Business Loan for Schools

The quality of education in India has deteriorated in recent years, resulting in fewer employment opportunities. Inequalities in the job market are the main cause of unemployment due to high dropout, but poor level of education has also added to the lack of necessary skills in the job market.

This shows that the Indian education system needs an improvement to create skills, with better infrastructure, quality teachers, sports facilities etc., which will enhance the overall personality needed for the job market. To meet the need of quality education, schools are now getting business loans, which enables better learning.

What are the benefits of getting a school loan?

– The loan is processed quickly: few documents are required to take a loan.
– Unsecured funding: opportunity to get funds without any guarantee
Funds are also available for school related expenses such as hiring facility, furniture replacement or to fix infrastructure.
– Line of Credit Facility: This facility enables withdrawal and repayment of money as per their convenience. Interest is charged only on the amount used by him.

What is the eligibility for a school loan?

– The school has completed at least as much time as the lender needs.
– School up to date in tax return filing.
– Schools that are run by trusts, societies, private / public limited companies, they can apply for loans.
– Promoters / Trustees or related person should have status in the society.
– The property on which the school is or should be built should be its own.
– In some cases the existing school building is mortgaged.

What documents are required for a school loan?

-KYC documents
-App form
– Last year’s school statement
-Face structure of all current students in the school
– PAN Card of the applicants (Trust / Society Members)
– Copy of school affiliation certificates
– Copy of Society / Trust Registration Certificate
– Other documents of the Society / Trust as per law


LenderInterest RateProcessing FeePart Payment charges


Reliance MoneyAs per lender’s discretion1%5%As per lender’s discretion
ISFCAs per lender’s discretionAs per lender’s discretionAs per lender’s discretionNil
Bajaj Finserv18% p.a.Up to 3% of the loan amount2% of the part payment amount4%
Bank of BarodaCompetitive Pricing Linked to tenor based MCLR
Abhyudaya cooperative bank ltd12% p.a.Service charge applicableThe information available by emailing them on loans@abhyudayabank.netThe information available by emailing them on

Note: The fees mentioned above may be different from the applicable tax.

Interest rates also depend on various factors such as the future cash inflow of the school, loan repayment history, loan amount request and the loan tenure chosen.

When the loan is processed, processing fees and documents are charged. During the tenure of the loan, other charges and penalties are check swap, change in EMI cycle, check bounce, EMI overdue charge etc.

It is important to note that the loan can be repaid through National Automatic Clearing House (NACH), Electronic Clearing System (ECS) and post dated check.

When can I get the amount after the loan is approved?

There are some eligibility criteria’s and guidelines for every lender’s applicants. Therefore, the number of days that every financial institution takes depends on their rules and procedures. It takes 8 to 72 days to get the loan amount.

These financial institutions and NBFC disburse school loans directly to the school account. Now many more banks are also trying to find out the untapped market of education loans for schools. Some believe that schools charge annual fees at one time, which puts a lot of financial burden on the parents. Therefore, by providing school loans, efforts are being made to reduce the burden of education on the parents.

Since education loan is available for students, the demand for quality education for children is increasing from parents. Therefore schools will have to upgrade themselves from time to time so that they can provide good education and later they can fight the burden of examinations of life.

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