before applying for an EIL, please research to
check with your preferred education institution loan partner if it will provide
you with an EIL.
How to get an education
institution loan?
· Research: Conduct thorough research to find out the right financial partner based on the financier’s domain expertise in managing education loans, customer service, customer ratings, interest rates, features and benefits extended to you.
· Select the right tenure: Although the repayment tenure will completely depend on the education institution’s financial capacity, it is advised to talk to the lender as they will guide you to choose the best term. The longer the tenor, the lower will be the interest rates.
· Arrange the documents: You will need to provide general documents as well as financial documents.
Here is the list of documents that you will need when
you apply for EIL
o
General documents
ü The application form, along with a photograph and a
signature across the photograph
ü KYC documents – ID proof and address proof
ü Your organisation’s trust deed, MOA, AOA, bye-laws, or
partnership deed
ü Registration/Incorporation Certificate
ü Approval from the AICTE, DTE, ICSE, CBSE or any other
relevant authority
ü Collateral security-related documents
o
Financial documents:
ü Financial report of the previous 3 years, along with
the audit report
ü Income Tax Returns of the previous 3 years
ü Bank statement of the previous 12 months from the main
operating account
ü All loan sanction letters and statements since the organisation’s inception
·
Application process:
o
Step 1: You need to submit the login documents and initial processing fee.
o
Step 2: The lender will assess your eligibility and will inform you accordingly.
If you are eligible for the loan, you need to provide the rest of the
documents.
o
Step 3: The lender will complete the technical, legal and financial due
diligence.
o
Step 4: If you meet the financer’s preset criteria, the lender will finalise the
sanction terms, post which you need to clear the balance processing fee. The
lender will then issue the final sanction letter.
o
Step 5: You need to execute the necessary resolutions, and finally, the loan
will be disbursed by the lender.
Can you opt for EIL without
assets?
You can choose between two types of education
institution loans: unsecured and secured loans. You don’t have to offer any
asset as collateral for an unsecured loan. But for a secured loan, you have to
offer collateral as a security against your EIL. You can communicate your
requirements before applying for an education institution loan to your
financial partner.
So, this is everything you need to know about
education institution loans. You can opt for an education loan for private institute that provides education to
students. We at Avanse Financial
Services offer education institution loans to democratise education and
education financing space. If you need any assistance, please feel to connect
us.
We always aim to offer you competitive interest rates on your Avanse Education loan.
The rate of interest on your loan is calculated as: Interest Rate = Avanse Base Rate +
Spread.
Our current Base Rate is 14.25% (WEF 01.05.2023).
The Spread is floating and is based on analysis of overall credit and course profiling.
This rate is subject to the terms and conditions of Avanse Financial Services Ltd.