Thinking of getting an Education loan for yourself or your kids, then you have to read this article for knowing the importance of PAN card, while you are applying for Education loan. Now let us get an idea on what is a PAN Card and Education Loan.
PAN card is an acronym of Permanent Account Number, which is issued to an individual by the Income tax department of India, so that they can pay the income tax to the government and file for income tax returns each year. With the help of this card, individual’s can also track their financial records through online. This PAN card consists of a unique 10-digit alphanumeric code, where each and every digit has a unique significance. This PAN card can also be used as a photo identification proof, while booking tickets or applying for loan, etc. It is compulsory to attach this PAN card with our bank account. While we are performing high value transactions in banks, it is necessary that we are mentioning our PAN card details.
Education loan, also commonly known as Student loan is a type of loan issued by the bank to the students, so that they can pursue with their college education. This loan includes tuition fees of the candidate, books, supplies and other living expenses. The interest rate for this loan is typically low, compared to other loans. However, this loan is issued to students only if they have cleared their secondary education with merit grade. All banks across India, avails student or Education loan, however the interest rate may vary.
PAN Card Compulsory for Education Loan:
Getting a good education is a blessing in today’s world. However, some students who have secured good scores in their higher education, is not able to pursue their college, due to financial situations. In such cases, these students can approach any bank with their certificates and avail Education loan. Earlier, when students apply for education loan, they were not asked to submit their PAN card. Nowadays, most Indian banks are requesting their students to submit their PAN card for verification, as well. Both students and their guardian or parents or co-borrowers, should also submit the PAN card as a document of proof.
Why PAN Card is Compulsory?
- Income Details can be Easily Accessed:
PAN card is an essential document, when we are opening a bank account in any Indian bank. Government has made it mandatory for submitting the PAN card, while applying for Education loan, so that the person who applies for loan, be it Parents, Co-borrower or Guardian, will not be able to provide wrong income details, since the income can be easily accessed by the bank employees and get the knowledge about their financial status.
- Tracing of Defaulters can be Easy:
Nowadays, many people are applying for Education loan, since the fees in the Education institution are high. However, after completing their education, they are ignoring the loan and they tend to get on with their lives. In order to avoid such situations, all Indian banks have decided to collect their PAN information. With the help of the PAN details, banks can easily track the defaulters and they will also pay their debt, they owe to the bank.
- Education Loan reaches the Deserved Students:
When the PAN card is submitted to the bank with the correct income and financial situation, it is easier for banks to identify the students with best score and poor financial background and provide loan. The students with good financial background, can be considered in the second priority basis.
Introducing this system will reduce the number of loan defaulters, since it is difficult for them to open a new account without providing PAN details and it is also difficult for them to apply for another loan, without paying this education loan.