Education loans in India are typically assessed based on the co-applicant's (parent's or guardian's) financial strength, not the student's. The bank statement requirement reflects this.
Documents required
Banks typically ask for 6 months of bank statements from the co-applicant (the person who will repay the loan). Self-employed co-applicants may need to provide 12 months. If both parents are employed, statements from the primary earner's salary account are most important.
What lenders check
The co-applicant needs to demonstrate income sufficient to cover the EMI after the moratorium period. For a Rs 15 lakh loan over 10 years at 10%, the EMI is about Rs 19,800. The co-applicant's net monthly income should ideally be 3 times that amount, or around Rs 60,000.
Collateral and its effect
Education loans above Rs 7.5 lakh typically require collateral. Collateral can be property, fixed deposits, or life insurance. Providing collateral reduces the scrutiny on income and bank statement requirements because the loan is secured.
Subsidized loans
Under the Central Scheme to provide Interest Subsidy (CSIS), students from economically weaker sections get interest subsidy during the moratorium. Bank statements are used to verify that annual family income is below Rs 4.5 lakh. Download an annual statement showing all credits to support this application.
Related reading: Bank Statement for Personal Loan Applications, Bank Statement for Home Loan, Bank Statement for Income Tax Return.