Question 1

What is FOIR, and why does it decide my education loan?

Accepted Answer

Fixed obligation to income ratio: the share of the co-applicant's monthly take-home pay already committed to EMIs, with the proposed education loan added on top. Lenders generally want the total under 60% and are comfortable below 40%. It causes more education loan rejections than the credit score does, and unlike the score you can work it out at home months before applying.

Question 2

Does my academic record decide the loan?

Accepted Answer

Far less than families expect. Marks and the university affect which scheme and which unsecured limit apply, but the file is underwritten on the co-applicant: their income, their existing EMIs, and their credit history. A strong student with a co-applicant already servicing two loans is a harder file than an average student with a clean one.

Question 3

What credit score does the co-applicant need?

Accepted Answer

At or above 700, most lenders will consider the file. Between 650 and 700, banks usually decline and NBFCs price the risk into the rate. Below 650, mainstream lenders rarely proceed however good the income looks. Each bureau gives one free report a year, so check it before applying rather than after.

Question 4

When is collateral actually required?

Accepted Answer

Under the model scheme, no tangible security is sought below ₹7,50,000, with parents as joint borrowers. Above it, public sector banks normally want security covering the loan. Unsecured schemes exist well beyond that at private banks and NBFCs, but they price two to three points higher, which on a large loan over ten years is a serious amount of money.

Question 5

What is margin money?

Accepted Answer

The share of the total cost the family funds rather than the loan, typically about 15% for an overseas course. It is due alongside the loan, not instead of it, and it catches families who budgeted for the full amount to be financed. Some NBFCs waive it and recover it through the interest rate.

Question 6

Does this tool tell me whether I will get the loan?

Accepted Answer

No, and be wary of anything that claims to. Every lender underwrites on its own policy and on documents no calculator can see, and two branches of the same bank can reach different answers. What this gives you is the reason a lender would decline, which is the part you can still do something about.

Why a lender would say no

The loan

The co-applicant

This is what would get it declined

Co-applicant obligations

Co-applicant credit score

Security

Margin money

Who could plausibly look at this file

Unlock your loan eligibility pre-check

Compare live bank rates

Can a graduate salary repay it?

Jeevithram Mamidala

Frequently Asked Questions

Where these thresholds come from

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