Loan Documents 101

. Wednesday, April 8, 2009

Good news after quite a bit of wait. I have received my loan sanctioned and have applied for my visa. Often, getting the loan documents in place can take much more time than you can imagine.  

In my case, it took 3 weeks from the time of submission. I had applied to the Corporation Bank of India for their education loan. 

Outlined below is the list of documents that one must have in place for applying for a loan in any bank in India. This list might vary from bank to bank, but what I have listed is a possible list of ALL documents that one might need:

1. 2-4 copies of passport size photograph
2. Proof of Identity (passport/PAN card/Driving license etc.)
3. Proof residence (electricity/telephone bill/ration card)
4. Statement of Bank A/c for last six months
5. Exiting loan statement for last six months.
6. Signature verification from the Banker
7. Income Tax Return for last two years (with form 16 for salary person)
8. Balance Sheet for last three years.
9.Last three months salary slips.
10. Details of fund available from family sources for the course.(attach Xerox copies)
11. Statement of Assets & Liabilities.
12 Career Profile/Employment details of the 10 years
13.Sales Tax Registration, Shop Establishment Act Certificate etc.(for Businessman) 

1. Agreement to sale with Builder if first owner
2. Agreement to sale with previous owner if flat is resale. All previous agreement to sale upto first owner & builder.
3. Registration certificate of society.
4. conveyance deed between building society.
5. NOC from society.
6. Share Certificate of society.
7. Latest maintenace charges bill.

1. Two / Four copies of passport size photograph
2. Proof of Identity (passport/PAN card/Driving license/College ID Card etc.)
3. Proof residence (electricity/telephone bill/ration card)
4. Statement of marks: SSC, HSC, FY, SY, TY, Final year  of Degree
5. Degree certificate Graduation, Post Graduation, Diploma
6.Statement of extra curricular activites
7. Copies of letter conferring scolarship, freeship, studentship etc.
8. Documet evidencing the duration of the course & commencement thereof Viz Prospectus or certificate from the competent authority of the institution.
9. Proof of admission to the course (I-20)
10. Schedule of expenses for the course.
11. Copy of the mark sheet of qualifying examinationViz. CAT,TOEFL,GRE,ILTS etc.
12. Statement of Bank A/c for last 12 months through which major transactions are routed (if employed)
13. Signature verification from the banker (if employed)
14. A declaration/ an affidavit confirming that n loans are availed from other banker(if employed )
15. Letter giving reasons if in case of gap in the course of education. 
16. Letter indicating that you have officially resigned from your job.
17. In case of any personal loans, a letter indicating your payment schedule, amount to be repaid and expected months of repayment.

I understand that this list can be quite daunting. Again, this is a comprehensive list of ALL documents I was asked to furnish by most banks. I approached as many as 4 banks (3 nationalized and 1 private banks). Since a loan is almost mandatory for an international education, I would recommend that an MBA aspirant works on getting these documents in place as soon as he/she has applied to a school, rather than wait for the result, and then applying for the loan. Once the documents are in place, upon receipt of the admission offer, the candidate can make his loan processing much easier. In my case, I had exactly 2 months from the time of receiving an admission offer to the course start. Within this space I had to make a decision, apply for loan, visa and book tickets. This can be extremely hectic. 

Lesson learnt was it is never too early to get your documents in place. On the contrary, it would be wise to do so.