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  Education Loan


SBI Education Loan

Overview:

State Bank of India is an Indian multinational financial services company that was founded in 1921. State Bank of India has an operational presence of over 14,000 branches in India serving millions of happy customers. The bank has a much diversified portfolio that includes services in personal banking, business banking and international banking services.
SBI Education Loan is of three categories – for studies in India and abroad, for studies in premier Indian institutions and loan for pursuing vocational education and training.

Features of SBI Education Loan:

Purpose:

SBI Student Loan scheme is offered to Indian nations for pursuing higher studies in India or at a foreign institution. SBI Scholar Loan scheme is offered to students who have secured admissions in premier Indian institutions. A separate loan scheme is offered for pursuing vocational education and training in India.

Expenses Considered for SBI Education Loan:

The following expenses are covered for both the student loan scheme and loan for vocational education.

  • Tuition and course fee
  • Examination, library and laboratory fees
  • Caution deposit
  • Cost of books, equipment and other instruments.

The following expenses are considered only for the student loan scheme and not for the vocational training loan.

  • Cost of a two wheeler up to Rs.50,000
  • Travel expenses and passage money for abroad studies
  • Caution deposit, building fund and other refundable deposit which amounts up to 10% of the tuition fees for the entire semester
  • Any other expenses required to complete the coursework like study tours, thesis, project etc.

Amount of Education Loan:

  • SBI Student Loan Scheme
    A maximum of Rs.10 lakhs is offered for studies in India. For studies abroad, a maximum of Rs.30 lakhs is offered as loan.
  • SBI Scholar Loan Scheme

Category of the educational institutionMaximum Loan Limit
Without SecurityWith Security
List AARs.30 LakhsNA
List ARa.20 lakhsRs.30 lakhs
List BRs.20 lakhsNA
List cRs.7.5 lakhsRs.30 lakhs

Loan Scheme for Vocational Education and Training For courses of period up to 6 months, loans up to Rs. 50,000 are provided. A maximum of Rs.1 lakh is provided as loan for courses of duration above 6 months

Interest Rates:

SBI Student Loan Scheme

Loan AmountRate of Interest
Up to Rs.4 lakhs3.50% above base rate
Above Rs.4 lakhs and up to Rs.7.5 lakhs3.75% above base rate
Above Rs.7.50 lakhs1.75% above base rat

The base rate is fixed at 9.85%. Do make an enquiry with the bank about the prevailing base rates. A concession of 0.50% is provided for girl students and a 1% concession is offered for full tenure of loan, if the interest is serviced promptly during moratorium and course period.
SBI Scholar Loan scheme

Type of InstitutionInterest Rate per annum
List AA25 bps above base rate (10.10% at present)
List A25 bps above base rate (10.10% at present)
List BFor unsecured loan up to Rs.20 lakhs, 50 bps above base rate (10.35% at present)
List C175 bps above base rate (11.60% at present)

For list B institutions, the interest rate is 25 bps if the collateral security provided is equal to or greater than the loan amount or if the applicant’s work experience is greater than two years. Do contact the bank for a comprehensive classification of the educational institutions as per the type AA, A, B or C.

SBI Loan for Vocational Education and Training
The rate of interest is fixed at 3.50% above the base rate of 9.85%

Processing Fee:

No processing fee is charged for SBI education loans.

Repayment Tenure:

SBI Student Loans

Maximum Loan AmountRepayment Period
Up to Rs.4 lakhsUp to 10 years
Above Rs.4 lakhs to up to Rs.7.5 lakhsUp to 10 years
Above Rs.7.5 lakhsUp to 12 years

SBI Scholar Education Loan
The maximum repayment tenure is 12 years. The repayment period starts after 6 months of course completion.
SBI Loan for Vocational Education and Training
For courses of duration up to 1 year, the repayment period can be up to 3 years. For courses of duration above 1 year, the repayment period can extend up to 5 years.

Security:

SBI Student Education Loan

Loan AmountSecurity
Up to Rs.4 lakhParent or guardian as co-borrower
Above Rs.4 lakhs and to Rs.7.50 lakhsParent or guardian as co-borrower and collateral security in the form of a third party guarantee
Above Rs.7.50 lakhsParent or guardian as co-borrower and tangible collateral security

SBI Scholar Loan Scheme
Tangible collateral security of full value is to be provided and parent or guardian should sign up as co-borrower only to avail extra loan amount for list A and list C institutions. Loans can be availed without security also under the scholar scheme.
SBI Loan for Vocational Education and Training

No collateral or third party guarantee is taken. But, parents or guardian will have to execute the loan documents as co-borrower

Margin:
For SBI Student Loan Scheme, there is no margin for loans up to Rs.4 lakhs. For loans above Rs.4 lakhs, the margin is 5% for studies in India and 15% for studies abroad.

Eligible Courses:

  • SBI Student Education Loan
    For studies in India, graduation and post-graduation technical courses (degree and diploma) conducted by colleges approved by UGC, AICTE, IMC and the government of India are covered. Also, teacher training, nursing courses and other diploma courses like pilot training, shipping etc. as approved by the concerned regulatory authority are covered under the loan. For studies abroad, job-oriented professional graduate and post-graduate courses like MCA, MBA, MS, courses conducted by CIMA – London, CPA – USA are approved for loan.
  • SBI Scholar Loan Scheme
    Regular full-time degree and diploma courses for which the student is granted an admission through merit based admission process or entrance test is covered under the loan. Also, full time executive management courses like PGPX are approved for loan.
  • SBI Vocational Education and Training Loan
  • Vocational courses and skill development courses of duration 2 months to 3 years run by a government department or an organization supported by National Skill Development Corporation leading to a recognized Government organization are approved for the loan

List of Approved Educational Institutions:

The following documents are to be submitted to complete the application process.

  • For the SBI Student Scheme, educational institutions in India recognized by UGC/AICTE/IMC and government of India are approved. Reputed foreign institutions abroad, CIMA and CPA courses are also approved for loan.
  • SBI Scholar Loan scheme is provided for education in 93 premier Indian institutions. Contact the bank for the list of institutions that fall under the elite category.
  • Vocational, skill development courses offered by the government or an organization certified by the government is approved for loan under the SBI Vocational Education and training loan category.

Documentation required:

  • Letter of admission
  • Duly filled and signed loan application form
  • 2 recent passport size photographs
  • Statement of cost of study
  • PAN Card, AADHAR card of student and parent/guardian
  • Proof of identity and proof of residence
  • IT returns or IT assessment order of previous two years of the co-borrower
  • Statement of assets and liabilities of parent/guardian
  • Proof of income of parent/guardian

Eligibility:

The applicant should be an Indian national and should have secured an admission in a recognized educational institution. For SBI Scholar scheme, the student should have secured an admission in one of the 93 premier Indian institutions. Similarly, for Vocational Education loan, the student should have obtained an admission in a government certified training institute.

Central Government Interest Subsidy Scheme for Educational Loans:

The interest subsidy scheme has been announced by the MOHRD for providing interest on educational loans during moratorium for professional courses in India for students from economically weaker sections with gross annual parental income up to Rs.4.50 lakhs.
Some of the important features of this scheme are listed below.

  • This scheme is applicable only for recognized technical and professional course study in India.
  • The subsidy is provided for a period of 12 months after completion of course or six months after getting the job, whichever is earlier.
  • The interest subsidy is not available to students who discontinue the course mid-stream or who are expelled from the university.
  • The disbursement of interest subsidy claims to banks will be on half-yearly or yearly basis.

SBI Education Loan FAQs:

1.What documents do I have to submit to avail the interest subsidy?
In addition to the necessary loan documents, an income certificate issued by Income Certifying Authority designated by the State Government is required.

2.Can my spouse sign up as a co-applicant for my education loan?
Yes. Married applicants can designate their spouse as co-applicant.

3.How will the SBI education loan be disbursed?
The loan amount will be disbursed directly to the educational institution or the vendor as and when there is requirement.

4.What educational documents do I have to submit during application?
You might be asked to submit the HSC and SSLC certificates in addition to the degree mark sheet.

5.Is insurance cover necessary for SBI education loan?
Yes. Insurance covering the life of the borrower with the policy assigned in favour of SBI is mandatory while applying for education loan.

HDFC Bank Education Loan

Overview:
Set up as a private sector bank in 1994, the Housing Development Finance Corporation Limited (HDFC) offers tailor made education loan products catering to students applying for admissions in India and abroad. HDFC promises complete transparency to customers while sanctioning an education loan. As a market leader in retail loan products, HDFC provides education loans with fast disbursements, easy documentation and higher loan amounts with competitive rates and charges. Students can benefit immensely with a HDFC education loan as it covers all major expenses incurred during the tenure of a course.

Feature and Benefits of the HDFC Educational Loan

HDFC offers students an opportunity to follow their dreams and pursue a course of study of their choice with comprehensive education loan products. HDFC education loans can be availed with preferential interest rates for financing admissions in premier institutions in India and abroad with doorstep service for borrowers. Borrowers are also entitled to tax rebates for the interests they will pay on education loans under Section 80-E of the Income Tax Act 1961.
HDFC Bank education loans are available in two variants - i) Education Loan for Indian Education and ii) Education Loan for Foreign Education

Education Loan for Studies in India

Students aspiring to seek admission in top institutions recognized by UGC, AICTE, AIBMS or ICMR and in disciplines of their choice can do so without any hassles as HDFC presents a top-notch financial solution with multiple benefits. Offering faster loan processing with easy documentation, HDFC education loans are customized as per the applicant’s requirements.
HDFC Bank sanctions education loans up to Rs. 10 lakhs for studies in India.

  • No collateral is required to be submitted as security for loans up to Rs. 7.5 lakhs. Any loan amount exceeding that would require a collateral security in the form of residential properties, HDFC Bank Fixed Deposit, LIC, NSC or a KVP policy.
  • Borrowers availing loans up to Rs 7.5 lakhs can extend their repayment tenures up to 10 years and for loan amounts above Rs 7.5 lakhs the tenure can be chosen up to 15 years, after the moratorium period.
  • Applicants are not required to bring in any margin amount for loans up to Rs 4 lakhs but for loans above Rs 4 lakh, a margin of 5% is required.
  • Customers need to pay up to 1% of the loan amount as processing fees.
  • If the education loan is pre-closed during the moratorium period then up to 4% of the outstanding balance has to be paid as prepayment charges. If the loan is foreclosed after the expiry of the moratorium period, no prepayment penalty will be levied.
  • Along with the tuition fees, a HDFC education loan also covers examination fees, lab fees, caution deposit, building fund, books and equipment fees and other travel expenses.
  • HDFC education loans taken for studies in India will be disbursed directly to the institution as per the given fee structure
  • HDFC also provides an additional benefit of life insurance coverage for a student under the Insurance Protection - Credit Protect scheme from HDFC LIFE.
  • Borrowers and co-borrowers will be required to sign a loan agreement with HDFC after the education loan is sanctioned. Additional stamp duty has to be borne by the borrower. The applicant has to determine the mode of repayment for the loan in the form of ECS debits with 3 PDCs as security, standing instructions or as post-dated cheques.
No Due Certificate / No Objection CertificateNil
Duplicate of No Dues Certificate/NOCNil
Solvency CertificateNot applicable
Charges for late payment of EMI2 % per EMI plus taxes
Credit Assessment ChargesNot applicable
Nonstandard Repayment ChargesNot applicable
Cheque Swapping ChargesUp to Rs.500/- per instance plus taxes
Cheque Bouncing ChargesUp to Rs. 400/- per bouncing
Legal / Incidental ChargesAt actual
Stamp Duty & other Statutory ChargesAs per applicable laws
Loan Cancellation Charges1% of the unveiled sanctioned loan amount plus taxes

Eligible Courses:

Graduation and Post-graduation courses with any of the following disciplines -

  • Management
  • Engineering (graduation only)
  • Medicine
  • Architecture
  • Hotel and Hospitality
  • Agriculture
  • Pure Science
  • MCA / MCM

Documentation required:

Education Loan for Studies in India:
Academic:

1. Admission Letter with Fee break-up
2.SSLC, HSC Graduation Mark sheets

Income Documents:
Salaried:

1.Last 2 pay slips with date of joining
2. 6 months' bank statements

Self-employed:

1.Last 2 years' ITR
2.Last 2 years' Audited Balance Sheet
3.6 months' bank statements
4.Proof of Turnover

Self-employed Professional:

1.Last 2 years' ITR
2.Last 2 years' Audited Balance Sheet & P/L
3.6 months' bank statements
4.Proof of Qualification

Other Documents:

1.Age Proof
2.Signature Proof
3.Identity Proof
4.Residence Proof

5.Duly Filled-in Application Form 6.Photograph

Education Loan for Foreign Education:
Academic:

1.Admission Letter with Fee break-up
2.I-20 form for US applicants
3.CAS letter for UK applicants
4.SSLC, HSC Graduation Mark sheets
5.GRE/GMAT/ TOEFL /IELTS Mark sheets

Income Documents:
Salaried:

1.Last 3 payslips with date of joining
2.6 months' bank statements
3.Form 16 for the previous year along with ITR

Self-employed
1.Last 2 years' ITR
2.Last 2 years' Audited Balance Sheet
3.8 months' bank statements
4.Proof of Turnover

Self-employed Professional:
1.Last 2 years' ITR
2.Last 2 years' Audited Balance Sheet & P/L
3.8 months' bank statements
4.Proof of Qualification

Other Documents:
1.Age Proof
2.Signature Proof
3.Identity Proof
4.Residence Proof
5.Signature Proof - PAN Card/Passport for signature verification of the applicant and co-applicant / Credila’s completed signature authentication form / 10th or 12th Mark sheet with signature for students below 21 years.
6.Duly Filled-in Application Form
7.Photograph

Documents for subsequent disbursements:

1.Subsequent Disbursement Request Letter from the Applicant and Co-Applicant
2.University Fee Demand Letter
3.Applicant's Academic Progress Report for the previous semester
4.Revised Repayment Instructions

Eligibility

1.All applicants must be Indian nationals and aged between 16 to 35 years.
2.Co-applicants are mandatory for full-time courses in India and abroad. The co-applicant should be a member of the immediate family.

Central Government Interest Subsidy Scheme for HDFC Bank Education Loans:

The interest subsidy scheme for education loans has been introduced by the HRD Ministry to financially support students applying for admissions from economically weaker sections with a gross income of up to Rs 4.5 lakhs. Students can apply for the subsidy benefit with the following documents - Original income certificate, Interest Subsidy Agreement and an original Bonifide student letter from the institution. Additional charges like stamp duty and franking charges have to be borne by the applicant. The interest rate subsidy scheme is applicable only for admissions to approved technical and professional courses from recognized institutes after the completion of Class 12. A full interest subsidy benefit is available for the moratorium period.

HDFC Bank Education Loan FAQs:

1.Does HDFC provide a moratorium or holiday period for an education loan?
Yes, HDFC offers a moratorium period including the study period plus 1 year or 6 months after the student is employed, whichever is earlier.

2.Is the moratorium period for HDFC education loans available for all types of courses?
The repayment holiday will be applicable only for select courses and it is at the discretion of the bank. Is the student required to make any form of repayment during the moratorium period of a HDFC education loan? Applicants have the option of servicing the interest during this period, if they choose to do so.

3.How does a student consider himself eligible for a HDFC education loan for studies abroad?
Indian citizens who have secured admission to a professional or technical course in any reputed university abroad are eligible for a HDFC education loan.

4.Why is it important to get an education loan sanctioned from HDFC before getting an admission?
HDFC advises students to get a loan sanction before an admission as this will improve their chances of acceptance at universities across the globe. With hassle-free loan processing, students also have the option of showing their definite source of funds while applying for a Visa or for admissions to various colleges. DISCLAIMER: Information contained and transmitted by this email including any attachment is proprietary to BankBazaar.com and is intended solely for the addressee/s, and may contain information that is privileged, confidential or exempt from disclosure under applicable law. Access to this e-mail and/or to the attachment by anyone else is unauthorized. If this is a forwarded message, the content and the views expressed in this email may not reflect those of BankBazaar.com. If you are not the intended recipient, an agent of the intended recipient or a person responsible for delivering the information to the named recipient, you are notified that any use, distribution, transmission, printing, copying or dissemination of this information in any way or in any manner is strictly prohibited.

South Indian Bank Education Loan

Overview:
South Indian Bank is one of the leading banks with 823 branches spread all across India. The bank provides education loan which helps the students to pay the upfront amount required while admission to any college like tuition fees, hostel charges etc. Students can avail loans to pursue any discipline of their choice in India and abroad. South Indian Bank education loans are categorised under three schemes:

1.Vitjnan Pradhan Scheme
2.SIB-Excellence
3.Vidyanidhi Scheme

Purpose of loan:

Students can not only pay their college and hostel fees, but can also use the loan amount provided by South Indian Bank to pay their library charges, laboratory and examination fees. They can use the loan amount to purchase instruments, books, equipment etc. required during the course of their study. Costs such as caution deposit, travel and other essentials are covered by the loan. Students can also use the education loan for project work, thesis and study tours.

Vitjnan Pradhan Scheme:

South Indian Bank Vitjnan Pradhan Scheme provides education loan for students pursuing higher studies in India and abroad.

Minimum margin:
. Up to Rs. 4 lakh – Nil
. Above Rs. 4 lakh – 5% for studies in India and 15% for studies in foreign countries

Security:
For a loan of up to Rs. 4 lakh, no security is required but parents need to be co-obligators when the student applies for the education loan. For loans above Rs. 4 lakh and up to Rs. 7.5 lakh, parents or guardians of the student need to provide collateral security in the form of third party guarantee. For a loan amount above a loan amount of Rs. 7.50 lakh, parents or guardians need to provide collateral security and assign future income of the student for payment of the education loan instalments.

Penalty:
There is a penalty of 2% charged on loans above Rs. 2 lakh for the overdue period and amount.

SIB-Excellence:

South Indian Bank-Excellence provides education loans to students pursuing higher studies in top educational institutions in India like IIMs, IITs, etc.

Amount of loan:
A maximum amount of Rs. 10 lakh can be availed through SIB-Excellence education loan scheme.

Margin:
Up to an amount of Rs. 4 lakh the margin is nil. However, there is a 5% margin for an education loan amount above Rs. 4 lakh. Scholarships and assistantships can be incorporated in the margin.

Mode of payment:
It is preferable to make the payments directly to the institutions, hostel, etc. through Real Time Gross Settlement (RTGS) systems.

Security:
Parents or guardians can provide life insurance policy in the form of guarantee, which must be equal to the loan amount. The life insurance policy should be assigned in the name of South Indian Bank.

Repayment:
The repayment starts after six months of employment or one year after the completion of the course, whichever is earlier. The education loan is to be paid in sixty equated monthly instalments (EMI). There is no penalty charged for repayment of the education loan amount.

Vidyanidhi Scheme:

Vidyanidhi scheme under South Indian Bank education loan system is extremely helpful for students seeking higher education in the renowned institutes of Kerala. This education loan scheme helps the students to pay the refundable deposit charged by an educational institution.

Rate of interest charged by South Indian Bank education loan:

Loan amount up to Rs. 4 lakhBase rate + 5.80%
Loan amount more than Rs. 4 lakhBase rate + 6.30%
Vidyanidhi loan schemeBase rate + 5.20%
SIB-Excellence up to Rs. 10 lakhBase rate + 1.10%
SIB-Excellence above Rs. 10 lakhBase rate + 2.10%

Base rate is 10.20%

Eligibility and Documentation:

All students applying for South Indian Bank education loan schemes must be residents of India. They should provide all education certificates starting from matriculation to their latest qualifications. Along with these, students must provide results of qualifying entrance examinations held by different educational institutions.

South Indian Bank education loan FAQs:

What is the minimum margin for an education loan amount of Rs. 4 lakh provided by South Indian Bank?
There is no margin for a loan amount up to Rs. 4 lakh provided by South Indian Bank.

What is the maximum amount of loan that can be availed through SIB-Excellence education loan scheme?
A maximum amount of Rs. 10 lakh can be availed through SIB-Excellence education loan scheme.

What is the preferable mode of payment to colleges under SIB-Excellence Scheme?
The preferable mode of payment to colleges under SIB-Excellence Scheme is through Real Time Gross Settlement (RTGS) systems.

What is the repayment schedule for South Indian Bank education loan?
The repayment starts after one year of the completion of the course or six months of employment, whichever is earlier.

What is the maximum tenure that can be availed to repay the education loan?
Maximum of 15 years can be availed to repay South Indian Bank education loan amount.

Axis Bank Education Loan

Overview:
Axis Bank was founded in 1994 as UTI Bank. Axis Bank is India’s third largest private sector bank and provides a wide range of financial services that include personal loans, business loans and asset management. Axis Bank’s education loan is offered to students who have secured admissions to professional courses at graduate or post-graduate levels. A flexible loan scheme with affordable interest rates, Axis Bank Education Loans will provide the required monetary support to deserving students.

Features and Benefits of Axis Bank Education Loan:

Axis Bank Education Loan is offered to students who are admitted to career-oriented courses like medicine, engineering and management. The various benefits and features of the loan scheme are described below.

Expenses considered for Axis Bank Education Loan
The education loan will cover the tuition fees, hostel charges, cost of study materials and other education related expenses.

Amount of Education Loan
For studies in India, the maximum quantum of finance offered is Rs.10 lakhs. The maximum loan amount for studies abroad is Rs.20 lakhs. The minimum amount of education loan is fixed at Rs. 50,000.Interest Rates The interest rates depend on the loan amount and tenure. Also, if the education loan is availed by a woman, the interest rates are lower.

Interest Rates

Loan Type Loan Amount Interest Rates
Education Loan Up to Rs.4 lakhs Base Rate + 7%
Loans from Rs.4 lakh up to Rs.7.5 lakhs Base Rate + 8%
Loans greater than Rs.7.5 lakhs Base Rate + 6%
Education Loan for Girl Student Up to Rs.4 lakhs Base Rate + 6.50%
Loans from Rs.4 lakhs to Rs.7.5 lakhs Base Rate + 7.50%
Loans greater than Rs.7.5 lakhs Base Rate + 5.50%

Note: The base rate is currently fixed at 9.95%.

. Processing Fees and Other Charges
There are no loan processing charges and prepayment charges for Axis Bank Education Loans. For the late payment of EMI, Rs.500 plus taxes per cheque bounce and a penal interest of 24% per annum on the overdue amount is charged.

. Security
Third party guarantee and/or collateral security might be asked as security in certain cases. As additional security, assignment of a LIC policy in the bank’s favour for the sum assured being at least 100% of the education loan amount might be required. Also, the future income of the student needs to be assigned in favour of Axis Bank for meeting EMI obligations.

Margin
There is no margin for education loans amounting up to Rs.4 lakhs. For loans above Rs.4 lakhs, the margin is 5% for studies within India and 15% for studies abroad.

Eligibility and Documentation for Axis Bank Education Loan:

The eligibility conditions for Axis Bank Education Loans are as follows:
.The applicant should be a resident of India.
.The applicant should have been selected for an undergraduate or graduate, professional, job-oriented course such as medicine, engineering in a recognized university, college or institute.
The following documents will be required to be furnished to complete the loan application process.

Salaried Applicants:
. Proof of Identity: Passport, Voter’s ID, driving license or PAN card.
. Proof of Income: Latest salary slip showing all deductions, Form 16 and recent salary certificate.
. Proof of Residence: Bank account statement, electricity bill, telephone bill or house lease agreement.
. Last 6 months’ bank statement or passbook where salary or income is credited
. Guarantor form might be asked for.
. Education Documents: Copy of admission letter along with the fees schedule, mark sheets, certificates of S.S.C and H.S.C and degree courses.

Other Applicants:
Other classes of applicants must submit all the above documents. Instead of the latest salary slip, they can submit the Income Tax Returns statements for the last two years and computation of income by a certified CA for the last two years.

Subsidy Scheme:
The ministry of HRD, Government of India, has come up with a unique interest subsidy scheme to provide full interest subsidy during the course period plus one year or six months after getting a job, whichever is earlier. Specially designed for the students from economically weaker sections of the society where annual parental income is not more than Rs.4.5 lakhs, this scheme is available for borrowers pursuing any approved professional course from a recognized Indian institution.

Some of the points to keep in mind while availing this subsidy are as follows.

. This interest subsidy scheme can be availed only once by eligible students for pursuing an undergraduate, postgraduate or an integrated course from an Indian institution.
. The interest subsidy will not be considered for students who discontinue the course or who are expelled from the institution due to disciplinary or academic reasons. In case of discontinuation due to medical reasons, necessary documentation has to be submitted to avail this scheme.
. Interest rates on the loan shall be in line with the interest rates applicable under the Education Loan Scheme.
Kindly make an enquiry with the bank about the list of accredited institutions and technical courses that are eligible for the Interest subsidy scheme.

Axis Bank Education Loan FAQs:

1. What documents do I have to submit to avail the interest subsidy scheme on education loan?
The following documents need to be submitted at the time of loan sanctioning to avail the interest subsidy scheme.
. Income certificates as issued by appropriate authorities
. Bonifide student certificate
. The interest subsidy agreement, letter of undertaking cum declaration signed by borrowers.

2. I am planning to avail a loan of Rs.20 lakhs for doing my MS. Will I be able to avail the interest rate subsidy?
No. The interest rate subsidy is offered only to loan amounts up to Rs.10 lakh and only to students pursuing further education in an Indian institution.

3. How long will it take for the bank to process my application?
After all necessary documents are submitted, the bank will convey its decision within 15 working days from the date of receipt.

4. What is the role of the parents when applying for an education loan?
The parents or guardian of the student applicant will be treated as a co-applicant and a primary debtor.

5. How will the education loan be disbursed?
The student loan will be disbursed in full or suitable instalments depending on the requirement of funds or fees. It will be directly disbursed to the educational institution or the vendor.

State Bank of Travancore Education Loan

Overview:
State Bank of Travancore education loan scheme provides financial assistance to deserving students so that they can pursue college education, technical, professional or vocational course in India/ abroad. The student and parent or guardian can jointly borrow the loan amount from the Bank.

Feature & Benefits of State Bank of Travancore Education Loan:

Objective of State Bank of Travancore Education Loan:
The objective of the Bank is to provide financial aid to students and help them pay their tuition and other fees. This loan is made available to students, with their parent or guardian as co-obligor.

Interest Rates:
. For loan amount up to Rs. 4 lakhs, the interest rate is 13.90%.
. For loan amount between Rs. 4 lakhs and Rs. 7.5 lakhs, the interest rate applicable is 13.65%.
. Interest rate applicable for a loan amount above Rs. 7.5 lakhs, is 13.15%.

Processing Fees:
There are no processing fees for education loans taken in order to pursue studies in India. However, if the loan is taken to fund studies abroad, a nominal fee is levied as processing fees, depending on the amount of loan:
. For loan amount up to Rs. 4 Lakhs - 0.5%
. Above Rs.4 lacs : 0.4%
This is refundable upon availing 1st instalment of the loan.

Repayment Tenure:
. Repayment is to begin within 1 year of completion of the course or 6 months after getting a job, whichever is earlier.
. The loan has to be repaid within 10-15 years from commencement of repayment.

Maximum Loan Limit:
. For studies in India : Rs. 10 lacs
. For studies abroad : Rs. 20 lacs

Security:
1. Loans upto Rs.4 lakhs:
. Co-obligation of parent/ guardian/ spouse/ parent-in-law/ grandparents as the case may be.
. No security.

2.Above Rs.4 lacs and upto Rs. 7.5 lacs: Co-obligation of parent/ guardian/ spouse as the case may be along with collateral in the form of a satisfactory third party guarantee required.

3.For loans above Rs. 7.5 lacs: Co-obligation of parent/ guardian/ spouse/ parent-in-law/ grandparents along with tangible collateral security of suitable value preferably not less than 200% of the loan limit, along with the assignment of future income of the student for payment of instalments and tangible security of suitable value.

Margin:
. Upto Rs. 4 lacs : Nil
. Above Rs.4 lacs :
1. Studies in India : 5%
2. Studies abroad : 15%

Expenses considered for SBT education loan:
1. College, school and hostel fees.
2. Fees payable for Examination, Library and Laboratory.
3. Amount required for purchase of books, equipment, instruments as well as uniforms.
4. Deposits such as: Caution Deposit, Building Fund or Refundable Deposit.
5. Travel expenses for studies abroad.
6. Purchase of computers if needed for completion of the course.
7. Miscellaneous expenses required to complete the course like study tours, project work, etc.

Eligible courses - India/Abroad:

Studies in India:
. Graduate/ Post Graduate degree and PG diplomas conducted by approved colleges/ universities, recognized by UGC/ Govt. / AICTE/ AIBMS/ ICMR, etc.
. Courses like ICWA, CA, CFA.
. Courses conducted by IIMs, IITs, IISc, XLRI, NIFT, NID, etc.
. Regular Degree/Diploma courses like Aeronautical, pilot training, shipping, degree/ diploma in nursing or any other discipline approved by Director General of Civil Aviation/Shipping/Indian Nursing Council or any other regulatory body, if the course is pursued in India.
. Approved courses offered in India by reputed foreign universities.

Studies abroad:
. Job-oriented professional/technical courses offered by reputed universities for Graduation.
. Post-graduation in MCA, MBA, MS, and so on.
. Courses offered by CIMA-London, CPA in USA, etc.
. Degree/diploma courses like Aeronautical, Shipping, etc. that are recognized by competent regulatory bodies in India/abroad for the purpose of employment.

Eligibility:

. The student should be an Indian National. NRIs are not eligible.
. Student should have secured admission to professional/ technical courses through entrance test or merit-based selection process conducted by a Govt Agency / University.
. A minimum mark of 60% in aggregate is required and this is applicable to subjects in the last qualifying examination for students who have passed the entrance test or secured admission under management quota.
. Student should have secured admission in any foreign university institution through merit.

Subsidy:

The Ministry of HRD has initiated the Central Scheme for Interest subsidy on education loans and this scheme is offered by State Bank of Travancore to its customers. Students from financially weaker sections of the society who wish to pursue their Graduation or Post Graduation studies in Technical / Professional disciplines are eligible to avail this subsidy.

State Bank of Travancore Education Loan FAQs:

1. Who can act as a co-obligor to the loan?
The co-obligor can be parent(s) or guardian of the student borrower. If the borrower is married, co-obligor can be either spouse or the parents-in-law.

2. Is there a minimum age for being eligible for the State Bank of Travancore education loan?
There is no specific restriction with regard to the age of the student to be eligible for Education Loan.

3. What all can be placed as security?
Security can be in the form of land/ building/ Govt. securities/ public sector bonds/ units of UTI, KVP, and LIC Policy, gold, shares / debentures, bank deposit in the name of student / parent / guardian or any other third party with suitable margin.

4. What is the penalty if interest is not paid on time?
2% interest is charged as penalty for loans above Rs. 2 lakhs.

5. Is there any concession or rebate on interest of the loan?
1% interest concession can be availed if interest is debited during a financial year and is remitted within one month of its debit in account. 0.5% concession is given for female students.

Union Bank of India Education Loan

Overview:
Union Bank is one of India’s most prominent government owned banks which was established in the year 1919. The bank enjoys a widespread presence not only in India but also in countries like UAE, Abu Dhabi, Beijing, Sydney, London, Shanghai, Belgium, etc.
Under its personal banking arm, Union Bank of India offers Union Education which is essentially an education loan meant for all those who wish to borrow funds in order to pursue higher education in India or abroad.

Features / Benefits of the Union Bank Education Loan:

This education loan is designed for all individuals who wish to pursue basic education, graduation / higher education or any technical / professional / management course by recognized institutions in India or overseas.

Quantum of Loan:
For studies in India, the maximum quantum of loan which can be obtained is Rs 10 lakhs. For studies abroad, the quantum of loan is capped at Rs 20 lakh.

Repayment Tenure:

Quantum of LoanMaximum Repayment Tenure
Up to Rs 7.50 lakh10 years
Above Rs 7.50 lakh15 years

The moratorium period allowed with this loan can either be for the duration of the course period + 1 year or 6 months after getting a job, whichever occurs earlier.

Interest Rates:
The following tables list out the Union Bank Education loan interest rates not only for higher education as well as vocational training for male and female students.

Quantum of LoanInterest Rate (Male students)Interest Rate (Female students)
Up to Rs 7.50 lakh12.25% (fixed)11.75% (fixed)
Above Rs 7.50 lakh12.00% (fixed)11.50% (fixed)

For Vocational Education & Training

Male students11.75% (fixed)
Female students11.25% (fixed)

Processing Fees:
This loan does not carry any processing fee.

Margin:
For loans up to Rs 4 lakhs, no margin is required. However, for loans above Rs 4 lakhs taken for studies in India, a margin of 5% is required, while a margin of 15% is applicable if loan is taken for studies abroad. Any assistantship / scholarship secured will be included in the margin.

Security:

Quantum of LoanSecurity Required
Up to Rs 4 lakhNo security required
Above Rs 4 lakh & up to Rs 7.50 lakhSuitable third party guarantee which is acceptable to the bank
Above Rs 7.50 lakhTangible collateral security which is equal to the loan amount + interest combined, payable for the duration of the course and moratorium period, which is acceptable to the bank.

Please note, for all the above cases, the parent/spouse must be the co-applicant of the loan.

Union Bank Education Loan Eligibility:

In order to apply for the Union Bank education loan, the applicant must fulfil the following conditions:
. Must be an Indian citizen
. Applicant must have gained admission to a recognized institute in India or abroad through an appropriate standardized selection process or by clearing the concerned qualifying examination.

Union Bank Education Loan Course Eligibility:

Following is the broad category of courses which are eligible under the Union Bank education loan.

In India:
. Graduation / Post Graduation / Diploma courses offered by recognized universities / colleges.
. Technical / management / professional courses

Outside India:
. Graduation / Post Graduation / Diploma courses offered by recognized universities / colleges.
. Certified degree courses offered by recognized institutes like CIMA (London) and CPA (USA) and such others.
. Diploma courses offered outside India are not eligible for this loan.

Documentation Required for Union Bank of India Education Loan:

To apply for the Union Bank of India Education Loan, applicants need to furnish the following documents.

1. Proof of identity – Passport, PAN Card, Employee Identity card or any other valid proof
2. Proof of address - Electricity bill, Telephone bill, Ration card or any other valid proof.
3. PAN Card
4. Bank statement for the last 12 months
5. Admission documents, Admission Letter, Admit Card.
6. Schedule of expenses including the fee structure and living expenses.
7. Mark sheets for Class X or equivalent onwards.
8. 3 photographs
9. Proof of any out-goes
10. Loan repayment statement (If any)
11. LIC Policies (If any)
12. Any other document asked for in the application form
13. Proof of Income:
Salaried Individuals - Last one year’s Income Tax Returns, Form-16 / letter from employer, salary slips for the last 6 months.
Business Owners – Income Tax Returns for the last 3 years, Profit & Loss Balance Sheet.
Agriculturists – Income Certificate from concerned revenue officer (Tahsildar) or/and proof of land holding.

Subsidy Schemes for Union Bank Education Loan:

1. Central Scheme for Interest Subsidy (CSIS):
The Central Scheme for Interest Subsidy (CSIS) has been introduced by the Government of India in order to make quality education available to students belonging to the economically weaker sections of the society. The purpose of this scheme is to decrease the interest liability of individuals who have taken an education loan from any scheduled bank / regional rural bank (RRB) in order to pursue an approved technical / professional course from any recognized institution in India. Only students belonging to weaker sections of the economy, where the maximum annual family income is Rs 4.5 lakhs, at the time of availing the loan, are eligible to apply for this scheme.

2. Padho Pardesh:
The Padho Pardesh Scheme too has been introduced with the purpose of providing subsidy on interest for education loans for pursuing studies abroad. This subsidy scheme is designed especially for meritorious and deserving students belonging to the economically weaker sections of minority communities. In order to be eligible for this scheme, students must fulfill the following criteria:
. They must have secured admission to approved courses at the Masters, M.Phil and Phd level.
. Applicant must have taken a loan from a scheduled bank under the education loan scheme of the Indian Banks’ Association (IBA).
. The income ceiling of the applicant’s parents/guardians in this case must not exceed Rs 6 lakhs per annum and proof for the same must be submitted in form of an Income Certificate issued from the concerned authority of the state / Union Territory.

3. Special Education Loan Scheme:
This loan scheme has been introduced for students who wish to pursue higher education at prestigious B-schools in India like IIMs, XLRI, SPJIMR and MDI. This scheme offers the following special features:
1. Floating rate of interest with a Base Rate of 10.25%.
2. No margin applicable on loan amount with this scheme.
3. Applicants have the option to avail the loan either from their city of residence or the city where their educational institute is located.
4. Avail a loan for up to Rs 20 lakh.
5. No collateral security required.

Union Bank Education Loan FAQs:

1. How is the interest calculated on the Union Bank Education Loan?
Interest on this loan will be calculated based on the reducing balance method at monthly intervals. No compounding interest will be charged during the moratorium period.

2. What are the methods by which I can repay my Union Bank Education Loan?
Your Union Bank education loan will be repaid in equated monthly installments (EMIs) in any of the following ways: (i) By authorizing your bank to directly debit the EMI amount from your Union Bank of India Savings account; (ii) Via the internet banking facility available on your Union Bank of India savings account; (iii) ECS (Debit) facility or (iv) By issue of Post Dated Cheques (PDCs).

3. Is it necessary to have a guarantor while applying for a Union Bank Education Loan?
Yes, the bank requires that the parent/guardian of the student applicant must join as co-borrowers on the loan

4. How long will it take for my Union Bank education loan to be approved?
After the necessary documents have been submitted with the bank, it takes approximately 7 days for the loan to be sanctioned.

5. Does an applicant need to open an account with Union Bank in order to apply for their education loan?
No, it is not mandatory for an applicant to open an account in order to apply for the Union Bank Education Loan.

Federal Bank Education Loan

Overview:
Established in the pre-independence era, Federal Bank is a leading Indian Commercial Bank in the private sector. Headquartered in Aluva, Kerala, the bank has a strong network of more than a thousand branches and ATMs spread across the nation.
Education is a way of life. It is a basic necessity that helps one evolve as a person and broaden their perspective. Federal Bank helps the young minds from not missing an opportunity to educate themselves due to lack of finance. Federal Bank offers Education Loan to assist the financial needs required for education of your child. Shape your child’s future with Federal Bank’s Education Loan known as Special Vidya Loan.

Purpose of Federal Bank Education Loan:

Special Vidya Loan (Federal Bank’s Education Loan) gives an opportunity for students to pursue education, by providing financial support. The loan can be availed for various educational courses in India and abroad. Vocational training and skill development study courses are not eligible for this loan.

Features and Benefits:

Expenses Considered for Federal Bank’s Education Loan:
To maximise the benefit for students, Special Vidya Loan covers the following items –

. Tuition fee payable to the student’s college/school for the purpose of examination, library, lab, etc.
. Hostel fee. This is applicable in case of a school/college providing residential facilities to its students.
. Cost of laptop (only if essential for the course), books, uniform, equipment and instruments required for the course and travel expenses of the student.
. Expenses incurred for project work, study tours, thesis, etc.
. Caution deposit fee charged by the institution, amount payable towards the institution’s building fund, any other refundable deposit. All of these need to be supported by bills/ receipts, and cannot exceed 10% of the tuition fee of the course.

Amount of Education Loan:
For courses in India, the loan amount is up to Rs.10 lakhs, and Rs.20 lakhs for courses abroad. This loan can’t be availed for vocational training and skill development courses, whether in India or abroad. The loan quantum depends on the repayment capacity of the parents or student. To ensure a continued disbursal of the loan, the student needs to deliver a satisfactory performance throughout the course.

Margin:
. No margin is applicable on loan amount up to Rs.4 lakhs.
. 5% margin is applicable on loan amount above Rs.4 lakhs, for studies in India.
. 15% margin is applicable on loan amount above Rs.4 lakhs, for studies abroad.

Rate of Interest:
For convenience of students and parents, Federal Bank offers Education Loans at affordable rates of interest. It ranges from Base Rate + 3.25% to Base Rate + 4.90%. The Base Rate is 10.2% per annum with effect from 16th June 2014. Only simple interest is charged during moratorium period.

Repayment Options:
Repayment towards the loan can be made in easy EMIs. No repayments need to be made during the moratorium period. The moratorium period is the duration of the course + one year/six months after the student gets a job, whichever is earlier. The following methods can be used to repay the loan, in Easy Monthly Instalments –
. Cheques
. Standing Instructions at your Federal bank branch/automated payment through ECS.
. Through the bank’s internet banking facility called FedNet
. Mobile Banking

Loan Period:
The loan period is the moratorium period + 5 to 7 years. The moratorium period is the duration of the course + one year/six months after the student gets a job, whichever is earlier.

Security:
. For loan amount up to Rs. 4 lakhs, no security is required.
. For loans up to Rs. 7.50 lakhs, bank accepts third party guarantee and collateral security.
. If a loan above Rs. 7.50 lakhs has been availed, then collateral security with a stipulated margin is needed.

Documents required:

To avail an Education Loan from Federal Bank, you need the following documents –
. Proof of Identity issued by the government – passport, driving license, PAN card, etc.
. Proof of Residence – ration card, electricity bill, lease agreement, etc.
. Offer letter/admission letter from the educational institution
. Basic qualification certificate and marks card
. Proof of fee structure from the educational institute
In case of co-obligation, documents should be executed by the parent/guardian and the student, as joint borrowers.

Federal Bank Education Loan Eligibility and Loan Application Procedure:

Following are the eligibility criteria to avail Federal Bank’s Special Vidya Loan-
. Applicant should be a citizen of India.
. Applicant needs to secure admission to the professional/technical course (for which the loan is availed) through a formal entrance test/selection process.
. The educational institution and course need to hold a government approval/recognition.
. Vocational training and skill development courses are not eligible to avail this loan.
. A course certificate needs to be issued by a body formed by enactment of Parliament/ Government Department/University.

To apply for the loan, you can download the loan application form from the bank’s official website and submit it to the nearest branch, after duly filling it up. Federal Bank’s customer care executives and branch representatives can also assist you through the entire process.

Subsidy Scheme:

Federal Bank offers Central Government Interest Subsidy Scheme for Educational Loans. Please refer to the bank’s website or visit the nearest bank branch to attain more clarity on this scheme.

Federal Bank Education Loan FAQs:

1. What is the interest charged during moratorium period?
Only simple interest will be charged during the moratorium period. Once the moratorium period is over, the rates of interest mentioned in the interest rate chart will be charged, depending on the tenure.

2. I am planning to study abroad. Am I eligible to apply for an Education Loan?
Yes, Federal Bank offers up to Rs. 20 lakhs for courses pursued abroad. Your travel expenses and study tours will also be covered by the loan.

3. How does the documentation work, in case of co-obligation?
In case of co-obligation, documents should be executed by the parent/guardian and the student, as joint borrowers.

4. Is there a range on the rate of interest charged on Education Loan offered by Federal Bank?
Yes, the interest rate ranges from Base Rate+3.25% to Base Rate+4.90%.

Canara Bank Education Loan

Overview:
One of the main agendas of the Government of India is to make sure that no one is deprived of a proper education due to financial constraints. Indian Banks' Association (IBA) has framed an all-inclusive model educational loan scheme, which every bank has adopted. With the aim of supporting students from economically weaker sections of the society, Department of Education, Ministry of Human Resource Development and Government of India has launched this scheme with subsidized interest.
Canara Bank Offers two kinds of education loans, namely Loans for Students and Model Loan Scheme for Vocational Education & Training.

1. LOANS FOR STUDENTS:

Features & Benefits of Canara Bank Loans for Students:

Objective / Loan Purpose:
The loan principally goes towards the course fees for the stream chosen by the applicant. It can also cover the costs of textbooks, apparatus, instruments, uniform imposed by the institution, yearly hostel fee payment, exam fee, study trips as well as other related expenses. This is applicable irrespective of where the applicant chooses to study - in India or overseas.

Expenses considered for Canara Bank Education Loan:
Course fee, hostel fee, costs of required books and instruments, examination fee and study trips are considered.

Amount of Education Loan:
As a need-based educational loan, Canara Bank has a limit on the amount it will provide as loan.
. For education in India: Up to INR. 10 lakh.
. For education overseas: Up to INR. 20 lakh.

Interest Rates:
. If the loan you have taken is less than INR 4 lakhs, no interest will be levied.
. For loan sum more than that, 5 percent interest will be levied if you are studying in India and 15 percent if you are going abroad.

Repayment:
. Starts a year after the course is completed or six months after landing a job, whichever is earlier.
. Loan with interest can be repaid in EMIs i.e. you can take 10 years to repay loan amount up to INR. 7.5 lakhs and 15 years if the amount is more than that.

Security:
. Loan is provided conjointly to the applicant and his/ her guardian.
. There is an agreement that future earnings of the student will contribute to loan repayment.
. No collateral is required if the loan amount is less than INR. 4 lakh.
. For loan sum between INR. 4 lakh and INR 7.5 lakh, guarantee from a bank-approved third party may be required. To avoid this, the borrower can offer security of palpable assets (covering the loan amount) in its stead.
. If the loan amount is more than INR. 7.5 lakhs, the security worth the same is required as collateral.

Margin:
. Up to INR. 4 lakhs – Nil
. Above INR. 4 lakhs:
- For studying in India – 5%
- For studying overseas - 15%

Eligible Courses:
a. India:
Bachelors (Graduation) and Masters (Post-graduation) that include professional as well as technical courses with work potential conducted by colleges or universities validated by UGC, Government, Department of Electronics, AICTE, IMC, and autonomous institutes like IIT, IIM, Madras Christian College etc.

b.Abroad:
Any Bachelor's or Master's Degree that is employment-oriented from an approved institute.

Documentation required:

. Mark sheet of the most recent qualifying public exam for school or college in India.
. Proof of admission to the course (Fee receipts, Transfer Certificate, etc.).
. Schedule of expenses for the course (Fee receipts obtained from the institute).
. Two recent passport size photos of the borrower, co-obligant and guarantor.
. Duplicate copy of any national ID card like passport, Voter’s ID, Driving License etc.
. Recent salary slips if you are a salaried person and income proofs like reference from clients, IT papers etc. if you are self-employed, freelancers, professionals, entrepreneurs or agriculturist.

Student Eligibility Criteria:

. The student must be an Indian National & must have passed the required course with essential grades.
. The applicant must have received admission in a course in any recognized institute, approved by the State or Central Government.

2. MODEL LOAN SCHEME FOR VOCATIONAL EDUCATION AND TRAINING:

Features & Benefits of Model Loan Scheme for Vocational Education & Training:
Objective/ Loan Purpose:
The purpose of Model Loan Scheme for Vocational Education & Training is to finance the expenses of a student throughout the course period. Vocational courses are job-oriented and train students in a specific field before aiding them with placements.

Expenses considered for Canara Bank’s Model Loan Scheme for Vocational Education & Training:
The loan mainly goes towards the student’s tuition fees for the entire course, exam fee and lab fee and library fund and caution deposit. It can also be used to finance the required books, apparatus and other valid expenses.

Amount of Education Loan:
. For three-month courses - INR 20,000/-
. For three to six month courses – INR 50,000/-
. For 6 months to 1 year courses – INR 75,000/-
. For courses of one year and above - INR 150,000/-

Repayment Period:

Once the course is completed, the settlement of loan will begin after a cessation period as given below:
. For courses of up to one year - Six months from completion.
. For courses that takes more than one year – One year from completion.

The repayment period are listed below:
. Loan taken for courses from three months to one year should be paid back in two to five years.
. Loan taken for courses for more than one year should be paid back in three to seven years.

Security:
You do not need to provide any collateral or security. There is no requirement for a third party guarantor either. But the parent or guardian has to execute the loan papers as a joint borrower along with the student.

Margin: Nil
Eligible Courses:
Any development/ Vocational Courses of period ranging from 2 months to 3 years, preferably granting you with a certification, diploma or degree given by a known organization, approved by the State or Central Government.

Documentation required:
. Mark sheet of the most recent qualifying public exam for school or college in India.
. Proof of admission to the course (Fee receipts, Transfer Certificate, etc).
. Schedule of expenses for the course (Fee receipts obtained from the institute).
. Two recent passport size photos of the borrower, co-obligant and guarantor.
. Duplicate copy of any national ID card like passport, Voters ID, Driving License, etc.
. Most recent salary slips if you are a salaried person and income proofs like reference from clients, IT papers etc. if you are self-employed, freelancers, professionals, entrepreneurs or agriculturist.

Student Eligibility Criteria:
. The student must be an Indian National & must have passed the SSLC examination.
. The applicant must have secured admission in a vocational course in any recognized institute, approved by the State or Central Government.

Canara Bank Education Loan FAQs:

What is CSIS?
The Central Government has established a new Central Scheme to deliver interest subsidy during the period between course completion and landing a job on educational loans for borrowers belonging to financially weaker sections (with parents earning less than INR. 4.5 lakh per year).

2. What is the last date for filing incomplete claims for the year?
It is normally done by the end of June.

3. Am I eligible for subsidy if I am going to study abroad and has taken a loan for 20 lakhs?
Approving the subsidy depends solely on the bank’s discretion.

4. If I am joining another course soon after the current course, can I get an extension?
In most cases, you will not get an extension. And even if you do, the interest rates will be higher.

5. Can I place my family property as collateral?
Yes, but only with the consent of all the family members involved.

IDBI Bank Education Loan

Overview:
IDBI Bank provides educational loans to students to pursue higher education in India and abroad. Deserving students, according to their eligibility and requirements, can choose from a number of financial loans and repayment options offered. IDBI educational loans help students procure financing options to secure their future.

Features and Benefits:

The IDBI Educational Loan scheme consists of four types:

1. Non Vocational Courses:
This is offered for students of Indian nationality having secured admission through merit-based selection or entrance test process after completion of HSC (10+2) for higher education in recognized institutions in India and abroad. This includes studying in Premier Education Institutes, including IIMs, IITs, ISB, and for the ICAI Chartered Accountancy course and for special courses.
It is also offered for students who have secured admission under Management Quota although eligible under merit, meaning the student has secured marks above the cut-off level required for merit-based admission according to the General/Girls/SC/ST/OBC specifications for that institution.

Type of courses:
a) Studies in India:
. Approved courses for graduation or post-graduation and PG diplomas by universities or colleges recognized by UGC, Govt., AICTE, AIBMS, IMCR, etc.
. Job-oriented courses for technical or professional degrees, postgraduate and diplomas in recognized institutions.
. Technical diplomas after 10th standard, offered by approved polytechnic institutions (usually three years).
. In case of dual courses, where part of the course is abroad, the domestic course will be considered.
. Approved courses offered by reputed foreign schools/universities in India.

b) Studies Abroad:
. Graduation for job-oriented technical or professional courses offered by reputed universities.
. Post-graduation for MBA, MS, MCA, etc., and approved diploma courses.
. Courses by CPA in USA, CIMA-London, etc.

Special courses:
. Degree or diplomas for pilot training, shipping, aeronautical by recognized regulatory bodies for the purpose of employment in India or abroad.

Expenses Covered:
1. Fees payable to the school, college, hostel.
2. Fees for examination, laboratory, library.
3. Books, uniforms, equipment, instruments.
4. Expenses for any computers or laptops required for the course.
5. Travel expenses incurred during the course.
6. Building fund or caution deposit with institution bill. Amount should not exceed 10% of total tuition fees for the entire course.
7. Insurance premium for student, if sought.
8. Any other expenses required to complete the course such as thesis, projects, and study tours.
The maximum expenditure under D, E, F, G and H should be no more than 50% of the total tuition fees for the course.

Amount given for education loan:
According to the repaying capacity of the parents or students, the loan amount is decided subject to a maximum of Rs. 10 lakhs for studies in India and Rs. 20 lakhs for studies abroad. In case of executive programmes, the maximum loan amount should not exceed Rs. 20 lakhs in India or abroad.

Interest rates:
The IDBI educational loan interest rate for non-vocational courses qualifying as per Priority Sector Lending (PSL)

QualificationsMaturity SlabInterest Rate (% p.a.)
Priority Sector Lending (PSL) Up to Rs. 10 lakhs for studies in India and up to Rs. 20 lakhs for studies Abroad 11.00% (BR+1.00%)
Not Priority Sector LendingAbove Rs. 10 lakhs for studies in India and above Rs. 20 lakhs for studies Abroad12.00% (BR+2.00%)

Rates for students in Premier Education Institutes (including ISB) is 10.00% (BR+0.00%)
For those students who secured admission under Management Quota the rate of interest is 13.50% (BR+3.50%).

Repayment tenure:
As per the IDBI educational loan procedure, the moratorium period is up to 1 year after the duration of the course or 6 months after getting a job, whichever is earlier. After this period, the duration repayment tenure is:

Loans up to Rs. 7.5 lakhsUp to 10 years
Loans above Rs. 7.5 lakhsUp to 15 years

Security:
. No security required for loans up to Rs. 4 lakhs. . Third party guarantee is required for loans above Rs. 4 lakhs and up to Rs. 7.5 lakhs. . For above Rs. 7.5 lakhs:

. Building/land (not agriculture) – the minimum value should be 1.33 times the amount of the loan. . Units of UTI, NSC, KVP, LIC policy, Govt. securities, Public Sector bonds, gold, share/mutual fund, debentures, and bank deposit in the name of the student, parent, guardian or third party – the minimum value should be 1.1 times or as per the respective margin limit against the security, whichever is lesser, of the amount of the loan. . The bank may accept any other tangible security with suitable margin.

Margin:
For loans above Rs. 4 lakhs, 5% of the total cost of the course is applicable.

2. Vocational courses:
Educational loans offered to Indian nationals having secured admission in a course run or supported by an organization or department of the Government. Or an organization supported by State Skill Corporations, State Skill Mission, or National Skill Development Corporation. It is preferable if it leads to a certificate, diploma or degree issued by an organization recognized by the Government or a Government organization itself.

Type of courses:
Vocational or skill development courses, the duration of which is 2 months to 3 years.
State Level Banker’s Committee or State Level Coordination Committee may add other skill development courses leading to employment.

Expenses considered:
1. Tuition or course fees.
2. Fees for examination, laboratory and library.
3. Books, equipment, instruments.
4. Caution deposit.
5. Insurance premium for student, if sought.
6. Any other expenses required to complete the course to be considered on merit.

Amount given for education loan:
Finance is based on the duration of the course and is given on need basis:

Course durationAmount
Up to 3 monthsUp to Rs. 20,000/-
3 months to 6 monthsUp to Rs. 50,000/-
6 months to 1 yearUp to Rs. 75,000/-
Above 1 yearUp to Rs. 1,50,000/-

Interest rates:
The rate of interest is 11.00% (BR+1.00%)

Repayment tenure:
The moratorium period for courses up to the duration of 1 year is 6 months after the completion of the course.
For courses above 1 year duration, it is 12 months after the completion of the course.
After this period, the duration repayment tenure is:

Loans up to Rs. 50,000Up to 2 years
Loans between Rs. 50,000 to Rs. 1 lakh2 to 5 years
Loans above 1 lakh3 to 7 years

Security:
Collateral or third party guarantee is not required. The parent will be required to execute the loan documents jointly.

3. Admission secured through management quota:
This loan is offered to Indian citizens or applicants residing in India who have secured admission through management quota, or secured admission under this as he/she did not qualify for merit quota.

Type of courses:
Any job-oriented courses offered by educational institutions located in India approved by statutory authorities like UGC, AICTE, etc.

Age eligibility:
As per the IDBI education loan eligibility, there is no minimum age limit, but the maximum age should be 50 years at the time of loan maturity. For the co-applicant, listed below is the age requirements:

Type of employmentMinimum ageMaximum age (at the loan maturity)
Salaried21 years65 years
Self-employed21 years70 years
Agriculturist21 years70 years

Amount given for education loan:
The maximum amount of loan given is up to Rs. 10 lakhs.

Interest rates:
The rate of interest is 13.50% (BR+3.50%).
In case of change of institution before disbursement, a fee of Rs. 1,000 + taxes will be applicable. There will be no increase in the loan amount already disbursed.

Repayment tenure:
The moratorium period is inclusive of the duration of the course + 6 months. Simple interest is charged during this period.
The loan can be repaid at any time up to 120 months excluding the moratorium period.

Security:
For this loan, no guarantees are required but primary security is mandatory.

. Primary security can be in the form of tangible security such as building, land (not agricultural) and the value of which must be 1.33 times the amount of the loan sanctioned at the time.
. If opting for mortgaging immovable property, the process needs to be followed as per the home loan.

In case the primary security is insufficient, collateral like NSC, LIC policy, FD and so on, could be considered to bring the loan ratio minimum to 1.33%.

. The surrender value of LIC policy will be considered at the time of sanctioning the loan. The residual maturity period of the policy should equal the tenure of repayment.
. Fixed deposits should be held with IDBI only. The residual tenure of the FD or NSC should equal the repayment tenure of the loan. It should also be in the name of the applicant or co-applicant.
. For any other security, it should adhere to the guidelines for loans against respective security.

Margin:
Before each disbursement, 15% of the total cost of the programme must be paid upfront irrespective of the loan amount and place of study. Disbursement may be in full or in stages as needed.

4. Education loan under financial inclusion:
This loan is aimed at customers from areas covered under Financial Inclusion Program (FIP) allotted by the RBI to IDBI bank.
Customers who have a 10th standard pass with 45% marks minimum are eligible. The minimum age requirement in 15 years. The co-applicant should have a savings bank account or an account under Bio-metric Smart card. Security is not required.

Types of courses:
Job-oriented courses offered by recognized institutions who have government approval like:
1. Certificate courses from ITI
2. Engineering diploma
3. Computer certificate course
4. Nursing / Teacher Training certificate courses and B.Ed.
5. Data entry operator course
6. Veterinary diploma
7. Agri diploma
8. Any job-oriented diploma or certificate course

Expenses covered:
1. Tuition fees.
2. Examination, laboratory, library fees.
3. Caution deposit.
4. Books, equipment, instruments.
5. Insurance premium for student, if sought.
6. Any other expenses required to complete the course to be considered on merit
The maximum expenditure under D, E and F should be no more than 50% of the total tuition fees for the course.

Amount given for education loan:
The amount given is Rs. 2 lakhs.

Interest:
The IDBI education loan rate of interest is 11.75% (BR+1.50%).

Repayment tenure:

Course durationMoratorium period
1 year6 months from the completion of the course.
1 year12 months from the completion of the course.
Loan amountRepayment period
Up to Rs. 50,000Up to 2 years
Rs. 50,000 – Rs. 1 lakh2 to 5 years
Above Rs. 1 lakh3 to 7 years

For all loans further details are furnished below:

Documents required

1. IDBI Bank Educational Loan application form

2. Residence and age proof
3. Income proof of parents or guardians with income-tax proof for 2 years.
4. Income proof, proof of tax paid, security details of guarantors.
5. A copy of the certificate or prospectus from the principal/head of the institution to calculate expenses.
6. Copy of statement of marks or certificates of last examination passed.
7. A confirmation of student’s admission from the institution.
8. For loans which require security, details of security offered with advocate’s search and report about its marketability, mortgage ability, and so on, must be furnished.
9. Sources of margin - documents of proof are required.
10. For studies in USA, I-20 form is required.
11. Consent for assigning LIC policy of the student to the bank, stating that the premium will be paid to continue to policy during the duration of the loan, if the loan exceeds specified amount.

Processing fees:

There are no processing fees applicable for studies in India. Legal charges and stamp duty (if applicable) is as per actuals.
For studies abroad, 1% of the loan amount up to a maximum of Rs. 5,000 plus taxes is applicable and will be refunded at the time of disbursement (including service tax), credited to the savings bank account with approval of the Branch Head, if and when availed by the borrower.
For other Management quota students, 1% of the loan amount plus service tax up to a minimum of Rs. 1,000 plus taxes are applicable.

Prepayment:

Prepayment is allowed at any time during the repayment of the loan without charges.
For other management quota students, part payment is allowed any number of times subject to a minimum of Rs. 25,000.
If the foreclosure is before 6 months from the date of the first EMI, 2% on the amount of prepayment will be charged.

Penalties:

Penal interest is charged at 2% p.a. for loans above 4 lakhs for the amount or period overdue.

Balance transfer:

Transfer from other FI to IDBI Bank is allowed subject to complying norms only for loans for non-vocational courses.
BT for vocational courses and loans under management quota is not allowed from other banks to IDBI Bank Ltd.

Subsidy scheme:

For students from economically weaker sections with the combined parental income of up to Rs. 4.5 lakhs p.a., the Ministry of HRD, Government of India, has formulated the Central Interest Subsidy Scheme which covers the full interest during the moratorium period of the loan. This scheme is available to students pursuing approved technical or professional courses in India after class 12. The maximum loan amount is Rs. 10 lakh.
The subsidy scheme is available to eligible students only once either for graduation or post-graduation. Combined undergraduate and post-graduate courses will be considered.

Processing fee:

The processing fee is as per the IDBI bank’s existing educational loan policy.

Documents required:

. Interest Subsidy Application form duly filled in. The format of application form is in Annexure III.
. Income proof to be certified by competent authorities designated by the respective State Government. The list of authorities are given in Annexure-IV. The RACs/branches have to collect the certificate of income proof from the applicants when they receive the education loan proposal for existing and new cases.
. Separate agreement to be executed between student borrower and IDBI Bank on applicable stamp paper (Annexure-IV).
Other documents required and the process remains the same as per the existing IDBI education loan scheme.

IDBI Educational Loan FAQS:

1. How will IDBI decide the loan amount I am eligible for?
The loan amount you are eligible for is determined on a number of factors, namely the total cost of the course, your repayment ability, and security or collateral offered, if needed.

2. Can I repay the loan through the duration of the course?
No. The EMIs on loans will usually begin 1 year after course completion or 6 months after employment, whichever is earlier. You can pay the interest charged monthly during the moratorium period. You could also prepay the loan after the moratorium period is over. Sometimes there are charges on prepayment.

3. How is interest charged on education loans?
Interest is charged monthly on a simple interest basis from the time of disbursement as per the rate given by the bank on your particular loan. Interest calculations will start as and when amounts are disbursed to you and not on the entire loan amount at once.

4. What is an EMI? How many EMIs will I have to pay?
An Equated Monthly Instalment, or EMI, is the monthly payment due to the lender or bank towards the repayment of a loan or purchase. EMIs are charged on a fixed date. The EMI is calculated based on the principal loan amount, interest rate and the tenure of loan. The number of EMIs you have to pay depends on the loan amount you have applied for, the duration of the course and the loan tenure.

5. Are there any concessions available to students on educational loans?
Students from lower economic status can apply for subsidy schemes provided by the Government. This covers the interest charged during the moratorium period.

6. Can I apply online for an educational loan?
Yes, there are options to apply online.

7. Am I eligible for a loan if my course is both in India and abroad?
Yes, the course is considered for a loan, or a part of the course will be approved.

8. What is the process of educational loans?
For an educational loan, the general process to follow is first you need to fill out the application form and submit it to the bank. There will be a personal discussion. You will have to secure and provide validated supporting documents. After this is a stage of loan approval or denial. The bank will require the borrower's signature on a promissory note. The loan amounts will be disbursed on need basis.

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