Education loan sanction letter

The education loan process in India is a long and daunting process as it involves multiple steps like fulfilling the eligibility criteria, documents, loan sanction, disbursement of the money, etc in order to finish the entire education loan process. After proceeding with these mundane formalities and undertaking the bank’s terms and conditions, you may understand a few intricacies of the education loan process.

After being eligible for the loan, then comes the part where you wait for your loan approval but many  do not understand the procedure, what is a sanction letter, what all it includes, etc. This article will dive into the education loan sanction letter and process in India and will answer all your questions regarding the same. 

Most of the time when students approach the banks directly they may run from one bank to another, asking bank managers to guide them through the loan process, and after experiencing a whole torment, they finally get their loan sanctioned from the bank. But the story doesn’t end there, you wait again for your money to be disbursed by the bank. So, if this whole process concerns you, do not worry about that. Our dedicated team of professionals will guide you through the entire education loan process and the whole procedure will be made simpler than ever. Under professional expertise, you will experience a much faster, smoother, and hassle-free loan journey. 

What is a sanction letter? 

A sanction letter is an official document provided by the lender which indicates the basic information about the education loan, such as the loan amount, borrower’s name, rate of interest, loan tenure, and other terms and conditions. It is proof that the borrower has successfully applied for and been granted the loan. 

After this, the borrower only has to request the disbursement of the loan amount. 

How and when will you get a sanction letter? 

The sanction letter is either sent by post or a hard copy is handed over to the borrower against acknowledgment. It is given once the loan is approved and sanctioned after the applicant has successfully submitted the loan application form and the required documents. 

However, there are some foreign universities that require the student to submit proof of their ability to pay for the education even before granting admission. The students further need to show proof of funds while applying for a student visa for countries like the USA, UK, Australia, and Germany. For example, to get a Canadian study permit, students have to submit proof of financial support, for which the minimum fund requirement is CAN$ 10,000.  

Without funds, students could not get the admission and student visa; and without the visa and the admission, students could not apply for the loan. And thus, a vicious cycle was created that was hard to break. 

A simple solution to counter this problem – Pre-Approved Education Loan Sanction Letters. 

What is a pre-approved sanction letter? 

As mentioned above, students can apply for the loan after securing admission to a university, following which the sanction letter is issued. Some lenders only agree to disburse the amount after the student has received the study permit and visa. 

A pre-approved sanction letter is a provisional sanction letter given to the borrower before they secure admission to a university. This letter can be used to prove financial support during the admission process and, for select countries, during the visa process as well. 
Students can apply for an instant education loan approval right after they receive their standardized test scores. However, this facility is available only with select lenders. For the rest, GyanDhan helps students with pre-visa disbursement by approaching the concerned bank official. 

What are the documents required for a sanction letter? 

The documents required to get a sanction letter vary depending on the type of lender. They are submitted with the initial loan application. A generalized list of documents is as follows – 

Documents required from the applicant – 

  1. Loan application form filled completely and correctly.
  2. Identity proof – PAN Card, Passport, Voter ID card. 
  3. Address proof – a recent copy of telephone bill, electricity bill, or water bill. 
  4. Passport 
  5. Past academic record – 10th, 12th, undergraduate mark sheet, test scores of entrance tests like GRE, TOEFL, IELTS, etc. 
  6. Proof of admission – students can submit a conditional offer of admission as well. 
  7. Statement of expenses – the entire cost of education. 
  8. Passport-size photographs 
  9. Loan account statement of one year, if there are any previous loans taken from any lender. 

Documents required from the co-applicant –

  1. Identity proof 
  2. Address proof 
  3. Income proof – the documents for the same will differ depending on the type of employment, such as self-employed or salaried.

 Self-employed co-applicants 

  • Business address proof 
  • Last 2 year’s IT returns 
  • TDS Certificate 
  • Certificate of Qualification 
  • Bank account statement of the last 6 months 

Salaried co-applicants 

  • Salary slips of last 3 months 
  • Copy of Form 16 for the last 2 years or copy of IT Returns for the last 2 years.
  • Bank account statement of the last 6 months. 

The applicant will have to submit collateral documents along with the above-mentioned documents, in case the student has applied for a secured education loan. 

What is the sanction process of public sector banks? 

The sanction process in public sector banks is slightly lengthy, probably to balance the benefits of the excellent study abroad loan products. The process may take up to a month, though the same process with GyanDhan is reduced to 14 days. 

The process to receive the sanction letter is in three steps – 

  • The process in banks, like State Bank of India and Bank of Baroda, starts with filling up the application form. 
  • The applicant will have to submit the documents that are mentioned above and some additional documents that may be case-specific. 
  • Once the application is processed and accepted by the bank, the sanction letter is sent to the applicant. 

Note- Public banks give out secured education loans for an amount above INR 7.5 lakhs. Therefore, the applicant will have to submit original collateral documents along with the loan application form for loan approval. 
You can read about the SBI Education loan process and SBI Education Loan sanction letter here. Read about the Bank of Baroda Education loan sanction letter here. 

What is the sanction process of private banks? 

The education loan sanction letter for private banks, like Axis Bank and ICICI Bank, is as follows – 

Axis Bank 

  • Apply for the loan on GyanDhan’s portal and fill up the loan application form. 
  • You can upload the documents online on the GyanDhan portal or you can request the doorstep-document pick-up service. This step will be easier as we provide a customized checklist of documents. 
  • The bank will verify the documents and send the application for further process. Meanwhile, you will have to pay the processing fee charged by the lender. For a loan amount up to INR 20 lakhs, the processing fee is refundable. If the loan amount is above INR 20 lakhs, you will have to pay 0.75% of the differential loan amount above INR 20 lakhs + GST. 
  • Since it is an unsecured education loan, the bank will evaluate and verify the credit history of the applicant and the co-applicant. 
  • Once the loan is approved, the Axis Bank education loan sanction letter is issued in a day.

Read about the rest of the Axis bank education loan process here.


  • The ICICI bank education loan process is similar to the Axis Bank – starting with the loan application form and document submission, after which the students will receive their sanction letter. 
  • However, ICICI Bank also provides an Instant education loan with an instant sanction letter. The sanction letter is used as proof of funds at various steps of the process, therefore, students can get an instant sanction letter by pledging Fixed Deposit with the bank.
  • The loan is pre-approved and the sanction letter is electronically sent to the registered email address. 

Read about the rest of the ICICI Bank education loan process here.    

What is the sanction process of Non-Banking Finance Companies? 

Non-Banking Finance Companies (NBFCs) have the easiest and the fastest education loan process. It starts with filling up the loan application, submitting the required documents, and ends with a sanction letter in a day. 
For example – 

  • HDFC Credila education loan sanction letter is issued in a day after the applicant successfully pays the processing fees. On request, HDFC Credila can also issue the letter before the student secured admission to a university. R
  • Avanse issues an in-principle approval through a loan letter after the documents and other financial details have been verified. Moreover, Avanse offers five different types of education loans  – Pre-Admission loans, Pre-Visa loans, Bridge loans, Fast-track loans, and the Certificate of Availability of Funds to help students financially at every step.
  • In an almost synonymous manner, Auxilo and InCred also offer Pre-admission education loan sanction letters to students. Auxilo takes approximately 2-3 days to process the loan application and another day to send the sanction letter. You can read about the rest of the process here.
  • InCred takes approximately 5 days to verify and issue the sanction letter. Students will have to pay the processing fee on receiving the provisional loan approval. Read about the process here.
  1. A conditional confirmation letter if an I-20 is required from the school. 
  2. A confirmation letter when applying for the student visa. 

The letters are available on the dashboard of the applicant’s account.
The rest of the Prodigy Finance Education Loan process is available here

Now you know the specifics of a sanction letter and an education loan.

How can National info help you with your education loan? 

We equip students with the right information. Moreover, National Info has been working with Indian and international lenders for quite some time now and understands the nuances of the process. We will help you at every step of the process and make it infinitely easier for you to fund your education. All you have to do is check your loan eligibility, and a dedicated Education Loan Counselor will discuss various loan options available to you.

Once you have settled on a lender, you can complete the entire process from the comfort of your home. The loan process that usually takes more than a month, will be done and dusted in a maximum of two weeks. 

We know how expensive abroad education is, and therefore, do not charge anything from the students. National Info is the help you need! So, check your loan eligibility and apply for the loan now.  

Sample Sanction Letter

Date: 1/31/2020
Ron Smith
No 123 First Street
City, Country 123123
Dear Sir/Madam,
Subject: Education Loan Sanction Letter
Ref: Application No. A123456789
This has reference to your above referred application for and Education Loan (“Loan”) for funding higher studies of Ron Smith at an accredited institution in the United States, starting Fall/Spring 2020. Based on the details provided by you vide your said application, ABC Financial Services is pleased to inform you
about sanction of an education loan on the terms and conditions mentioned below:

  • Loan Amount: INR 5,000,000 equivalent to USD $68,271 approximate at exchange rate of 1 USD:73.25 INR
  • Dan Smith would assume responsibility as the co-borrower to the loan and Jill Smith would assume as additional co-borrower.
  • Floating Rate of interest applicable to the loan would be as per the market conditions prevalent at the time of disbursement.
  • Payment Mode: ECS & PDCs to be through Ron Smith, ABC BANK LIMTED, CITY, AC#123123123
  • Insurance to be taken by the Applicant and duly assigned in favor of ABC Financial Services
  • Validity of this offer: This sanction/offer letter will automatically stand withdrawn if the
    disbursement is not availed of within 30th September 2020 from the date issue of this sanction

Disbursement of the loan will be only upon successfully fulfilling the conditions as mentioned below:

  • Applicant receiving valid US Visa from appropriate authorities.

For ABC Financial Services
Authorized Signatory