Education Loan Scheme

Purpose: It aims at providing financial support from the naming system to poor and meritorious students for pursuing higher education in India and abroad.

Eligibility: Indian National who has secured admission to professional/technical courses in recognized institutions in India or Abroad through Entrance Test/Merit based Selection Process after completion of H.S.C. (10+2 or equivalent).

Courses Eligible: 

  1. Courses Eligible for Study in India
  • Approved courses leading to graduate/post graduate degree and P.G. diplomas conducted by recognized colleges/universities recognized by UGC/Govt./AICTE/AIBMS/ICMR etc.
  • Courses like ICWA, CA, CFA etc.
  • Courses conducted by IIMs, IITs, IISc, XLRI, NIFT, NID etc.
  • Regular Degree/Diploma courses like Aeronautical, Pilot training, Shipping etc. approved by Director General of Civil Aviation/Shipping, if the course is pursued in India.
  • Approved courses offered in India by reputed foreign universities.
  • Courses other than the above offered by reputed institutions may also be considered on the basis of employability.
  1. Courses Eligible for Study Abroad
  • Graduation: For job oriented professional/technical courses offered by reputed universities.
  • Post Graduation: MCA, MBA, MS, etc.
  • Courses conducted by CIMA-London, CPA in USA etc.
  • Degree/Diploma courses like aeronautical, pilot training, shipping etc. provided these are recognized by competent regulatory bodies in India/Abroad for the purpose of employment in India/Abroad.

For information on recognition status of the Institutes may be gathered from the following websites:

For studies in India

For studies Abroad

Expenses Considered for Loan

  • Fee payable to college/school/hostel (lodging & boarding charges should be reasonable)
  • Examination/Library/Laboratory fee
  • Purchase of books/equipment/instruments/uniforms
  • Insurance premium for student borrower, if applicable.
  • Caution Deposit/Building Fund/Refundable Deposit supported by Institution bills/receipts, subject to the conditions that amount does not exceed 10% of the total tuition fees for the entire course.
  • Purchase of computers essential for completion of the course at reasonable rate.
  • Travel expenses/Passage Money for studies abroad.
  • Any other expense required to complete the course – like study tours, project cost, thesis etc.

Quantum of Loan

Need based finance subject to repaying capacity of the parent(s)/students with following ceilings:

  • Studies in India: Maximum up to Rs. 10 lakhs
  • Studies Abroad: Maximum up to Rs. 20 lakhs

The ceilings fixed for studies in India and abroad correspond to the limits fixed by the RBI for treatment as Priority Sector lending.

Margin

For loan up to Rs. 4.00 lakh  NIL
For loan above Rs. 4.00  
Studies in India  5.00%
Studies Abroad 15.00%
  • Scholarship/Assistantship is to be included in Margin
  • Margin may be brought on year-to-year basis.

Security


Up to Rs. 4 lakh
NIL, Only co-obligation of Parent(s)/Guardian. Parent(s)/Guardian to be joint borrower(s)
Above Rs. 4 lakhs & up to Rs. 7.5 lakh Besides the parent(s)/guardian executing the documents as Joint Borrower(s), Collateral Security in the form of suitable Third Party Guarantee.
Above Rs. 7.50 lakh Parents(s)/Guardian to be joint borrower(s)
Tangible Collateral security of suitable value acceptable to bank, along with the assignment of future income of the student for payment of instalments.
Note:The loan documents should be executed by both the student and the parent/guardian as joint borrower.

Rate of Interest: Interest will be charged at prevailing rate depending on the quantum of loan.

Application of Interest: 

  • Simple Interest to be charged during the study period and up to commencement of repayment.
  • Servicing of interest during study period and the moratorium period till commencement of repayment is optional for students. Accrued interest will be added to the principal amount borrowed while fixing EMI for repayment.
  • Rebate of 1% on the interest charged in the moratorium period may be provided by the bank, if interest is serviced during the study period and subsequent moratorium period prior to commencement of repayment.

Moratorium Period: Repayment Holiday/Moratorium is Course Period + 1 Year or 6 months after getting a job, whichever is earlier.

Repayment Period:

Repayment of the loan will be in EMI for period as under:

  • For loans up to Rs. 7.50: A maximum period of 10 yrs (excluding repayment holiday)
  • For loans above Rs. 7.50 lakh: A maximum period of 15 yrs (excluding repayment holiday)

Pre-payment Penalty: No pre-payment penalty will be levied for pre-closure/pre-payment of loan any time during the repayment period.

Processing Fees: No processing/up-front charges will be levied on loans sanctioned under the scheme.

Insurance: Bank may, with the consent of the student, arrange for life insurance policy on the students availing Education loan.

Other Conditions: 

Minimum Age: There is no specific restriction with regard to the age of the student to be eligible for education loan. However, if the student was a minor while the parent executed documents for the loan, the bank will obtain a Letter of Ratification from him/her upon attaining majority.

Joint Borrower: The joint borrower should normally be parent(s)/guardian of the student borrower. In case of a married person, joint borrower can be spouse or the parent(s) /parent(s)-in-law.

Disbursement: The loan is to be disbursed in stages as per the requirement/demand directly to the Institution/vendors of equipment/instruments to the extent possible.