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INDEX 1 2 3 4 5 6 7 INTRODUCTION OF EDUCATION LOAN TYPES OF EDUCATION LOAN ADVANTAGES & DISADVANTAGES OBJECTIVES OF EDUCATION LOAN WHEN, WHERE, HOW

TO APPLY FOR LOAN STUDENT LOAN CONSOLIDATION EDUCATIONAL LOAN SCHEME FOR PURSUING HIGHER STUDIES IN INDIA AND ABROAD 8 DOCUMENTS REQUIRED AT THE TIME OF SANCTION OF EDUCATIONAL LOAN 9 10 COMPARISION FACTORS FOR BEST EDUCATION LOAN INCREASE EDUCATION LOAN LENDING:NAIR COMMITTEE RECOMMENDATION 11 12 13 14 15 SBI BANK AXIS BANK CURRENT NEWS REGARDING EDUCATION LOAN RESEARCH CONCLUSION

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INTRODUCTION:

Education loan in India

Now, Education Loans are easily available from various banks in India. Many Nationalized banks are coming up with various Educational Loan schemes and more students can take up higher education despite of their financial problem.

Constitution of India lists Right to Education as one of the fundamental rights. Tough this only covers education till the age of 14 years, but over the year number of students graduating from various institutes have increased. Infact, educational loan is one of the most crucial loans that one avails throughout their lives. As per the Ministry of Finance directives, education comes under the priority sector. So the government makes sure that the interest of the students is always preserved at the same time keeping the interest of the lenders intact. To meet this ever growing demand for educational loans the Indian Banks Association (IBA) devised Model Educational Loan Scheme in 2001. The scheme was conceptualized by a recommendations of a study group of IBA, which was approved by RBI and given to banks for accepting and implementing in their education loan products.

An Education loan is designed to help students pay for college tuition, books, and living expenses. It differs from other types of loans in that the interest rate is substantially lower and the repayment terms are easy. An education loan is a

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form of financial support from any bank or financial institution that enables a student for taking higher education. Availability of the education loan, at the appropriate time can help millions of deserving bright young Indians to achieve their dreams come true. All graduation, post-graduation and professional courses from institutes approved by the state and central government and also from foreign universities are eligible for loan.

These days education comes with a cost and higher education seems to be proving costlier day by day. The question haunting most of the deserving students, whose parents / guardians are not rich enough, is with respect to any available financing options. To support such students so that they may not left behind from the main league of education, the government of India has formulated Educational Loan Scheme. Two banking and financial Apex Bodies, the Reserve Bank of India (RBI) and Indian Bankers Association (IBA) have helped the government in preparing the plan and procedure for educational loans. The new scheme covers all types of courses including professional courses in schools and colleges in India and abroad.

The rising cost of higher education has become a big cause of worry for students and parents alike. How will one be able to fund the huge expense required for professional courses is the prime concern for people seeking to increase their qualifications. If a student is seeking to go abroad for pursuing higher studies, the costs are far greater as compared to studying in India. An education loan to pay for the high tuition fees and other associated costs is fast becoming a need for an ambitious student.
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caution deposits.Education loan is a special purpose loan given by banks and financial institutions to cover the cost of any higher degrees or specialized courses. Purchase of Books. thesis. Banks do consider the reputation and affiliation of institute from where the course is being conducted. hotel management. banks readily provide education loans for management. uniforms. medicine. library fee. Building fund supported by Institution bills or receipts. Catering both to under graduate and post graduate courses. School or Hostel. agriculture. The education loan provided by banks in India cover the fee Payable to the College. before giving any educational loan. pure sciences.like study tours. Whether you get 100% of the cost of education as education loan or not.essential for completion of the course and any other expense required to complete the course . etc are also covered. Travel expenses/passage money for studies abroad. fine arts. depends on individual banks. project work. instruments. Banks provide great financial help needed to cover almost all the expenses incurred for a successful completion of the desired course. 4 . It also covers the examination fee. Indian banks while providing education loans require that the applicant must be a resident Indian having secured admission in any of the bank's list of approved course or universities. architecture. purchase of computers . MCA. refundable deposit asked by the institution. lab fees. designing. engineering. arts and commerce courses. Banks in India now cover a wide spectrum of courses in their education loan schemes. equipments.

Private loans come to their rescue. Since many different financial firms offer Private loans services. the Stafford and Perkins loans are two of the frequently opted for loan schemes by the undergraduates. 5 . but they are taken out through financial organizations and firms. There are a variety of education loans out there. In the case of Federal loans. Broadly. Often it happens that many students cannot qualify for federal loans. It does not matter whether you opt to study at university level. there are two types of education or student loans: Federal Loans Federal loans are one of the commonly opted for loans.TYPES OF EDUCATIONAL LOANS:Want to study ahead but the fees are too high? Looking for a way to fund your college studies? All you need is an Education Loan. Private Loans Private loans are those offered by private financing firms and organizations or schools. it is always best to look around to find the best loan rate which is also the lowest interest rate for a Private loan which you can qualify for. The main reason for this is that these two loan schemes are generally known for giving reasonably low loan interest rates to their student applicants. Therefore. like the Stafford Loans. What needs to be done is to gain a detailed knowledge about all of them. An educational loan is a kind of a monetary support that has to be reimbursed on time. the loan interest rate of each of them varies from one another. Educational loan can be a vital element with your monetary assisting as a whole. In such cases. These loans are basically financed by the government. Perkins Loans. Out of the above mentioned three loan schemes. available for all students. because these loans are given to those applicants who are able to show that they have considerable financial need. and PLUS loans. the student loan rate of interest is decided by the government and controlled by the current financial system. before you decide which one of them suits you the best. There are various types of loan alternatives which can assist you. Eligibility for Private loans often depends on a student’s credit score.

There are various loans that are made by various schools. financing and scholarships. In the professional arena nowadays the basic criteria is the college study.com provides loans to the students and also to the parents. education overall has become expensive and beyond the reach of many. The repayment period for such loans mostly depend from lender to lender as well as on the overall amount that the student opts to borrow at first place. If you are worried about your school fee. Loan Bazaar provides all the students with educational loans which will aid them by making payments for their education fee and getting a suitable job with a handsome salary and satisfying future prospects. seeing the fact that there are many students those who are having different requirements and desires. government and private organizations.com also provide loans for the residence and help you bear the cost of the procedure of getting transferred from one place to another and for the interview or any conference. although there are certain exemptions to this rule too. all you have to do is fill up a Free Application for Federal Student Aid. majority of students are hesitant whether to take up a student loan for further education or not. This enables the students to get a suitable job and they can pay off their loans with ease. rewards. Loan Bazaar allows the students to reimburse the loan slowly and after completion of their graduation. helping them with their monetary issues. At Loan Bazaar. So we provide educational loans that can be a real asset in securing the future of the students. It is always advisable to borrow according to the need. college education or further studies. Educational loans can be termed as a type of a monetary assistance such as funding. Also. Also. have to be returned with some added interest. Majority of the student loans have low rate of interests and the students don’t have to make a paym ent for the interest till a specific time period. 6 .at a college or at a private school. don’t be! Loan Bazaar brings you the best schemes at the lowest price to make your dram education a reality by providing you best education loans. It should be noted that the interest price is dynamic and can change periodically. which when borrowed in cash. To take thousands of dollars as a loan to pay as an education fee seems a scary idea. there are a variety of educational loans created suitably for the students. We at TheLoanBazaar. TheLoanBazaar. majority of the loans enable the students to postpone or delay the payment of the loan by at least six months after completion of their graduation. Most of them provide very minimal interest price. Higher education seems out of reach to many these days.com. after all the other additional monetary assistances have been evaluated. This way the students can give all their attention to the studies and not towards the loan worries. Some are created on the basis of the needs and some are not. To be entitled for loans from TheLoanBazaar.

you may need a suitable co signer. like a parent. In case your child is currently studying and now working alongside. friend or any relative or eligible adult. previous school fee. TheLoanBazaar. Career education loans Career education loans are basically available for students who are attending the undergraduate career oriented programs at nationwide colleges and technical and trading schools.com to be used for education-related expenses. 7 . living expenses. books and other expenses like transportation costs. you may need a suitable cosigner. With quick application process and easy to fill up application form. getting could not get any simpler. like a parent. With quick application process and easy to fill up application form.com also offers competitive interest rates and flexible repayment terms. While the funds are sent directly to the student. wherein the repayment can also begin after graduation.The different types of student loans are offered by us. These are the type of unsecured loans offered by TheLoanBazaar. getting could not get any simpler. These are: Undergraduate student loans It is a type of unsecured loan offered by TheLoanBazaar. With quick application process and easy to fill up application form.com to be used for education-related expenses.com to be used for education-related expenses. While the funds are sent directly to the student. These are the type of unsecured loans offered by TheLoanBazaar. In case you are not currently earning while studying or do not meet our policies for eligibility criteria. you can take up the loan by being a co signer. friend or any relative or eligible adult. This type of undergraduate student loan includes your Tuition. Graduate/ professional students Graduate/ professional student loans are basically suitable for students who higher or advanced degrees at nationwide colleges. wherein the repayment can also begin after graduation. College parents loans It is a type of unsecured loan offered by TheLoanBazaar. friend or any relative or eligible adult.com also offers competitive interest rates and flexible repayment terms. you may need a suitable cosigner. wherein the repayment can also begin after graduation. TheLoanBazaar. While the funds are sent directly to the student. like a parent.com to be used for education-related expenses. In case you are not currently earning while studying or do not meet our policies for eligibility criteria. In case you are not currently earning while studying or do not meet our policies for eligibility criteria.com also offers competitive interest rates and flexible repayment terms. TheLoanBazaar. getting could not get any simpler.

private. books and other expenses like transportation costs. With quick application process and easy to fill up application form. It is basically available to parents and other adult relatives for their children who are attending non-public. getting could not get any simpler.This type of loan can help you assist your child with any kind of undergraduate/graduate or career education plan in college. 8 . wherein the repayment of principal and interest begins 30-60 days after the loan is laid out. previous school fee. you do not even have to keep collateral and do not have to sell away your homes. TheLoanBazaar. K 12 Parents loans It is a type of unsecured loan offered by TheLoanBazaar. living expenses.com to be used for education-related expenses. With quick application process and easy to fill up application form. books and other expenses like transportation costs. This type of undergraduate student loan includes your Tuition. investments money for the school and college fee of your child. living expenses. getting could not get any simpler. And what’s more.com also offers competitive interest rates and flexible repayment terms. While the funds are sent directly to you. religious. This type of K 12 Parents loans include your child’s tuition fee. uniforms. military elementary and secondary schools countrywide. previous school fee.

There is no need of paying the money during your time of study. It will make him financially adapted to the increasing financial needs during the time of his professional education. you can easily payback the amount to the lender in installments. The commitments involved in educational loans are very reasonable and this is the main reason behind the popularity of these loans. Disadvantages of Educational Loans: Almost all financial institutions that provide educational loan aims at increasing their profits and they are not that much concerned about the students. almost all banks will not disclose the provision of late fee. In the early days. students will not get a proper job after their studies. An educational loan can be considered as an effective alternative for conventional bank loans. they will hold the long term liability of stress due to these 9 . They offer reasonable interest rates and you will get a basic amount without any submitting any collateral. After completing the course. In many cases. There are many students who get trapped in unsuitable educational loans and the main reason behind it is lack of proper knowledge. Almost all the banks all over the world provide online application facility and this makes it a comfortable task. You can apply for an educational loan by visiting the bank in person or by visiting the online website of the bank. During this time. It will also help you to save income taxes during time of repayment. The application process for an educational loan is pretty easy. The repayment process is also very attractive. they will be under huge financial stress. Banks who provide educational loans used to charge an additional late fee if the amount is not repaid in time.ADVANTAGES & DISADVANTAGE OF EDUCATIONAL LOAN :Advantages of Educational Loans: An educational loan will help the student to join a course which he wishes to study. Also.

it is highly necessary to think twice before availing an educational loan.educational loans. So. and they will struggle a lot to cop up with their monthly financial needs. 10 .

Loan Bazaar provides students with education loans even if the government does not give much importance to the educational loans provided by private institutes and organizations.OBJECTIVES OF THE EDUCATION LOANS According to a survey approximately the number of students who will graduate in the year 2010 will be having a credit balance of 30. We at Loan Bazaar assist and guide the students what amount will be sufficient as an educational loan and what can be easily refunded. 000 pounds. Probably the students might not get a job with a decent salary for many years after completing their graduation. We advice you to always be aware of your sources while you make a decision about how much credit you need for your education. Sadly their salary will also not be sufficient for paying the balance they have gathered. You can also use some amount to pay the expenditure for your education if you are employed somewhere or have some amount saved. This can help for being sure that the amount you are getting financed for your education is not less. Adding to this a normal student opting for further education at university level will be having a credit balance of approximately 10. we provide the students the educational loans that will help them to pursue their graduation.000 pounds. So even if you are not able to meet the educational expenses with other financial assistance. Usually the federal educational loans are not sufficient to meet the expenses of the education as they have strict guidelines and have some precise time period to 11 . We provide various loans for the students and it can be used by both non conservative and usual students. We recommend that the approximation for the finance should always be more rather than minimal.

12 . The student just needs to fill an application on our website and with the details provided by you through the application. At a time. We have the best and trained professionals to assist you. The procedure for getting a student loan from us is hassle free and simplified. you are advised to take up an education loan rather than making your studies suffer the loss. If you have taken more than one loan then it is unsecured loan and the rate of interest is very minimal and you have to pay the same amount that you have borrowed as loan. On the other hand majority of the banks will offer you various interest free schemes hoping that you will be their regular customer when you will be employed somewhere and start earning.payback the loan. As a student. you can opt for and get only one loan. our experts will be getting best offers and schemes for you. It is evident that at times the scholarships and grants from centre are just not sufficient to meet the expenses while you are at the college level. The students take more than one loan and try to meet the daily needs. You can consult them anytime and that too without paying for it. Loan Bazaar provides different refunding options for the students so it becomes easier for the students to select from a range of options. Loan Bazaar provides you the best schemes for education purposes and suitable time period for the refunding the loans.

 The student loans that we offer have minimal rate of interest and can be easily afforded.  The online student loans from our website are more reliable and fast and it needs no governmental applications. theloanbazaar.com where our company’s professional will guide and assist you. Nowadays in the market there are various lenders and loan organizations those who provide college loans. and it gets approved quickly. so your bank accounts and home equity are safe. University can be very costly and even if you take suitable amount of loans.com for various kinds of student loans. it can take a long time to refund the loans even if you start earning. You can search online at our website. How to apply for student loans on internet? You can apply for the online student loan through our website.  We do not require any filling any forms and has minimal paperwork. theloanbazaar. 13 . Various lenders offer students handsome loan schemes and suitable refunding schemes. no fixed time period.  The main factor why online loans should be applied for is that these are unsecured loans. This is the reason that the students are recommended to take a decision only after a thorough study of the loan lending associations.WHEN. WHERE AND HOW TO APPLY FOR EDUCATIONAL LOAN Making a decision of further education after graduating from a high school is not an easy task.

Showing the balance and current rate of interest of student loans will also be required to get you online student loan. When to apply for a student loan? Following are some principles that have to be kept in mind while applying for some financial aid:  They should be applied for roughly three to four years before planning to join some college  Do sit in the PSAT (Preliminary Scholastic Aptitude Test). loans. and provides the students with suitable rate of interest. There are various kinds of financial assistance that we provide in the shape of grants.  By providing two personal referral names and you will be entitled for a student loan. and scholarships. It is advised that before applying for any online student loan you conduct a detailed survey of other companies and organizations offering online student loans.   Also required are your full details. Getting an online student loan at our The Loan Bazaar’s website is very simple as it takes lesser time period. minimal paper work. For getting a student loan you can choose suitable online student loan programs at our website.  Where to apply for online student loans? 14 . for that meet a Financial Aid Officer while you are in the college. name. and address. If you score good grades you probably be entitled of receiving a National Merit Scholarship.  Get to know different aids available.

so that you keep a track of the taxes you have paid. it will act as a key to all the grants and loans at the state level. Cross check what else is needed to maintaining eligibility to receive a financial aid. Keep a track of which financial aid form is required by the college and when the forms are due to submit. Make sure that you list your preferences for joining the schools. Confirm each and every office to make sure that the form is complete. 15 . Keep the copies of all the respective forms or applications that you submit.  Fill in the returns for the tax as soon as possible.   Do send mid year records to the school/college you have applied with.By filling a form free of cost at our website.

Grace period should not be misunderstood as a free period. TheLoanBazaar. your loans will still be collecting interest for the subsidized part. TheLoanBazaar. you can 16 . most of the financial experts are of the view that having private loans is better option than the federal aid for pursuing higher education. The private student loans help linking the gap between federal assistance and the actual price incurred for the higher education.com offers you a choice to start a consolidation procedure and select to maintain the grace period.com have the provision to extend the term for 30 years while you consolidate your student loans that can reduce your monthly payment to a great deal. These private choices can be beneficiary if they are used as complementary service rather than a substitute. The process for your application will be completed but will not be really funded once your grace period gets over. It straightway means that paying a higher rate of interest in the future. 2Minimal Monthly Payment Having a term for maximum number of years will only result in high payment on a monthly basis.com provides you with the best student consolidation plans with benefits such as: 1-Grace Period The students are given a time period of six months as a grace period prior to making the payment for your loan. Majority of the students prefer making a payment for the grace period as it increases their balance. Increasing the term for your loans will have both the positive and negative side.STUDENT LOAN CONSOLIDATION While advising the students. As there is no fine for the prepayment. but it is totally in your own hands. TheLoanBazaar. It does not matter whether you are making a payment or not.

6. Get familiarized with all the choices and schemes at our website while you are applying.Graduating Since you are at a school level you do not have to make a loan payment. We help you decide and getting the best rate of interest and to decide the best method to consolidate your loans.Plans for payment While having a loan from TheLoanBazaar. 8. 4. We assist you to make up your mind for student loan consolidation. We make sure that the consolidation gets you the majority of the savings. The students who work with low income and in the areas where they have to serve the public are entitled for loan forgiveness by TheLoanBazaar.Loan Excusing It entirely depends at what stage of degree you are in for getting entitled for a long forgiveness.Incentives on repayment We at TheLoanBazaar. Getting entitled for loan forgiveness is not affected by the consolidation. Consolidating them is the best option to fix the rate of interest on the loans.com. and extended payments.com there is some specific payment plan and generally it is a flat payment for the loan. Low payments of the consolidation can be of great help for the first couple of years till your graduation and till your salary matches with your education. As and when you become capable of full earning you can begin making large payments that will be helpful in reducing the term of your loans and help in cutting the rate of interest down.Majority of the student loans are on a variable rate but now it has slowly picked up pace for the last few years. to have less lenders will only assist your credit score and secondly you just have to make single payment in a month. The professionals at TheLoanBazaar. 7. 17 .Having different lenders Probably you will encounter with many creditors as you complete your graduation.make a payment for the loan anytime. 5. 3. You will get few advantages by consolidating them in one loan. You should be aware of those lenders who offer cash back incentives but generally they give you little savings in the future.com provide with repayment incentives. Having alternatives helps in making a plan to make the payment of the loans on time. Firstly.com suggest that having a consolidation lender will be quite beneficial and this way you will be less worried after you have left the school. income sensitive payments. Various repayment alternatives are provided by consolidation that consists of graduated payments.

Dena Bank HDFC Bank ICICI Bank Indian Bank Karnataka Bank Punjab & Sind Bank State Bank of India UCO Bank Andhra Bank Bank of Baroda Bank of Maharashtra Catholic Syrian Bank Centurian Bank of Punjab Corporation Bank Federal Bank HSBC Bank IDBI Bank Indian overseas Bank Oriental Bank Of Commerce PNB Saraswat Bank Union Bank of India 18 .EDUCATION LOAN BY BANKS IN INDIA Allahabad Bank Axis Bank Bank of India Canara Bank Central Bank of India City Union Bank Ltd.

National and State level policies are framed to ensure that this basic need of the population is met through appropriate public and private sector initiatives. Development of human capital is a national priority and it should be the endeavour of all that no deserving student is denied opportunity to pursue higher education for want of financial support. Knowledge and information would be the driving force for economic growth in the coming years. higher education is progressively moving into the domain of private sector.PLNFS.NO.12. While government endeavour to provide primary education to all on a universal basis. Based on recommendations made by a Study Group. IBA had prepared a Model Educational Loan Scheme in the year 2001 which was advised to banks for implementation by Reserve Bank of India vide circular No.4 lakhs and up to 19 . 2001 along with certain modifications suggested by the Government of India. The scope of education has widened both in India and abroad covering new courses in diversified areas. In line with the announcement made by the Hon'ble Finance Minister in his Budget Speech for the year 2004-05.BC.05/2000-01 dated April 28. With a gradual reduction in government subsidies higher education is getting more and more costly and hence the need for institutional funding in this area.GOVERNMENT OF INDIA MINISTRY OF HIGHER EDUCATION EDUCATIONAL LOAN SCHEME FOR PURSUING HIGHER STUDIES IN INDIA AND ABROAD 1.RPCD.83/06. INTRODUCTION Education is central to the Human Resources Development and empowerment in any country. Loans for education should be seen as an investment for economic development and prosperity. IBA had communicated certain changes in the security norms applicable to educational loans with limits above Rs.

it was decided to review the scheme and make modifications in the scheme to facilitate smooth operation at bank branches.1 Student eligibility: Should be an Indian National 20 . We have been receiving enquiries from members seeking clarifications on the various provisions of the scheme based on feedback received from the branches. Towards this.5 lakhs. a Working Group of General Managers drawn from select banks was constituted at IBA.Rs. 4. 7. APPLICABILITY OF THE SCHEME The scheme detailed below could be adopted by all Commercial Banks. With a view to ensure that the scheme is implemented in letter and spirit. This revised model scheme has been prepared based on the suggestions made by the Group. 2. 3. No deserving student is denied an opportunity to pursue higher education for want of financial support. OBJECTIVES OF THE SCHEME The Educational Loan Scheme outlined below aims at providing financial support from the banking system to deserving/ meritorious students for pursuing higher education in India and abroad. The main emphasis is that every meritorious student though poor is provided with an opportunity to pursue education with the financial support from the banking system with affordable terms and conditions. The scheme provides broad guidelines to the banks for operationalising the educational loan scheme and the implementing bank will have the discretion to make changes suiting to the convenience of the students/ parents to make it more customer friendly. ELIGIBILITY CRITERIA 4. The scheme details are as under.

B. the Institute should be recognized by the competent local aviation/shipping authority Courses offered in India by reputed foreign universities.. b. Dental. Law. Post Graduation courses : Professional courses : Engineering. if the course is pursued in India. IIT. CA. Regular Degree/Diploma courses like Aeronautical. Courses.. Post graduation: MCA. Evening courses of approved institutes. IISc. of Electronics or institutes affiliated to university. Courses like ICWA. Medical. Agriculture.Secured admission to professional/ technical courses in India or Abroad through Entrance Test/ Merit Based Selection process. approved by Director General of Civil Aviation/Shipping. individual banks may take a view to consider extending education loan under the scheme taking into account the future prospects/recognition by user institution.Com. Management. XLRI. Courses conducted by CIMA. etc. NIFT etc. MS. In case the course is pursued abroad./ AICTE/ AIBMS/ ICMR etc Courses offered by National Institutes and other reputed private institutions. 4. Other courses leading to diploma/ degree etc. Masters & Phd. Studies in India: (Indicative list) Graduation courses : BA. conducted by colleges/ universities approved by UGC/ Govt. CFA etc. Banks may have the system of appraising other institution courses depending on future prospects/ recognition by user institutions. shipping etc. etc. Computer etc. CPA in USA etc. Studies abroad Graduation : For job oriented professional/ technical courses offered by reputed universities. pilot training. Courses conducted by IIM. courses of reputed institutes accredited to Dept. 21 . B. MBA.2 Courses eligible a. Computer certificate Veterinary.London. which are not covered under the criteria mentioned above.Sc..

MARGIN UPTO RS.4. No security 22 . 7. 4 LACS NIL .Maximum Rs.00 lacs. thesis. India . 6.like study tours.10.Maximum Rs. 4 LACS STUDIES IN 5% INDIA STUDIES ABROAD 15% . .Margin may be broughtin on year-to-year basis as and when disbursements are made on a pro-rata basis.3 supported by Institution bills/receipts. etc. QUANTUM OF FINANCE Need based finance subject to repaying capacity of the parents/ students with margin and the following ceilings. subject to the condition that the amount for student .20 lacs ABOVE RS. project work. 5.Scholarship/ assistantship to be included in margin. SECURITY UPTO RS 4 LACS Co-obligation of parents.

securities/ Public Sector Bonds/Units of UTI. In case the loan is given for purchase of computer. life policy. bank deposit in the name of student/ parent/ guardian or any other third party with suitable margin. The security can be in the form of land/ building/ Govt. KVP. 8. waive third party guarantee if satisfied with the networth / means of parent/s who would be executing the document as "joint borrower". RATE OF INTEREST 23 . along with the assignment of future income of the student for payment of instalments Note:.4 lacs and upto Rs7. shares/mutual fund units/debentures. gold. in exceptional cases. Above Rs. The bank may. the computer has to be hypothecated to the Bank.The loan documents should be executed by both the student and the parent/ guardian as joint-borrower.7. Wherever the land/ building is already mortgaged.5 lakhs Co-obligation of parents together with collateral security in the form of suitable third party guarantee. at its discretion. NSC. the unencumbered portion can be taken as security on second charge basis provided it covers the required loan amount.5 lakhs Co-obligation of parents together with tangible collateral security of suitable value.Above Rs.

Penal interest to be charged as applicable to individual banks.Upto Rs 4 lacs BPLR Above Rs. The loan to be sanctioned as per delegation of powers preferably by the Branch nearest to the place of residence of parents. The loan to be disbursed in stages as per the requirement/ demand directly to the Institutions/ Vendors of books/ equipments/ instruments to the extent possible. whichever is earlier. where required. REPAYMENT Repayment holiday/Moratorium Course period + 1 year or 6 months after getting job. 10. the means of parent / guardian could also be taken into account to evaluate re-payment capability. while appraising the loan the future income prospects of the student will be looked into. No application for educational loan received should be rejected without the concurrence of the next higher authority. 24 . However. 4 lacs BPLR + 1% Simple interest to be charged during the Repayment holiday/ Moratorium period. APPRAISAL / SANCTION/ DISBURSEMENT In the normal course. 9.

13. if required. 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 Instalments (EMI) fixed. In case of studies abroad. FOLLOW UP/TRACKING: Banks to contact college/ university authorities to send the progress report to the bank at regular intervals in respect of students who have availed loans. 11.The loan to be repaid in 5-7 years after commencement of repayment. bank may obtain the Unique Identification Number (UIN)/Identity Card and note the same in the bank's records. PROCESSING CHARGES No processing/ upfront charges may be collected on educational loans for studies in India. If the student is not able to complete the course within the scheduled time. INSURANCE Banks may arrange for life insurance policy on the students availing Educational Loan. If the student is not able to complete the course for reasons beyond his control. For this purpose financial and other supporting documents may be obtained from applicant. 25 . 14. extension of time for completion of course may be permitted for a maximum period of 2 years. Individual Banks may work out the modalities with insurance companies 12. CAPABILITY CERTIFICATE: Banks can also issue the capability certificate for students going abroad for higher studies. 1% 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.

subject to margin and repaying capacity of the parent/student. d. 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. Top up loans Banks may consider top up loans to students pursuing further studies within the overall eligibility limit. In case of married person. Co-obligator The co-obligator should be parent(s)/guardian of the student borrower. Meritorious Students Banks which wish to support highly and exceptionally meritorious/ deserving students without security may delegate such powers to a fairly higher level authority. the 'family' as a unit has to be taken into account for considering the loan and security taken in relation to the total quantum of finance disbursed. banks may obtain a declaration/ an affidavit confirming that no loans are availed 26 .) 15. No Due Certificate No due certificate need not be insisted upon as a pre-condition for considering educational loan. b. with appropriate re-schedulement. However. the bank may provide in the system of noting the ‘address for correspondence' for tracking purpose. subject to taking required security. Multiple Loans In case of receipt of application for more than one loan for student borrower from a family. OTHER CONDITIONS: a. Change of Address In cases of student staying with parents and where such parents have transferable jobs or there is change in address. c. co-obligator can be either spouse or the parent(s)/parents-in-law .(Some of the foreign universities require the students to submit a certificate from their bankers about the sponsors' solvency/ financial capability. Minimum Age There is no specific restriction with regard to the age of the student to be eligible for education loan. f. e.

Flexibility in terms In order to bring flexibility in terms like eligibility. interest rates. Model Educational Loan Scheme The prime motive of the scheme is to benefit the "meritorious" students irrespective of their economic background. repayment tenure. The IBA defines meritorious students as " If the student has obtained admission to an eligible course through a merit based selection process. security norms." The banks have also enlisted the courses for which the loans would be available. 27 . but not exceeding the time norms stipulated for disposing of loan applications under priority sector lending. There has been a debate going off-late on whether the students getting admission undermanagement quota be given education loans or not. banks may consider relaxation in the norms on a case-to-case basis delegating the powers to a fairly higher level authority. norms pertaining to important facets of loan such as security/collateral.from other banks. margin et al are all covered under the scheme. Apart from eligibility of student and course. Disposal Application Loan applications have to be disposed of within a period of 15 days to 1 month. margin. moratorium period. though the list is not all inclusive . the bank reserves the right to sanction or reject the loan based on employability of the course. he/she could be considered a meritorious student. guarantee.

The deduction will be available for a maximum of eight years starting from the day you start paying back LOAN FEATURES :LOAN AMOUNT INTEREST RATE TENURE Repayment to start 1 year after course completion / 6 months after obtaining employment (whichever is earlier). 20 lakh for studies abroad. 10 lakh for studies in India and up to Rs.15 Lakhs for Education in India and upto Rs.  Tax Benefit.  For loans up to Rs. 40.000 (for both the principal and the interest). Loan available upto tenure of 7 years including moratorium period PREUpto 4% of the Principal Outstanding after 6 months of 28 Loans upto Rs.  The loans are to be paid back over a period of 5 to 7 years.Some of the key-features of educational loan scheme are mentioned below  The scheme provides loans up to Rs.20 Lakhs for Education abroad Information not available .The repayment of an educational loan is deductible under section 80E of the Income Tax Act. 4 lakh no security or margin is necessary and the interest rate is not to exceed the Prime Lending Rates (PLR). Only loans borrowed for higher education ( full time studies in any graduate or post-graduate. For loans above Rs. The annual limit for deduction is Rs. professional. 4 lakh the interest rate will not exceed PLR plus 1 percent. and pure and applied science courses) may claim deduction. there is provision of grace period of 1 year after completion of studies.

PAYMENT CHARGES Service Charges repayment Processing Fee: Upto a maximum 2% of the loan amount 29 .

Documents Required education loan India The following documents are required along with your loan application: Purpose Salaried Passport or Voter's ID card or Proof of identity Others Passport or Voter's ID card or driving license or PAN card IT returns for the last 2 years and computation of income for the last 2 years certified by a CA Bank account statement Bank account statement or latestor latest electricity bill Proof residence electricity bill or latest mobile oror latest mobile or of telephone bill or latest credit cardtelephone bill or latest statement or existing house leasecredit card statement or agreement existing agreement Bank statement or Pass Book where salary orLast 6 months income credited Guarantor form Optional Other Documents Optional is Last 6 months house lease driving license or PAN card or government department ID card Latest salary slip showing all Proof of income deductions or Form 16 along with recent salary certificate Copy of admission letter of theCopy of admission letter Institute along with 30 Feesof the Institute along .

mark sheets / passwith certificates of S.schedule.C.S.35 yrs Income Criteria Not Available Income Criteria Not Available Information not available Job Experience Information not available Residence Proof Valid Residence proof Valid Residence proof 31 .35 yrs Self 16 .S.C. H.C . Degree courses Eligibility Criteria : Education Loan Salaried Age Income 16 .S. certificates of H.mark Degree courses Fees sheets schedule. / pass S.S.C .

Docs Required : Education Loan Salaried Self Co-Applicants Passport Copy/ Co-Applicants Passport Copy/ ID Proof Voters ID card/ of Driving Voters ID card/ of Driving PAN Licence/Copy PAN Licence/Copy Card/Other valid ID Passport/Voters License/Latest Card/Other valid ID ID/Driving Passport/Voters Electricity License/Latest ID/Driving Electricity Address Proof bill/Latest Landline Telephone bill/Latest Landline Telephone Bill/Any other Valid Address Bill/Any other Valid Address proof DOB Proof Birth Certificate proof Birth Certificate Self Employed (Professionals) : Co-Applicant Individual: Latest 6 Months Bank Financial Docs Statement Account of the Salary Last 2 Years Audited Balance Sheet Last 6 Months Bank Statement carrying date of joining details Proof of Turnover (Latest Sales / Service Tax Return) Salaried Self Employed : Last 2 Year ITR with Computation of Income 32 .

Self Employed .Professional :  Last 2 Year ITR with Computation of Income  Last 2 Years Audited Balance Sheet / P& L   Last 6 Months Bank Statement Proof of Qualification 33 .Professional : Last 2 Year ITR with Computation of Income Last 2 Years Audited Balance Sheet / P& L Last 6 Months Bank Statement Proof of Qualification Self Employed :  Last 2 Year ITR with Computation of Income  Last 2 Years Audited Balance Sheet   Last 6 Months Bank Statement Proof of Turnover (Latest Sales / Service Tax Return) Self Employed .

per event re-booking Upto Rs.a. 1000/- charges / Re-scheduling Bounce Cheque Charges Upto Rs.OTHER CHARGES:.EDUCATIONAL LOAN Description of Charges Amount of Charges No Due Certificate / No Objection Nil Certificate (NOC) Solvency Certificate Charges for late payment of EMI Not applicable @ 24 % p. 500/. 450/. on amount outstanding from date of default Credit assessment charges Non standard repayment charges Cheque swapping charges Loan cancellation / Not applicable Not applicable Upto Rs.per Bouncing Stamp Duty and other atatutory As per applicable laws of the state charges Legal / incidental charges At actual 34 .

Driving license. * ID Proof: Photo Pan Card. * Age proof: Bitrth Certificate or 10th Class passing Certificate.In addition to the above list of documents: * Letter from the Head Of Department of the University. Driving License or Voter's ID card. year-wise and any other expenses. * Cost break up of the program from the Institution stating the Tuition feesterm-wise. * Declaration/Affidavit confirming that no loan has been availed from other Bank/Institution. while processing the fresh disbursement tranch. * I-20 in case of applicant going to the USA. 35 . * GMAT/GRE/SAT score. Passport. * Students entire academic record in the form of marksheets starting from class X to the last qualifying exam cleared. Documents for Studies Abroad .Documents from Student * Completely filled Application Form with Photographs. * Signature Proof: Bank Signature Verification. Voter's ID Card. Driving License or Voter's ID card. * Travel papers. * Address Proof: Passport. * Visa approval papers. * Letter of admission from the Institute. Ration Card. Bank statement. Passport. Photo Pan Card. * Progress reports in the form of mark sheets or a letter from the Institute.

*Sole Propieter Declaration Or Certified Copy of Partnership Deed. Rental agreement. * Address Proof: Ration card Telephone or electricity/water Bill. *Proof of continuation of business :Trade licence /Establishment /Sales Tax certificate. B/S & P&L a/c for the last 2 yrs.Documents for Co-Applicant if Salaried: * ID Proof: Photo Pan Card. Trade licence /Establishment/Sales Tax certificate. * Latest salary slip or current dated salary certificate with latest Form 16 Documents for Co-Applicant if Self employed (Professionals/Individual ): * ID Proof: Photo Pan Card. Documents Required Post Loan Sanction: * Education Loan Agreement. Driving License or Voter's ID card. Passport. Driving License or Voter's ID card. Passport. Passport copy. certified by a CA. Rental agreement. AOA & Board resolution. *Qualification proof of the highest professional degree. Passport. * Latest ITR along with computation of income. * Bank Statements for last 3 months. Certified Copy of MOA. 36 . * Address Proof: Ration card Telephone or electricity/water Bill.

* Post Dated Security Cheques as per Bank Policy. 37 .* SI/ECS Mandate as applicable.

HDFC bank. Interest rates The first and the foremost is the interest rates charged on the education loan. Be it SBI. leading banks in India are more than willing to be a part of your dream. This interest rate is the primary factor that earns money for banks and so they want it to be higher.The best education loan from banks in India: 6 factors to compare Is pursuing a course of your choice abroad one of the priorities of your life? Do you want to be among the top notch professional with a reputed foreign university degree under your belt? Chances are good that to fulfill all these aspirations you will need an educational loan. ICICI bank. The innovative products offered by these banks have simple terms and provide the much needed financial assistance in a very short period of time. 1. what all things should you keep in mind while applying for an educational loan from banks in India? Here are the 6 most important factors that you should compare before taking any education loan from banks. Staying and living abroad along with the payment for your choice of course require a huge amount of money. With the recent spurt in global economy these costs are rising even further. and private sector banks. Citibank. Bank of Baroda. but the competition in the loan market makes the bank keep 38 . AXIS bank and other Govt. all are lined up to provide an education loan to the deserving aspirant. With all these banks competing to provide an educational loan for your choice of course. However.

The interest rates charged on loans thus keep accumulating until you start the repayments. Generally. Whether the interest rate charged on your education loan is fixed or floating is also a matter of concern. Banks providing education loans generally don't expect the student to pay until he 39 . The interest rates also depend on the amount of education loan one wants. but they start charging the interest immediately after the disbursal of the loan. The waiver period The third most important thing to watch out is the waiver period. while it earns money for the banks too. 2. a judicious comparison of various offers from leading banks will certainly help the student find an education loan that pinches the least.it to a level where the education loan seems affordable to the customer. 3. How this interest is charged will determine the amount of interest you will pay. or on a quarterly reducing balance. Going for floating interest rates in this low interest regime is always a better option. This can significantly increase the repayment burden. Enquire carefully whether it is charged on a daily reducing balance. keeping in mind all the realistic requirements. How the interest is charged? Though the banks defer repayments. the value of fixed interest rates is higher than the floating interest rates. If the bank providing education loan gives an option to pay the interest portion of your education loan immediately. use it by all means.

40 . Collateral. The down payment A down payment also has to be made with every education loan. documentation costs etc. does your education loan provider gives you such an option? The whole idea is to get comfortable financially before the bank asks you for a repayment. This figure can vary from bank to bank but it is generally a norm. 5. Make sure to ask the bank about collateral requirements and have it ready before the disbursal of loan. guarantee or security There is a collateral clause with all the educational loans from banks in India provided the education loan exceeds a value of 4 lacs.gains employment after completion of the course. administrative fees. 4. should be minimal. Fees and other costs The fees associated with the education loan such as processing fees. 6. ranging between 5%-20% of the loan amount depending on banks this money has to be paid upfront. Check this out carefully.

“Any loan considered by banks for students getting admission under the management quota would be outside the model scheme. had recommended of creating a credit guarantee fund to tackle the problem of rising defaults in the loan category of up to Rs4 lakh.5 lakh. given without any security or collateral. confirmed that. “It is left to each bank to decide on the lending to students under the management quota. State Bank of India.” IBA said in a guidance note. say that there is need to address the issue of lending to students under management quota as it might impact large number of students opting admission through this route. which has formulated the model education loan policy. Banks may fix appropriate terms and conditions for such loans. and for a loan above Rs7. IBA asked lenders to impose stricter terms on loans given to students getting admission under the management quota. 41 . The RBI has sought comments on the report of the Committee. has recommended an increase in lending limit for education loan by Rs5 lakh. chairman. country head of Credila Financial Services. a private lender specializing in education loans. banks lend up to Rs4 lakh without any security. After the apex bank eased its monetary policy. We are looking into it.” An official of Mumbai-based public sector bank. Union Bank of India. Non-performing assets (NPAs) in education loans are as high as 6%. “Though the move is in the right direction considering the risk factors from the poi nt of view of the lender. which has seen 16%-17% growth in the education loan portfolio. Experts. from existing limit of Rs10 lakh and Rs20 lakh. the government is considering the option of setting up a credit guarantee trust. But for loans between Rs4 lakh and Rs7. There is no suggestion on the lending up to Rs4 lakh. Recently. largest public sector lender. It won’t come under the IBA policy. there is a need for risk-management framework for lending to these average students. To bring down NPAs in education loans. announced an interest rates cut on education loans up to 1%.” According to the current guidelines. SBI. announced an interest rates cut on education loans up to 1% The committee constituted by the Reserve Bank of India (RBI) to re-examine the existing classification and suggest revised guidelines for the lending to the priority sector. in a report suggested to that limit under priority sector for loans for studies in India may be increased to Rs15 lakh and Rs25 lakh in case of studies abroad. largest public sector lender. Last year. Redefining the scope of education loans by removing the limits and fixing it on the basis of parents’ income. Experts say that this category also has highest number of repayment defaults. a collateral is required. covering vocational and skill development under its ambit and establishing a credit fund to cover the risk of defaults were some of the suggestions received by the committee. Meanwhile. respectively. the Indian Banks’ Association (IBA).Increase education loan lending: Nair Committee recommendations Banks are concerned as non-performing assets in education loans are as high as 6%. they can ask for personal guarantees. The committee headed by MV Nair.5 lakh. I cannot commit anything right now. According to Prashant Bhonsale. The committee has said that it is under consideration.

etc offered by reputed universities Expenses considered for loan • • Fees payable to college/school/hostel Examination/Library/Laboratory fees 42 . Studies abroad: • Job oriented professional/ technical Graduation Degree courses/ Post Graduation Degree and Diploma courses like MCA. etc • • Regular Degree/ Diploma Courses conducted by autonomous institutions like IIT. A separate scheme for ‘Loans for Vocational Education and Training’ has been launched which covers financing for such Vocational courses b. IIM etc Teacher training/ Nursing courses approved by Central government or the State Government • Regular Degree/Diploma Courses like Aeronautical. Eligible Courses a. 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. Studies in India: • Graduation. pilot training. shipping etc. Post-graduation including regular technical and professional Degree/Diploma courses conducted by colleges/universities approved by UGC/ AICTE/IMC/Govt. MBA.SBI BANK A term loan granted to Indian Nationals for pursuing higher education in India or abroad where admission has been secured. MS.

pilot training. Studies in India: • Graduation. Amount of Loan • • For studies in India. project work etc. maximum Rs. A separate scheme for ‘Loans for Vocational Education and Training’ has been launched which covers financing for such Vocational courses b.000/- Any other expenses required to complete the course like study tours. etc • • Regular Degree/ Diploma Courses conducted by autonomous institutions like IIT. Studies abroad: 43 . Post-graduation including regular technical and professional Degree/Diploma courses conducted by colleges/universities approved by UGC/ AICTE/IMC/Govt. IIM etc Teacher training/ Nursing courses approved by Central government or the State Government • Regular Degree/Diploma Courses like Aeronautical. shipping etc. Eligible Courses a. 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.• Purchase of Books/Equipment/Instruments/Uniforms. 10 lacs Studies abroad. 30 lacs term loan granted to Indian Nationals for pursuing higher education in India or abroad where admission has been secured. 50.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. Purchase of computers. maximum Rs.

000/- Any other expenses required to complete the course like study tours.• Job oriented professional/ technical Graduation Degree courses/ Post Graduation Degree and Diploma courses like MCA. 30 lacs Processing Fees • No processing fee/ upfront charges • Deposit of Rs. Amount of Loan • • For studies in India. MBA. 10 lacs Studies abroad. 50.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. project work etc. Purchase of computers.for education loan for studies abroad which will be adjusted in the margin money Repayment Tenure 44 . maximum Rs. MS. maximum Rs. 5000/. 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.

50 lacs loan amount security Parent/ Guardian as co-borrower and tangible collateral In case of married person.Repayment will commence one year after completion of course or 6 months after securing a job. 7.0 lacs: Studies in India: 5% 45 . whichever is earlier. 7.4.0 lacs : No Margin For loans above Rs.4. co-obligator can be either spouse or the parent(s)/ parents-in-law Margin • • o For loans up to Rs. 4 Lacs and upto Rs. 7.5 Lacs 5-7 years Above Rs. 4 lacs to Rs.50 lacs loan amount Parent/ Guardian as co-borrower and Collateral security in the form of suitable third party guarantee*. 4 lacs loan amount Above Rs. Above Rs. *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.5 Lacs Upto 12 years Security Particular Security Only Parent/ Guardian as co-borrower Upto Rs. 7. 4 Lacs 5-7 years Above Rs. Maximum Loan Limit Repayment Period Upto Rs.

of last 2 yrs (If IT Payee) Brief statement of assets and liabilities. 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. • Secured admission to professional/ technical courses through Entrance Test / Selection process. • • • • Secured admission to foreign University / Institution.10.o Studies Abroad: 15% Documentation Required • • • • • • • • • • Completed Education Loan Application Form.00 lacs Studies abroad .e.20. Mark sheets of last qualifying examination Proof of admission scholarship. Eligibility • Student Should be an Indian National. Salary slips/ Form 16 etc.00 lacs 46 . of the Co-borrower Proof of Income (i. if applicable) Purpose To extend financial assistance to all eligible / deserving / meritorious students for pursuing higher education in India & Abroad.Maximum Rs.Maximum Rs. Amount of finance Need based finance subject to repaying capacity of the parents / students Studies in India .

3. 4.to be collected at the time of delivering sanction letter to the student / guardian. Margin may be brought in on year to year basis as and when disbursements are made on a pro-rata basis. 47 .No Security (Co-obligation of parent / guardian is compulsory). Penal rate of Interest: @2% on all irregular Education loans above Rs.1000/. Above Rs.4000/.50 Lacs: .5% AND Studies Abroad .4. 4. 4.4.Margin money: Upto Rs. whichever is earlier.NIL Above Rs.00 Lacs for the over due amount and over due period.00 Lacs Studies in India: .50 Lacs: Collateral in the form of a suitable third party guarantee. Security Norms Upto Rs. 5 to 7 years after commencement of repayment.Collateral security of suitable value or Co-obligation of parents / Guardians / third party guarantee along with the assignment of future income of the student for payment of installments. Rs.to be adjusted towards student's margin at the time of release of the loan.00 Lacs .7.4.4000/.00 Lacs . the amount of Rs.00 Lacs and upto Rs. Above Rs.15% Scholarship /assistantship to be included in margin. No processing charges to be levied on the loans to the wards of Bank's staff members including Retired Staff.4. 1. Repayment Period :Course period + one year or six months after getting job.4. In case the loan is not availed for any reason by the student. 2.7. Processing Charges: No processing charges for studies abroad upto Rs. 5000/.00 Lacs and in case of studies in India irrespective of loan amount. Rs.00 Lacs for studies abroad. Rs.to be appropriated towards processing fees. In case of loans above Rs.to be refunded to the student without interest.

AXIS BANK
Axis Bank's Education Loan aims to provide the much needed financial support to deserving students for pursuing higher professional or technical education in India and abroad. The education loan would be provided to those students who have obtained admission to careeroriented courses e.g. medicine, engineering, management etc., either at the graduate or postgraduate level. We believe, given the right tools and aid every child has the potential to be successful. Our education loans aim to be the very tool that will enable them to reach their goals in life. No more would a deserving student have to give away their pursuit of dreams due to lack of money. Our student loans will ensure that worthy students are empowered to take their destiny in to their own hands. Our endeavour is to help the future of our nation in education and prosperity.
Quantum of Loan

The quantum of finance under the scheme is capped at Rs 10.00 lacs for studies in India and Rs 20.00 lacs for studies abroad, which would cover tuition fees, hostel charges (if any), cost of books, etc. The minimum amount of education loan would be Rs 50,000.
Margin

No margin for education loans upto Rs 4 lacs. For loans above Rs 4 lacs, 5% margin for studies within India and 15% for higher studies overseas. Tax benefits:
If you have taken an education loan in order to support higher education for yourself, spouse, or children, then you should be aware of the tax benefits that you are entitled to. Following are the points that will help in knowing the tax benefits available on education loan. Tax benefits help reduce the cost of education and also lessen the pressure on savings that occur due to EMI payments.
Deduction u/s 80 E

Section 80 E provides deduction with respect to interest paid towards repayment of the education loan. There is no cap on the maximum amount that can be claimed as tax benefit u/s 80 E. This section is particularly beneficial for those who are in the higher tax bracket.
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Since the deduction is available for the full interest cost; for those in the highest tax bracket i.e. in the 30% tax bracket, the effective cost will reduce by 30%. Applicable Conditions 1. Deduction is allowable only to the individual assesse and not HUF 2. There is no maximum cap on the interest amount that can be claimed for the deduction. However there is no tax benefit available on the repayment of principal. 3. Deduction is available if the interest has been paid for the same year i.e. previous year 4. Interest on loan taken from relatives and friends will not be eligible for deduction u/s 80 E 5. Loan should have been taken for pursuing higher education either for self, spouse, children or for those for whom the assesse is a legal guardian 6. Loan amount is not restricted to tuition fees and college fees but can also include other expenses like transportation, hostel charges etc. 7. Education can be pursued anywhere in the world and not is restricted to India Loan Structure Maximum amount of loan available for education in India is Rs. 10 Lacs and Rs. 20 Lacs for education abroad. For loan upto Rs. 4 Lacs no margin money is required, however for loan above Rs. 4 Lacs, 5% margin money shall be applicable in case of education in India and 15% for education abroad. Margin money represents the partial allocation from the borrower’s si de with respect to the tranche due. For example for fee due of Rs. 1 Lac if the margin money is 5% then the borrower/his family will be required to pay Rs. 5,000 and remainder 95% will be borne by the bank/lender. Different banks/lenders have various clauses and conditions when it comes to providing security towards the loan borrowed. However following is a typical example.

Loan repayment starts after 6 months of getting a job or one year of completion of education which ever is earlier. Simple interest is levied during the education and moratorium period. post which compounding interest is levied on the outstanding loan amount. Documents Required

     

Loan application on Bank's format Passport size photograph Proof of Address Proof of Age Proof of having cleared last qualifying examination Letter of admission in professional, technical or vocational courses

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    

Prospectus of the course wherein charges like Admission Fee, Examination Fee, Hostel Charges etc. are mentioned Details of Assets & Liabilities of parents/co-obligants/guarantors In case loan is to be collaterally secured by mortgage of IP, Copy of Title Deed, Valuation Certificate and Non Encumbrance Certificate from approved Lawyer of the Bank to be obtained at the cost of the borrower Photocopy of Passport & Visa, in case of study abroad Copy of PAN of student Borrower (If PAN is not available at the time of sanction, the same be obtained within one year of disbursement of loan).

Axis Bank's Study Power aims to provide financial support to deserving students for pursuing higher professional or technical education in India or abroad. The loan would be provided to students who have obtained admission to career-oriented courses eg, medicine, engineering, management etc., either at the graduate or post-graduate level.

Loan Feature  Loan Amount Rs 10 lacs for studies in India and Rs 20 lacs for studies abroad, which would cover tuition fees, hostel charges (if any), cost of books, etc. The minimum amount of loan would be Rs 50,000.  Interest Rate 16% to 17% (0.5% relaxation for girl child) Tenure Information not available

Pre Payment Charges No Prepayment charges to be levied on the outstanding loan amount. Service Charges Nil

Eligibility Criteria : Education Loan ________________________________________ Salaried Age Self

No Age Criteria Provided No Age Criteria Provided
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C .S.Income Income Criteria Not Available Income Criteria Not Available Information not available Information Not Available Information not available Information Not Available Job Experience Residence Proof Docs Required : Education Loan ________________________________________ Salaried ID Proof ID Card Self Passport/Voters ID card/Driving Licence/Copy of PAN Card/Govt Passport/Voters ID card/Driving Licence/Copy of PAN Card Address Proof Ration Card/Passport/Latest Electricity bill/ Latest telephone bill/Latest credit card bill bank statements/Last 6 months bank statements/Existing House Lease agreement Ration Card/Passport/Latest Electricity bill/ Latest telephone bill/Latest credit card bill bank statements/Last 6 months bank statements/Existing House Lease agreement DOB Proof Information not available Financial Docs • Salaried Individual: Information Not Available Bank Statements or passbook for last 6 months where salary is credited. mark sheets/pass certificates of S. H. mark sheets/pass certificates of S.C .C. Degree courses • • • Photographs of both the co applicant and the student Bank Statement or passbook for last 6 months ITR/valid Income documents certified by CA. H. • Latest salary slip showing all deductions or Form 16 along with recent salary certificate • Copy of admission letter of the Institute along with Fees schedule.S.C.S.S. Self Employed: • Copy of admission letter of the Institute along with Fees schedule. Degree courses 51 .

52 . these limitations are as follows – • Time limitation • Many banks provide education loan but in this research only three banks aretaken for consideration.• Photographs of both the co applicant and the student. LIMITATIONS: There are some limitations in this research. • Expenditure on research • Some banks are not provided their internal circular / information.

4.e.50 Lacs Loans above Rs. 12. 7. Law.Name of Bank Axis Bank Eligibility • Axis Bank's Study Power aims to provide financial support to deserving students for pursuing higher professional or technical education in India and abroad.a Name of Bank State Bank of India Eligibility • Should be an India National • Secured admission to professional/ technical courses through Entrance Test/ Selection process • Secured admission to foreign university/ Institution Loan Amount & Rate of Interest Studying in India . 11.Max Rs.a.00% above SBAR i.00% p.. 10 Lacs Studying Abroad . 50.a. 20 Lacs The current Prime Lending Rate (PLR) with effect from Jul 13.75% p. Dental. etc • Post Graduation courses : Masters & Phd • Professional courses : Engineering. Medical.. Documents Required • Completed Education Loan Application Form. 4.Sc. Loans above Rs. 7.25% p. management etc. Up to Rs. either at the graduate or post-graduate level. Computer etc Expenses covered • 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 Documents Required India: • Identity Proof: Copy of Passport / Driving Licence / Voters 53 .Max Rs..75% p. studentship etc Tenure of Loan The loan to be repaid in 5-7 years Courses Covered • Graduation courses : BA. 2009 is 14.e. • Mark sheets of last qualifying examination • Proof of admission scholarship.50% below SBAR i. Expenses covered • Fees payable to college/school/hostel • Examination/Library/Laboratory fees • Purchase of Books/Equipment/Instruments/Uniforms • Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tuition fees for the entire course) • Travel Expenses/Passage money for studies abroad • Purchase of computers considered necessary for completion of course • Cost of a Two-wheeler up to Rs.Com. Veterinary. • Graduation courses/ Post graduation courses/ Professional courses • Other courses approved by UGC/Government/AICTE etc. 10 Lacs Studying Abroad . engineering. B. Tenure of Loan The loan to be repaid in 5-7 years Courses Covered All courses having employment prospects are eligible.a.00 Lacs and 1. Agriculture. • The loan would be provided to students who have obtained admission to career-oriented courses eg. 20 Lacs Loan Amount Rate of Interest Loans up to Rs. Loan Amount & Rate of Interest Studying in India .00 Lacs 0.Max Rs. 11. Management. medicine.000/Any other expenses required to complete the course like study tours. project work etc.Max Rs.e.50 Lacs At SBAR i. B.

11.e.400005 Phone 54 .a. • Signature Verification. • One Singed Photograph (On the face). 4. 7. 10 Lacs Studying Abroad .a. of the Coborrower • Proof of Income (i.Identity Card / Income Tax Pan Card. Mumbai .e. • Copy of last examination passed result. along with the tuition fees and other recurring charges • Further.00% above SBAR i. Tenure of Loan The loan to be repaid in 5-7 years Courses Covered All courses having employment prospects are eligible.Max Rs.75% p. Maker Tower . Cuffe Parade. Abroad: • Offer / Admission / Bonafide student letter from the university / college in India or Abroad. 20 Lacs Loan Amount Rate of Interest Loans up to Rs. Up to Rs. Expenses covered • Fees payable to college/school/hostel • Examination/Library/Laboratory fees • Purchase of Books/Equipment/Instruments/Uniforms • Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tuition fees for the entire course) • Travel Expenses/Passage money for studies abroad • Purchase of computers considered necessary for completion of Security • Third party guarantee and/or collateral security may be asked for in appropriate cases • Assignment of LIC policy in favour of the Bank for the sum assured being at least 100% of the loan amount. 4. • Copy of Passport in case of study abroad. 12. 11.00 Lacs and 1. 7.e.F.Max Rs. of last 2 years • Brief statement of assets and liabilities. Colaba. • Schedule of expenses for the specified course • 2 passport size photographs • Borrower's Bank account statement for the last six months • Income tax assessment order.50% below SBAR i. • Graduation courses/ Post graduation courses/ Professional courses • Other courses approved by UGC/Government/AICTE etc.50 Lacs At SBAR i.75% p.25% p. the annual premium may be included in the computation of the loan requirement. The policy is kept alive during the currency of the loan • To ensure this. 131.50 Lacs Loans above Rs. • Cost of the Course (including living). the future income of the student needs to be assigned in favour of the Bank for meeting the instalment obligations Area of Operation Pan India Presence Address Axis Bank Limited. • Residence Proof : Copy of Passport / Driving Licence / Voters Identity Card / Utility Bills • Age Proof: Copy of Passport / Driving Licence / Income Tax Pan Card / Birth Certificate. Salary slips/ Form 16 etc) Name of Bank State Bank of India Eligibility • Should be an India National • Secured admission to professional/ technical courses through Entrance Test/ Selection process • Secured admission to foreign university/ Institution Loan Amount & Rate of Interest Studying in India . Loans above Rs.e.00 Lacs 0.a.

7.50 lacs Tangible collateral security of suitable value. in exceptional cases. weive third party guarantee if satisfied with the net-worth/means of parent/s who would be executing the documents as "joint borrower".com course • Cost of a Two-wheeler up to Rs. project work etc. 50.axisbank. All loans should be secured by parent(s)/guardian of the student borrower. 4 lacs Collateral security in the form of suitable third party guarantee. 4 lacs Above Rs. along with the assignment of future income of the student for payment of installments. Mode of repayment Repayment will commence one year after completion of course or 6 months after securing a job. studentship etc • Schedule of expenses for the specified course • 2 passport size photographs • Borrower's Bank account statement for the last six months • Income tax assessment order. of last 2 years • Brief statement of assets and liabilities. Salary slips/ Form 16 etc) Amount Up to Rs. Documents Required • Completed Education Loan Application Form. at its discretion. • Mark sheets of last qualifying examination • Proof of admission scholarship.e.000/Any other expenses required to complete the course like study tours. Above Rs. of the Coborrower • Proof of Income (i.022-67074407 Website www. The bank may. whichever is earlier. Area of Operation Pan India Presence Address 55 Security No Security .

statebankofindia.State Bank of India.co. Bhadra. lhoahm@sbi. Local Head Office.in Website www.com 56 . Ahmedabad-380 001 Phone 079-25510883 079-25506648 Email helpline.

Excerpts from an interview with TOI: SBI has tightened income criteria for car loans. it would be really tough to meet other living expenses like rent. "Assuming a take-home of Rs 70. could compound the miseries of the borrower. said. duration and university .000 per month. The bank recorded its highest ever profit of Rs 14. said. director. "Either the student would have to take a topup loan or cough up from his or her own resources. Education loans a problem at sub-6% growth. students will have no choice but to head back to India after completing their course. The sell-off in bank stocks resulted in SBI losing its position as the most valuable bank but Chaudhuri reaffirmed its fundamentally strong image by bolstering Tier-I capital adequacy to well over 9% and providing for pension liabilities. coupled with the tepid job market in India. Home loans are different because it is against property and it also enhances the borrower's income 57 .105 crore.000.5% to 14.NEWS The rate on educational loans ranges from 11.000 pounds for a visa to crack down on illegal immigration. Transcend Consulting." Sanjoy Sircar. And with countries like UK imposing restrictions on work visa after studies as well as a bond of 3. Students who have taken a loan earlier for a masters programme and have completed their course and got a job in the US would now have to remit fewer dollars in EMIs towards the rupee loan taken back home. But there is some silver lining too. transportation . Great Lakes Institute of Management ." Kartik Jhaveri. Will you do this for all retail loans? We have done this for auto loans as we feel that those with higher income are less likely to default. which for a Rs 30-lakh loan would translate into an EMI of Rs 50. etc. This. professor of finance. but this was marred by a surge in bad loans.25%. depending on the course.000 per month on a Rs 10-lakh offer and with an EMI of Rs 50. SBI chief says MUMBAI: Pratip Chaudhuri's tenure as SBI chairman has been one of extremes.

"RBI's assistant general manager Sharmila Sampath Kumar has sent me an email on August 28 stating that the issue is receiving the attention of the central bank. Now I have to pick the cheapest country and also one that gives me opportunities to earn while I study. 2 million to Rs. This year. to spread interest payments over a longer period and reduce the cost. As of March 2013. the loan limit had not changed since 2001 when the exchange rate was Rs25 to Rs30 to the US dollar.509.through rentals or savings in rent. It also insists that students repay their dues. Ankur Sarthi. convenor. RBI looking into the issue of SBI shaming students C HENNAI: The Reserve Bank of India (RBI) is looking into the complaint against State Bank of India (SBI) for shaming students and their parents for defaulting on their education loan. Falling rupee raises restrictions for loans to study abroad We all are aware of the falling rupee. 3 million on education in a world-class Institution but struggles to get a well paying job. Education loans will become a problem if. If a student spends Rs. up from 2% in 2008. is the education worth it?" The source also highlights India's slowing economic growth and a cloudy jobs outlook in the last four years has raised fear of risky loans. said here Wednesday. According to few reports. Now. That is why we have extended the tenure of our education loan from five to twelve years. 2 million (US $ 36." It is common for students to apply for a student loan several months in advance for taking up a place overseas. a maximum loan could cover an Indian student's full education costs in most countries. According to source. the economy does not grow at 6% as enough jobs won't be created and also employment would come at lower salaries. Moreover." K Srinivasan. students who dream of studying abroad are left with fear and disappointment. Sarthi secured a loan two months ago.465 Education loan accounts with a total amount outstanding of Rs5. We hope the government brings in the guarantee scheme for education loans. In 2001." Sarthi said. a Rs. 515km from here. there were 2. "I had applied to universities across multiple countries. "You have to look at the return on an expensive higher education abroad.500) ceiling on loans for overseas education is making this difficult. there is a raise in restrictions for obtaining the educational loans to study abroad. displayed photos of students and their parents for 58 . Over 5% of outstanding student loans had turned bad. a final year undergraduate student at Delhi university said. Some students are seeking extra bank loans. banks are contemplating and extending the repayment period of loans taken to pursue higher Studies abroad. while the rupee has depreciated around 20%. The Bodinayakanur branch of SBI in Theni district. education loan task force (ELTF). going forward. as compared to around Rs50 now. while the number of students seeking loans has gone up significantly. A senior official at a public sector bank asked.352 billion. "I have already secured a Rs2 million loan from a national bank and I was denied any additional amount. However. ELTF guides students on rules and regulations governing the education loans offered by nationalised banks. which is barely enough for one year.

senators said Thursday." Srinivasan in his complaint to RBI said SBI's total advances as on March 2012 were Rs 7. The non-performing assets (NPA) under education loan portfolio would be around Rs 400 crore or two/three per cent as against the total NPA of Rs 37.156 crore . By Philip Elliott. Not worrying about these.8 percent on Monday. 59 .000 accounts.4 percent to 6. Srinivasan said in his complain. VCK and others had condemned the SBI's action. "When several money sharks are cheating banks of thousands of crores of rupees by not repaying loans. Some are calling for an extension of the current student loan interest rates for another year. 2013  Student loan rates will double Monday — at least for a while — after a compromise to keep student loan interest rates low proved unwinnable before the July 1 deadline.500 crore spread over 560. "Indian industrialists get about Rs 5 trillion in annual tax concessions. Given this situation. it is defamatory to display photos of students from poor and middle-class families for defaulting on education loans." The CPI had said. the central government and the SBI are shaming students who had availed education loan.around five per cent of its total loan portfolio. Big industrial groups do not repay loans and these are written off as bad debts. CPI.58 lakh crore and its non-performing assets were Rs 37. Several political parties like DMK.156 crore. Associated Press / June 29. DMK president M Karunanidhi had said. why should SBI single out the poor Education loan defaulters and shame them by displaying their photographs. Student loans: Interest rates set to double Monday Student loans: Interest rates on new subsidized Stafford loans are set to go from 3.defaulting on their educational loans. It is highly condemnable. He said SBI's total education loan as on March 2012 was only Rs 11.

Banks have also been asked to make education loan applicants aware of the mechanism — at the branch. Besides. zonal office and head-office levels — at the time of submission of loan application. Sept 21: challenges The Finance Ministry has asked public sector banks to put in place a three-tier grievance redressal mechanism to sort out problems being faced by students in obtaining education loans.Mumbai. 60 . These directives come in the wake of the Finance Minister’s observation that students wanting to get education loans were facing a number of problems. the ministry wants banks to introduce a system of review by the next higher authority where application for education loan is rejected.

..A. etc. whereas at Somaiya it would be Rs 80.. the student applying for the loan must be in the age group of 16-26 or some such specified range. The most important criterion is that the student must have qualified for.e. commercial pilot training.Sc. But many banks have a margin criterion. B..000.A.A.e. M. for example: · School/graduation courses.000. however. etc. In addition to these. etc. B. but would require it for amounts greater than that.A. which means that they would provide up to 75 per cent or 90 per cent of the total cost of the course. M.E. it depends on the course for which the loan is sought and the institution chosen. Some banks may also finance the cost of books. i. gold. vehicle. house or property. · Professional courses. B. that. 12 months. etc. the loan amount would depend on the discretion of the bank. 61 . i. like B. B.B. usually..  What security does one needs to provide for the loan? The security depends on the loan amount.. For example. Ultimately. equipments and other instruments required by the student for that course.  What is the maximum amount that can be availed under educational loans? / How is the maximum loan amount calculated? The maximum loan amount varies from bank to bank. etc. · Postgraduate/specialized courses.B. banks may provide one-way air fare. etc. M. or have a confirmed admission in a college or institute.'s would be approximately Rs 2 Lac. fashion designing. M... The loan amount could also be calculated as being six or 10 times the monthly salary of the parent. while the balance has to be paid by the applicant.B. and a regular source of income for the parents. Other criteria are good academic record (first class throughout.Com. hostel fees. The usual security that the banks generally take is National Savings Certificates (NSCs). It is quite possible that banks may not require security for a loan of up to Rs 25. These limits are usually in slabs that vary with banks. B.B. the courses financed should be for durations of more than a year.. BTech. Keep in mind.A. like M.I. B. But this needs to be checked with your individual bank. The recognition granted to the institution the student has opted for is also an important criterion. like computer courses. most importantly. The loan amount can also depend on the borrower's parents/guardians net monthly salary. Hence the loan amount will vary drastically.  What are the costs covered under educational loans? Educational loans usually cover the costs of tuition fees. bonds. but.S. the loan amount for an M. mess fee and examination fees. For studies abroad.A.. M. · Other courses. with no gaps or breaks in education. course would be different for different institutes--the fees at I. M.C. like High School.. however. The other factors that are normally important with nationalized banks are the age band..Sc. These vary greatly from bank to bank..RESEARCH:  For what type of courses can educational loans be taken? Educational loans can be taken to pursue a wide variety of courses.).M.  Who is eligible for an educational loan? There are many criteria that determine the eligibility of a student for an educational loan.Com..Com.Sc.E.

whichever is earlier. In other words. Repayment usually starts six months after the course completion or the commencement of a job. Further. 62 . most of the banks are providing online facility for submission/sanction of loans which will reduce complaints to a great extent. Typically. he does not enjoy a holiday period.  What is a holiday period? A holiday period is the maximum time given to the student before he/she needs to start paying back the principal loan in Equated Monthly Instalments (EMIs). that if the student starts working immediately after completing the course.some banks might also require the applicant to have a life insurance policy equivalent to. it is the period between the student's final examination in the course for which the loan was availed and when he/she actually starts paying the EMIs. They have also provided details of the officials to be contacted for any queries/complaints in regard to the loan. holiday periods range from six to 12 months. Banks’ feedback Banks have given feedback to the Ministry that they have put in place systems and procedures to bring to the notice of the student community about the procedure for getting education loan. or greater than. Take note. the loan amount. however.

As the engineering and other professional colleges admission are over. Primarily the student’s loans from banks will be for paying tuition fee only. This situation is leading in to trouble for many financially backward meritorious students.000 crore outstanding on education loans as of March 2009. banks have become cautious on sanctioning fresh loans to the sector. merit students can avail education loans from banks up to four lakh rupees without any collateral security for domestic institutions. there was an implied obligation on public sector banks to disburse the education loans as per the targets. hostel fee are not covered under education loan. The banks had Rs 27. many students are looking for financial aid. As "24 lakh students in India have borrowed loan for education and the outstanding amount with the banks is to the tune of Rs 52. As the bad loans in education loans category increasing. Rs 35." As everybody knows.850 crore as of March 2010 and Rs 41. which we can discuss separately. 63 .000 crore. Basically. as per the data from the Reserve Bank.340 crore such loans as of March 2011. who were aspiring higher education by getting student loans from banks. banks facing lot of delinquency pressure due to growing defaulters in this segment. the big challenge is to convince the bank manager to accept your loan application. Other expenses like books. For overseas education. If you want to get an education loan from any bank. But as said earlier.CONCLUSION: Getting Education Loans from banks is not that easy now. Education loans from banks are the best option for right candidate. loans are depends on the manager-customer relationship rather than talking about rulebook. first you check your relationship how best is with your bank manager. the rules are slightly different. Though.