PAN Card Mandatory for Education Loan
Many students rely on education loans to fund their higher studies, as tuition fees at universities in India and abroad can be very high. While banks previously did not require a PAN (Permanent Account Number) card, most Indian banks now make it mandatory for students and their co-borrowers (parents/guardians) to submit a PAN card when applying for an education loan.
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Importance of PAN Card in Education Loans
Banks and NBFCs insist on a PAN card for the following reasons:
- Financial Transparency: PAN allows lenders to track financial transactions and prevent tax evasion.
- Credit History Check: It helps banks assess the credit score and repayment capacity of the co-applicant.
- Regulatory Compliance: PAN is required for reporting large-value loans to tax authorities.
- Loan Tracking: PAN enables proper documentation and monitoring throughout the loan tenure.
PAN Card Requirement Based on Loan Amount
- Loans up to ₹4 lakh: PAN card may not be compulsory, though some lenders still request it.
- Loans above ₹4 lakh: PAN card is generally mandatory as per banking and tax norms.
- Higher-value loans (₹7.5 lakh and above): PAN card is compulsory for both student and co-applicant in most cases.
Who Should Submit the PAN Card?
- Student Applicant: If the student has a PAN card, it should be submitted.
- Co-applicant (Parent/Guardian): The PAN card of the earning co-applicant is usually mandatory.
- Joint PAN Requirement: Some banks require PAN cards of both parties for faster approval.
What If the Student Does Not Have a PAN Card?
If the student does not have a PAN card, banks usually accept the co-applicant’s PAN card. However, the student may be asked to apply for a PAN card before loan disbursement. Applying early helps avoid unnecessary delays.
PAN Card for Tax Benefits
PAN card details are also essential to claim tax deductions under Section 80E of the Income Tax Act on the interest paid for education loans. Without PAN, claiming tax benefits can become difficult.
How to Apply for a PAN Card
Applying for a PAN card is simple and can be done:
- Online through the NSDL or UTIITSL websites
- Offline by visiting authorized PAN service centers
Once issued, the PAN card remains valid for a lifetime.
FAQs on PAN Card for Education Loan
- Is a PAN card mandatory for an education loan?
Yes, a PAN card is mandatory for most education loans, especially when the loan amount exceeds ₹4 lakh. It is required for identity verification and tax compliance.
- Whose PAN card is required for an education loan?
Usually, the PAN card of the co-applicant (parent/guardian) is mandatory. If the student has a PAN card, banks may ask for that as well, particularly for higher loan amounts.
- Can I apply for an education loan without a PAN card?
Some banks may accept the application without a PAN card initially, but PAN details must be submitted before loan approval or disbursement.
- Is a student’s PAN card compulsory?
No, a student’s PAN card is not always compulsory. However, having one can speed up the loan process and may be required for higher loan amounts.
- Is PAN card required for education loans below ₹4 lakh?
For loans below ₹4 lakh, PAN card may not be compulsory, but many lenders still request it for record and compliance purposes.
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