Bank Loan Details

Courses Eligible

• School education including plus 2 stage.
• Graduation courses: BA, B.Com., B.Sc., etc.
• Post Graduation courses: Masters & Ph.D.
• Professional courses: Engineering, Medical, Dental, Nursing, Tourism, Agriculture, Veterinary, Law , Management, Computer etc.
• Computer certificate courses of reputed institutes accredited to Depts. of Electronics or institutes affiliated to university.
• Courses like ICWA, CA, CFA etc.
• Courses conducted by IIM, IIT,IISc,XLRI,NIFT ETC.
• Courses offered in India by reputed foreign universities.
• Evening courses of approved institutes
• Other courses leading to diploma / degree etc. conducted by colleges / universities approved by UGC / Govt. / AICTE / AIBMS / ICMR etc.
• Courses offered by National Institutes and other reputed private institutions. Banks may have the system of appraising other institution courses depending on future prospects/recognition by user institutions.

Eligibility

• Any student who is an Indian national.
• Has secured admission to a professional or a technical course through an Entrance Test or any other Selection process.
• Has secured admission to a foreign University or Institution.

Expenses considered for loan

• Fee payable to college/school/hostel.
• Examination /Library/Laboratory fee.
• Purchase of books/ equipments/ instruments/ uniforms.
• Caution deposit/building fund/refundable deposit supported by institution bills/receipts.
• Travel expenses/passage money for studies abroad .
• Purchase of computers essential for completion of the course.
• Any other expense required to complete the course like study tours, project work, thesis, etc.

Quantum of Finance

Need based finance subject to repaying capacity of the parents / students with margin and the following ceilings.

• Studies in India - Maximum Rs.7.50 Lacs.

Margin

• Up to Rs.2 lacs: Nil
• Above Rs.2 lacs : Studies in India 15% Scholarship/assistantship to be included in margin
• Margin may be brought-in on year-to-year basis as and when disbursements are made on a pro-rata basis.

Security

• Up to Rs.2 lacs:No security
• Above Rs.2 lacs: Collateral security equal to 100 % of the loan Amount of guarantee of third person known to bank for 100% of the loan amount.
• Note: The document should be executed by both the student and the guardian.
• The security can be in the form of land/ building/ Govt.securities/ Public Sector Bonds/ Units of UTI, NSC, KVP, LIC policy, gold, shares/ debentures, bank deposit in the name of student parent/ guardian or any other third party with suitable margin.
• Wherever the land/building is already mortgaged, the unencumbered portion Can be taken as security on 11-charge basis provided it covers the required Loan amount.
• In case the loan is given for purchase of computer the same to be Hypothecated to the Bank.
• Banks who wish to support highly meritorious/deserving students without security may delegate such powers to a fairly higher-level authority.

Rate of Interest

• Up to Rs. 2 lacs: PLR
• The interest to be debited quarterly/half yearly on simple basis during the Repayment holiday/ Moratorium period.
• Penal interest @ 2% be charged for above Rs.2 lacs for the overdue amount and overdue period.

Follow Up

• Banks to contact college/university authorities to send the progress report at regular intervals in respect of students who have availed loans.

Processing Charges

• No processing/upfront charges may be collected on educational loans.

Repayment

• Repayment holiday / Moratorium
  Course period + 1 year or 6 months after getting job, whichever is earlier.
  The loan to be repaid in 5-7 years after commencement of repayment If the student is not able to complete the course within the scheduled time extension of time for completion of course may be permitted for a maximum period of 2 years. If the student is not able to complete the course for reasons beyond his control, sanctioning authority may at his discretion consider such extensions as may be deemed necessary to complete the course.
• The accrued interest during the repayment holiday period to be added to the principal and repayment in Equated Monthly Installments (EMI) fixed.
• 1-2% interest concession may be provided for loanees if the interest is serviced during the study period when repayment holiday is specified for interest/ repayment under the scheme.

Capability Certificate

• Banks can also issue the capability certificate for students going abroad for higher studies. For this financial and other supporting documents may be obtained from applicant, if required.
• Some of the foreign universities require the students to submit a certificate from their bankers about the sponsors solvency/financial capability, with a view to ensure that the sponsors of the students going abroad for higher studies are capable of meeting the expenses till completion of studies.

Other Conditions

• No due certificate need not be insisted upon as a pre-condition for considering educational loan. However, Banks may obtain a declaration/an affidavit confirming that no loans are availed from other banks. Loan applications have to be disposed of within a period of 15 days to 1 month, but not exceeding the time norms stipulated for disposing of loan applications under priority sector lending. In order to bring flexibility in terms like eligibility, margin, security norms, banks may consider relaxation in the norms on a case to case basis delegating the powers to a fairly higher level authority.

Important

• Since the rules, regulations, eligibility conditions, repayments and interests rates etc. are revised by the banks from time to time in keeping pace with the changing capital market conditions, students and parents are advised to thoroughly check the terms and conditions of educational loan scheme on offer at the time of application.

Check list for Education loan

Documents to be submitted along with the application for bank loan.
• The mark sheets of last qualifying examinations for school and graduate studies in India.
• The proof of admission scholarship, freeship, studentship etc.
• The Schedule of expenses for the specified course
• The copies of letters confirming scholarships, etc.
• The copies of foreign exchange permits, if applicable.
• 2 passport size photographs.
• The borrower's Bank account statement for the last six months.
• Income tax assessment order, not more than 2 years old.
• A brief statement of assets and liabilities, of the borrower.
• Proof of Income (i.e Salary slips/ Forms 16 etc)

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