How to get education loan in india

Loan:

       Loan plays vital role in the country’s economy as well as in the life of individuals for their betterment. There are different kinds of loan facilities which are available in all the fields of economy such as Industry, commerce and agriculture. In addition to this there are various types of loans available to both the school and college students and individuals to meet their needs. The loans for Medical treatment, land and house purchase, house construction, vehicle purchase and education loan for both school and college students.

 

       Education loan is available for the students to continue their higher studies in India and abroad. Both school and college students shall apply. All the banks issue loan application forms and guide applying procedures and loan repaying formalities. There is no difficulty for availing these facilities. Students have to start loan repayment one year after the completion of their studies or job placement whichever is earlier.

       Deserving and meritorious students may utilize bank loan facilities for their better future and avoid discontinuing their skill and efforts.   

EDUCATION LOANS  

A term loan granted to Indian Nationals for pursuing higher education in India or abroad where admission has been secured.

Eligible Courses

a. Studies in India:  

·       Graduation, Post-graduation including regular technical and professional Degree/Diploma courses conducted by colleges/universities approved by UGC/ AICTE/IMC/Govt. etc

·      Regular Degree/ Diploma Courses conducted by autonomous institutions like IIT, IIM etc

·       Teacher training/ Nursing courses approved by Central government or the State Government

·      Regular Degree/Diploma Courses like Aeronautical, pilot training, shipping etc. approved by Director General of Civil Aviation/Shipping

·       Vocational Training and Skill Development Study Courses will not be covered under the regular Education Loan Schemes. A separate scheme for ‘Loans for Vocational Education and Training’ has been launched which covers financing for such Vocational courses

b. Studies abroad:

·        Job oriented professional/ technical Graduation Degree courses/ Post Graduation Degree and Diploma courses like MCA, MBA, MS, etc offered by reputed universities

Expenses considered for loan

• Fees payable to college/school/hostel
• Examination/Library/Laboratory fees
• Purchase of Books/Equipment/Instruments/Uniforms, Purchase of computers- essential for completion of the course (maximum 20% of the total tuition fees payable for completion of the course) 
• Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tuition fees for the entire course) 
• Travel Expenses/Passage money for studies abroad
• Cost of a Two-wheeler upto Rs. 50,000/-

Any other expenses required to complete the course like study tours, project work etc.

Amount of Loan

• For studies in India, maximum Rs. 10 lacs
• Studies abroad, maximum Rs. 30 lacs

Interest Rates          

SBI Base Rate 9.70 % w.e.f. 04.02.2013

EDUCATION LOANS

SBI Student Loan Scheme  

Loan Amount	Rate of Interest*
For loans upto Rs.4 lacs	3.50% above Base Rate, currently 13.20% p.a.
Above Rs.4 lacs and upto Rs.7.50 lacs	3.75% above Base Rate, currently 13.45% p.a.
Above Rs.7.50 lacs	1.75% above Base Rate, currently 11.45% p.a.

 *(0.50% concession in interest for girl students)

* (1% concession for full tenure of the loan, if interest is serviced promptly as and when applied during the moratorium period, including course duration^#)

Processing Fees

• No processing fee/ upfront charges
• Deposit of Rs. 5000/- for education loan for studies abroad which will be adjusted in the margin money

Repayment Tenure

Repayment will commence one year after completion of course or 6 months after securing a job, whichever is earlier.

Maximum Loan Limit	Repayment Period
Upto Rs. 4 Lacs	5-7 years
Above Rs. 4 Lacs and upto Rs. 7.5 Lacs	5-7 years
Above Rs. 7.5 Lacs	Upto 12 years

 

Security

Particular	Security
Upto Rs. 4 lacs loan amount	Only Parent/ Guardian as co-borrower
Above Rs. 4 lacs to Rs. 7.50 lacs loan amount	Parent/ Guardian as co-borrower and Collateral security in the form of suitable third party guarantee*. *Third Party Guarantee can be replaced with Parent/Guardian as co-borrower provided the Gross Annual Income of Parent/Guardian (co-borrower) as given in latest Income Tax Return is 3 times of the loan amount.
Above Rs. 7.50 lacs loan amount	Parent/ Guardian as co-borrower and tangible collateral security

In case of married person, co-obligator can be either spouse or the parent(s)/ parents-in-law

Margin

• For loans up to Rs.4.0 lacs : No Margin
• For loans above Rs.4.0 lacs:
• Studies in India: 5%
• Studies Abroad: 15%

Documentation Required

• Completed Education Loan Application Form.
• Mark sheets of last qualifying examination
• Proof of admission scholarship, studentship etc
• Schedule of expenses for the specified course
• 2 passport size photographs
• PAN Card of the student and the Parent/ Guardian
• Borrower's Bank account statement for the last six months
• Income tax Returns/ IT assessment order, of last 2 yrs (If IT Payee)
• Brief statement of assets and liabilities, of the Co-borrower
• Proof of Income (i.e. Salary slips/ Form 16 etc. if applicable)