A PROJECT REPORT ON

A STUDY OF

EDUCATION LOAN

AT

BANK OF MAHARASHTRA, PUNE.

SUBMITTED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

BY

APURVA YOGENDRA DUBEY

UNDER THE GUIDANCE OF

PROF. DR. ATIK SHAIKH.

IN THE PARTIAL FULFILLMENT OF

MASTERS OF BUSINESS ADMINISTARTION.

MCE SOCIETY'S - ALLANA INSTITUTE OF MANAGEMENT SCIENCES

AZAM CAMPUS, PUNE-411001.

 ACKNOWLEDGEMENT

A part of my efforts, the success of my project depends largely on the

encouragement and guideline of many others. This opportunity to express my
gratitude to the people who have immensely helped me in the successful
completion of this project.

I am gratefully indebted to my esteemed guide (PROF.) DR. ATIK SHAIKH for the
successful project and under his sincere guidance and effortless encouragement
and support without which it would have been impossible for me to complete this
project.

I express my heartfelt gratitude to our Director (PROF.) DR. ROSHAN KAZI, for his
constant support and encouragement along with our Head of Department (PROF.)
DR. ATIK SHAIKH and other staff members of ALLANA INSTITUTE OF
MANAGEMENT SCIENCES who directly or indirectly helped me. I would like to
express my sincere gratitude to all my colleagues in BANK OF MAHARASHTRA who
put their faith in me and urged me to do my best.

Finally, I would like to thank ALLANA INSTITUTE OF MANAGEMENT SCIENCES for

giving me the opportunity to do my summer internship program with BANK OF
MAHARASHTRA.
 DECLARATION

I APURVA YOGENDRA DUBEY do hereby declare that this project entitles as "A
PROJECT ON STUDY OF EDUCATION LOAN AT THE BANK OF MAHARASHTRA"
submitted to "SAVITRIBAI PHULE PUNE UNIVERSITY" in partial fulfillment of the
award of the MASTER OF BUSINESS ADMINISTRATION is an original record of
work done by me under the guidance of (PROF.) DR. ATIK SHAIKH.

DATE:

PLACE: PUNE

APURVA YOGENDRA DUBEY

SIGNATURE
 INDEX
CHAPTER CONTENT PAGE
NO’S: NO.

EXECUTIVE SUMMARY 5

1 INTRODUCTION 6-9

 OBJECTIVES 10

 SCOPE 10

 SIGNIFICANCE 10

2 COMPANY PROFILE 11-12

3 LITERATURE REVIEW 13-35

4 RESEARCH METHODOLOGY 36

 RESEARCH DESIGN 37

 SOURCE OF INFORMATION 38

5 DATA ANALYSIS AND INTREPRETATION 39-49

6 FINDINGS 50-51

7 LIMITATIONS 52-53

8 SUGGESTIONS 54-55

9 CONCLUSIONS 56-57

10 APPENDICES 58-60

11 BIBLIOGRAPHY 61-62

EXECUTIVE SUMMARY
India has large number of students
who are aiming for higher education
and are seeking financial assistance in
the form of educational loans from
banks. It has been found in the study
that, educational loans are available to
deserving / meritorious students at
affordable interest rates for pursuing
higher studies in India and abroad
for
various courses. Even though the
number of education loan accounts has
increased; the year-on-year growth
rate
had been showing a declining trend
both in number of accounts as well as
in the amount.
India has large number of students
who are aiming for higher education
and are seeking financial assistance in
the form of educational loans from
banks. It has been found in the study
that, educational loans are available to
deserving / meritorious students at
affordable interest rates for pursuing
higher studies in India and abroad
for
various courses. Even though the
number of education loan accounts has
increased; the year-on-year growth
rate
had been showing a declining trend
both in number of accounts as well as
in the amount.
India has large number of students who are aiming for higher education and are
seeking financial assistance in the form of educational loans from banks. It has
been found in the study that, educational loans are available to deserving /
meritorious students at affordable interest rates for pursuing higher studies in
India and abroad for various courses.

We all dream to study in the best university and some cannot do so due to
financial reasons and hence the government has launched and scheme for
students who want to pursue and follow their dreams in their dream colleges
named as “EDUCATION LOAN”.

With ever-increasing competition and soaring inflation, taking an education loan

has become a requirement for most students who aspire to study abroad.

Earlier, most parents were accustomed to utilizing their savings to finance their
child’s education by liquidating assets like Gold, Fixed Deposits, land, etc.
Nowadays parents have started accepting this paradigm shift of funding their
children's education by taking an education loan.

This is due to the fact that both students and parents are now aware of the
numerous advantages that an education loan may provide. They know it is better
to opt for an education loan over a personal loan for education. 

This begins with the Introduction to company, its area of operation in

organization structure, its achievements, etc.

In this project we deal with the methodology adopted in preparing this report are
mentioned. It covers the sample procedure, types of data used and data
collection method.
CHAPTER : 01

INTRODUCTION

BACKGROUND OF THE STUDY

EDUCATION LOAN:

In my study, I have used the terms such as “education loan”, “ loan amount”,
interchangeably.

Knowledge and information is key

driving force for economic growth
of any country. Rapid rate of
economic
growth of the country demands
technically and professionally
trained human man power in huge
numbers.
Therefore, loans for education are
seen as investments for economic
development and prosperity of the
country.
Money borrowed to finance education
or school related expenses is called
Educational loan. The National loan
scholarship scheme was started in
1963 to finance the meritorious
students for pursuing higher
education. The
budgetary allocation for higher
education was also decreasing with
respect to the increase in enrollment
over last
two decades. Functioning of
education sector depends on
availability of various resources, of
which to a large
extent on financial resources.
Finances for education are
mobilized from different sources
like government
spending, fees, educational loans, and
others. Among these, educational loan
has been seen as an alternative way
of financing for education.
Educational Loan Scheme is a
socially and economically relevant
loan scheme from the Indian
banking industry. Reserve Bank of
India (RBI) has included education
loans as part of the priority sector
lending of banks. It aims to provide
need-based finance to meritorious
student for taking up higher education.
In
any commercial lending decision,
credit worthiness of the borrower and
the viability of the scheme are
important.
The student borrower has no credit
history and as such he is assumed to
be creditworthy as this is a futuristic
loan. However, it is likely that the
joint borrower for the loan has a credit
history and any adverse features could
have a bearing on the assessment of
credit risk. If the joint borrower has a
loan account with the bank and the
loan is treated as non-performing
asset, the bank runs the risk of having
to consider the student loan also as
non-
performing asset. To overcome this,
the bank may, as a prudent measure
insists on a joint borrower acceptable
to
the bank, in case of adverse credit
history of the parent/guardian of the
student.
Knowledge and information is key
driving force for economic growth
of any country. Rapid rate of
economic
growth of the country demands
technically and professionally
trained human man power in huge
numbers.
Therefore, loans for education are
seen as investments for economic
development and prosperity of the
country.
Money borrowed to finance education
or school related expenses is called
Educational loan. The National loan
scholarship scheme was started in
1963 to finance the meritorious
students for pursuing higher
education. The
budgetary allocation for higher
education was also decreasing with
respect to the increase in enrollment
over last
two decades. Functioning of
education sector depends on
availability of various resources, of
which to a large
extent on financial resources.
Finances for education are
mobilized from different sources
like government
spending, fees, educational loans, and
others. Among these, educational loan
has been seen as an alternative way
of financing for education.
Educational Loan Scheme is a
socially and economically relevant
loan scheme from the Indian
banking industry. Reserve Bank of
India (RBI) has included education
loans as part of the priority sector
lending of banks. It aims to provide
need-based finance to meritorious
student for taking up higher education.
In
any commercial lending decision,
credit worthiness of the borrower and
the viability of the scheme are
important.
The student borrower has no credit
history and as such he is assumed to
be creditworthy as this is a futuristic
loan. However, it is likely that the
joint borrower for the loan has a credit
history and any adverse features could
have a bearing on the assessment of
credit risk. If the joint borrower has a
loan account with the bank and the
loan is treated as non-performing
asset, the bank runs the risk of having
to consider the student loan also as
non-
performing asset. To overcome this,
the bank may, as a prudent measure
insists on a joint borrower acceptable
to
the bank, in case of adverse credit
history of the parent/guardian of the
student.
Knowledge and information is key driving force for economic growth of any
country. Rapid rate of economic growth of the country demands technically
and professionally trained human man power in huge numbers. Therefore,
loans for education are seen as investments for economic development and
prosperity of the country. Money borrowed to finance education or school
related expenses is called Educational loan.

Finances for education are mobilized from different sources like government
spending, fees, educational loans, and others. Among these, educational loan has
been seen as an alternative way of financing for education. Educational Loan
Scheme is a socially and economically relevant loan scheme from the Indian
banking industry.

Reserve Bank of India (RBI) has included education loans as part of the
priority sector lending of banks. It aims to provide need-based finance to
meritorious student for taking up higher education. In any commercial lending
decision, credit worthiness of the borrower and the viability of the scheme are
important. The student borrower has no credit history and as such he is assumed
to be creditworthy as this is a futuristic loan.

However, it is likely that the joint borrower for the loan has a credit history and
any adverse features could have a bearing on the assessment of credit risk. If the
joint borrower has a loan account with the bank and the loan is treated as non-
performing asset, the bank runs the risk of having to consider the student loan
also as non-performing asset. To overcome this, the bank may, as a prudent
measure insists on a joint borrower acceptable to the bank, in case of adverse
credit history of the parent/guardian of the student.
BENEFITS OF EDUCATION LOAN:

 Lower Interest rates :

When taking personal loans for financing education abroad, interest rates are
predominantly higher compared to education loans. The interest rates on study
loans are lesser. Also, Government banks provide an additional concession of
0.5% to all female students. 

 Moratorium holiday-Pay after your course completion:

This is one of the significant advantages of education loans. Unlike personal loans
where a borrower is expected to start paying the incurred EMIs from the next
months, education loan schemes come with a moratorium period.

The moratorium period is the time until which the EMIs don’t start or the student
is not required to make any payments to the lender. Generally, the moratorium
period includes course duration plus 6 months (can be extended to 12 months) so
that the students can concentrate on their studies.

 A wide range of expenses covered:

Education loan for abroad studies covers almost every necessary expense that a
student might need to complete their education. It includes tuition fees, travel
(tickets), house rent, university fees, food expenses, living expenses, a laptop, or
any other apparatus required for your education. 

 Education loan interest subsidy:

The Government of India has introduced several education loan subsidy schemes

for the benefit of the loan applicants who belong to the financially backward
sections of society. The subsidy schemes are given below. 

 Central Sector Interest Subsidy Scheme

 The Padho Pardesh Education Loan Interest Subsidy Scheme
 Dr. Ambedkar Central Sector Scheme of Interest Subsidy.
 The advantages of these subsidy schemes include the waiver of the education
loan interest charged during the moratorium period. However, post the
moratorium period, these students are to start the repayment of EMIs by
themselves.

 Tax benefit- Section 80E:

In Section 80E of the Income Tax of 1961, the loan applicant or the co-applicant
can avail of the education loan income tax exemption. In simple terms, the loan
applicant or the co-applicant can proclaim a certain percentage of the interest
paid towards their education loan as deductible from the total income. 

 Tax collection at source (TCS) on foreign remittance:

As per TCS on foreign remittance, a person sending money more than 7 lakhs

abroad in a financial year, has to pay an extra tax on amounts exceeding 7 lakhs.
To provide relief to students who have taken education loans through a financial
institution in India that is banks or NBFCs, the rate of TCS shall only be 0.5% on
amounts exceeding RS- 7 lakh. And the best part is the whole amount of TCS can
be claimed back. 

 No need to liquidate valuable assets:

Mostly, parents liquidate valuable assets to bear education expenses which

eventually disturb long-term financial goals like buying land or a flat, children’s
marriage, etc. By taking an education loan, banks retain your liquid assets like
FDs, insurance, Government bonds as security and grant you a loan against that
security. Therefore, the loan taken for your education would not muddle in
between your long-term financial goals. 

 Liberating your parents from loan burden:

Taking an education loan can liberate parents from all financial burdens as the
student is responsible to repay his education loan after the completion of his
studies and the moratorium period.
 Overview of Abroad Education Loan from Bank of Maharashtra

Particulars Details of Loan

  Maximum Loan INR 20 Lakh

Amount May increase for meritorious students, if need be.

Loan Tenure 15 Years

Up to INR 7.5 lakhs: RLLR (Repo Linked Lending

Rate of Interest Rate) + 2.00= 8.80 Above INR 7.5 lakhs: RLLR + 1.65= 8.45
(ER)

Processing Fee Nil

Margin 15%

Moratorium Course Period + 1 year

  Job oriented Prof./Technical / PG courses/ Post

Courses
graduation: - MCA, MBA, MS, etc .
OBJECTIVES OF THE STUDY :

 To study the education loans and procedures involved in BANK OF

MAHARASHTRA.
 To identify various schemes of education loan.
 To study the
 To understand the problems of students while availing the educational loan
from the bank.

SCOPE OF THE STUDY:

 The study was mainly conducted to understand the concept of education

loans scheme and the eligibility criteria for the students.
 The study is been done to understand the documents involved in the
education loan and repayment methodology adopted by Bank Of
Maharashtra.

SIGNIFICANCE OF THE STUDY :

The significance of the study is to gain knowledge of the processing of the

educational loans, the main significance of the study are as follows:

To know the ideas of the students about education loans services. To study the
problem faced by the students in obtaining the educational loans. To learn
various aspects of the educational loan.
 CHAPTER : 02

COMPANY PROFILE

BANK OF MAHARASHTRA

BRIEF OF THE COMPANY:

The bank was founded by V.G.Kale and D. K. Sathe in Pune. Bank of
Maharashtra was incorporated on September 16, 1935 and started their business
on February 8, 1936 with a capital of Rs10 Lakh. Today it has the largest network
of 1,375 branches. Bank of Maharashtra is a public sector bank in Maharashtra
which offers personal banking cash management retail loans and other financial
services.

Bank of Maharashtra is an Indian public sector bank headquartered in Pune. The

bank had 29 million customers across the country with 2022 branches as of March
2022. It has the largest network of branches of any nationalized bank in the state
of Maharashtra.

LITERATURE REVIEW
An Education Loan or a Student Loan is a kind of financial service provided by the
banks in order to help students gain good and quality education. This loan
includes book supplies, tuition fee, secondary education and many more things.
This loan is different from the other kinds of loan as this loan has a lesser interest
rate.

The repayment also varies for these loans i.e. when the child is still in school the
repayment is relatively less. It also differs in many countries as it is subjected to
rules and regulations of that particular country.

Countries like Australia, Canada, France, Germany, India, South Korea and the
United States have different policies on education loans. There is an effective
impact of education loans as this loan is accessible to everyone and such loans
help people in getting quality education from reputed schools and colleges.  

A Status Report on Worldwide

Reforms
by D. Bruce Johnstone State
University of New York
at Buffalo with the collaboration of
Alka Arora and
William Experton.
By Pawan agarwal June
2006 working paper, no. 180
provided in coopera-
tion with: Indian council for
research on interna-
tional economic relations (ICRIER
By Pawan Agarwal June 2006 working paper, no. 180 provided in cooperation
with: Indian council for research on international economic relations (ICRIER)

As of 30 June 2005, Public Sector

Banks had
a  total  outstanding 
exposure  of  Rs.71  billion 
against 488,000 education loan
accounts.
∑ Financing of higher
education through student
loansisstillinsignicant.
Only2-3%students
avail of student loans.
In comparison, 85 %
studentsinUKandSweden
,50%inUSAand
Canadaand 77
%inAustraliahad
availed of
student’s loans in recent years.
(Usher, 2005).
∑ A market research
company conducted a com-
prehensive study of the students’
loan per-
formance in India. The study
covered 350+
branches of 78 banks covering
public and pri-
vate sector banks including foreign
and coop-
erative banks in 20 cities in
Maharashtra and
As of 30 June 2005, Public Sector Banks had a total outstanding exposure of Rs.71
billion against 488,000 education loan accounts. Financing of higher education
through student loans is still insignificant. Only 2-3% students avail of student
loans. In comparison, 85 %students in UK and Sweden, 50% in USA and Canada
and 77 % in Australia had availed of student’s loans in recent years.

A market research company conducted a comprehensive study of the students’

loan performance in India. The study covered 350+ branches of 78 banks covering
public and private sector banks including foreign and cooperative banks in 20
cities in Maharashtra and Delhi.

It was seen from the study that more than half of the banks did not offer students
loans at all. For the remaining banks, student loan portfolio was only about 3.77%
of their entire loan portfolio with personal loans, automobile loans and home
loans constituting the major part of it.

Onanalysisofthe7751st
udentloancasesof
various banks across the state, it
was found that
the average loan amount was
around Rs.0.3
millionandinterestrate12.
5%
On analysis of the 7751 student loan cases of various banks across the state, it
was found that the average loan amount was around Rs.0.3 million and interest
rate 12.5%. Majority of students who availed of loans were pursuing professional
degree programs with 46.17% studying engineering, 22.64% pursuing MBA and
12.71% doing medical programs. The default and delinquent levels in student
loans were found to be extremely low with 1.1% and 0.7% figures respectively.

Indian banks have seen a 142 per

cent rise in
default by students who have taken
education
loans during the past few years, at
a time when
hiring for new jobs has slowed
down and tech
companies have started laying off
employees
Indian banks have seen a 142 per cent rise in default by students who have taken
education loans during the past few years, at a time when hiring for new jobs has
slowed down and tech companies have started laying off employees. State-owned
Banks, which are already weighed down by huge defaults by corporates, are the
worst hit as they account for over 90 per cent of educational loans.

The total non-performing assets (NPAs), or loans on which borrowers have

defaulted on payments for more than the stipulated 90 days, stood at Rs- 6,336
crore at the end of December 2016, against Rs-2,615 crore in March 2013, the
Reserve Bank of India (RBI) has revealed.

The rise in bad loans in the education loan segment in 2013-2016 coincided with
the Indian industry battling overcapacity, demand slow-down, stalling of new
projects and defaults by top corporates. At the same time, the demand for loans
was up as educational institutions, especially engineering and management
colleges, mushroomed, without a check on quality.

Higher education at the start of 21st century is beset with problems of declining
financial support by government, higher fees, greater student debt loads, and
a restive student body. In India, the 1992 Education policy provided for the
establishment of self-financing colleges and deemed Universities in the private
sector to address the gap in Government investment in higher education. It also
suggested educational loans for meeting the expenses for higher education. The
Central Government and the Indian Banks association finalized norms for
educational loans in 2001. Since then the educational loans grew substantially.

In a study conducted in United States Of America (USA) on student

borrowing over the last two decades prior to 1987, found that students borrow
more than they used to, and more students take out educational loans. Student
loans were popular with both the middle class and lower income families and are
commonly taken at community colleges and proprietary schools. And it was also
found that most of the educational loans were taken by students studying in
private colleges. Majority of the Americans are favorable towards borrowing, to
finance educational expenses. People from low income groups found to be
reluctant to borrow for educational expenses when compared to middle and
upper income groups.
In a study of 1,500 students of University Putra of Malaysia, it was found
that students have good knowledge about National Higher Education Fund
Corporation (PTPTN) loan agreement but there were a significant proportion
of students with negative attitudes towards the repayment of the loan.
Majority of them perceived the loan as a burden to them. Adam (2008) discusses
how American Congress has eliminated the possibility of discharging educational
loans by bankruptcy.

Dongbin examines the relationship between undergraduate student loan debt

and college degree attainment. The results of his study find that higher student
loan debt in the first year of college is associated with lower chances of
degree attainment among low-income and Black students. Her findings
suggest that students' increased reliance on loans for financial aid may
widen the income and racial/ethnic gaps in degree completion, despite the
fact that a primary goal of financial assistance is to narrow those gaps.

NEED OF THE STUDY:

India has large number of students who aim for higher education and the gap
between the number of educational loans availed and those who seek financial
assistance is significant, which in turn is affecting the student community. To
make things more complex and difficult the banks impose stringent and inflexible
terms and conditions.

The main emphasis is that every meritorious student is provided with an

opportunity to pursue education with the financial support on affordable terms
and conditions. Education loans are basically a form of monetary assistance
availed by students to meet the expenses associated with their studies.

The need for a robust system of higher education financing arises on account of
demographic challenges, trend towards privatization, and poor budgetary
support. Opting for an education loan reduces the strain on your family savings
and eliminates the need to liquidate your investments in fixed deposits, mutual
funds or bonds.  Education loans can be taken by means of funding, scholarships,
financing and rewards, and are granted in cash, which has to be repaid to the
lender along with a rate of interest.

 Education assumes significance as a provider of input for economic, political and

social development, besides as a source of knowledge. Economic growth in
recent years has been based on availability and quality of knowledge in any
country, which in turn depends on access and affordability to education.

TERMS USED IN EDUCATIONAL LOANS:

 PRINCIPAL AMOUNT:

This education loan term is commonly used to refer to the basic loan amount
granted by lenders to students in need. The amount required by candidates as an
education loan amount is called the principal amount.

 INTEREST RATE:
The interest rate refers to the money paid to the lender in exchange for
borrowing the principal amount. This education loan term is often considered in
terms of percent per annum by Indian lenders of abroad education loans. The
interest rates of Indian lenders are decided on the basis of MCLR, while the APR
of international lenders are based on LIBOR (London Inter-Bank Offered Rate). 

 CO-APPLICANT/CO-SIGNER:

A co-applicant refers to the person who signs the education loan agreement with
the loan applicant. A co-applicant is liable to repay the education loan, should the
loan applicant fail to do so. International lenders also address co-applicants as co-
signers. In order to apply for an education loan in India, the co-applicant has to be
someone who is a close family member of the loan applicant. Parents and siblings
are mostly preferred by lenders as co-applicants.

 GUARANTOR :

 A guarantor is basically a third party (someone other than a close family

member) whose assets have been pledged as collateral security against the
collateral education loan. A guarantor is someone whose property/liquid assets
you pledge as collateral against an education loan. Please keep in mind that a
guarantor and a co-applicant are not the same. This guarantor can be anyone
other than your parents and siblings, e.g, uncle, aunt, cousins, etc.

TYPES OF EDUCATION LOANS

1) DOMESTIC EDUCATION LOAN:

Students who would like to pursue education in India can apply for this loan type.
The loan will get approved only if the applicant is admitted to an Indian
educational institution and meets all other lender criteria.

2) OVERSEAS EDUCATION LOAN :

Such loans help students realize their dream of pursuing the course of their desire
in a foreign institution. The loan covers the airfare, accommodation, and tuition
fee for students who wish to study abroad only if they satisfy the eligibility
criteria.

3) UNDERGRADUATE EDUCATION LOANS:

This type of education loan is provided for students to give financial aid to
students so they can complete their undergraduate degrees. An undergraduate
degree will usually be a 3 to the 4-year long course under various specializations.
Having an undergraduate degree helps individuals to land a decent job and start
earning.

4) POSTGRADUATE LOANS:

Many undergraduates would like to continue their education with a postgraduate

course, usually a 2-year long course in India. An advanced degree is desired to get
more profound knowledge in the area of interest.

5) CAREER DEVELOPMENT LOANS:

Many professionals who work for a few years in corporate jobs prefer to pause
their career and take up professional courses and training to improve their
employment prospects. Such individuals would strive hard to get into reputed
business and technical schools to polish their skills and reach greater heights in
their career.

LISTS OF EXPENSES COVERED UNDER EDUCATION LOANS:

 Fees payable to the educational institutes.

 Examination/ library/ laboratory fee.
 Travel expenses/ passage money for studies abroad.
 Insurance premium for student’s borrowers, if applicable.
  Caution deposit, building fund/ refundable deposit supported by institution
bills/ receipts (total expenses should not exceed 10% of total loan).
 Purchase of books/equipment/instruments/uniforms (total expense should
not exceed 20% of total loan).
 Purchase of computer at a reasonable cost, if required to complete the
course (total expense should not exceed 20% of total loan).
 Any other expense required to complete the course, such as study tours,
project works, thesis, etc. (total expense should not exceed 20% of the total
loan).
 While computing loan required, scholarships, fee waiver, etc., if any
available to the student borrower.

EDUCATION LOAN ELIGIBILITY AND LOAN RULES :

The rules & eligibility criteria for Bank of Maharashtra abroad education includes
the following:
 Nationality - The student/ loan applicant should be an Indian citizen and
have a valid Indian passport. 
 Admission Criteria - The student must have secured admission to the
university through an entrance test or on the basis of merit. 
  Documents Required For Loan - One must have all the documents in place
before applying for the abroad education loan. You must ensure that all the
documents are authentic as any discrepancy in the document will lead to
the rejection of the loan application. Also, you should start collecting the
documents right after getting the letter of acceptance from the university.
The loan process can take even around a month in some cases so it’s better
to start early and be assured of the loan.

 One needs to have the following documents handy for Bank of Maharashtra’s
abroad education loan:

 Duly filled loan application form without any discrepancy in the information
provided by the applicant. 
 The letter of acceptance/ letter of admission or any other relevant
document that proves your admission to the university. 
 A complete statement of the cost of education abroad. 
 Two passport-size photographs must be clear with no blurry or overly
shining element in them. 
 PAN card of both the applicant and the co-applicant. 
 Aadhar card of both the applicant and co-applicant. 
 Proof of residence (Electricity bill, municipal tax receipts, Driving license,
Telephone bill, Passport, etc.)
 Proof of identity(Driving license, Passport, Voter ID card, or any other photo
identity). 
 IT return/ IT assessment of the last two years of the Parent or Guardian
who is the co-applicant in the loan. It is applicable only if they are an
income taxpayer. 
 Proof of income of the Parent or Guardian who is the co-applicant in the
loan. Salary slips and Form 16 can be used as proof of income. 
 Bank statement of the last six months of the borrower and the co-
applicants (Parents or Guardian or any other co-borrower).
 Statement of all the assets and liabilities of the Parents or Guardian or any
other co-borrower. 
  Marks sheet of the last qualifying exam based on which the student is
seeking admission for higher education in the university abroad. 
 Details regarding the scholarship and loans (if the student has any). 

Procedure to Check Eligibility :

Follow the steps mentioned below to check your eligibility for an education loan:

Step 1: Visit the official website of Bank of Maharashtra.

Step 2: Go to the 'Loan' section and click on 'Education Loan' from the dropdown
menu.

Step 3: Click on 'Education Loan Eligibility'

Step 4: Based on your particulars, the site will then show you suitable loan offers
from their bank partners.

Step 5: You can choose the most advantageous offer from the given options and
then apply for the same through the Bank Of Maharashtra portal.

EMI Payment Methods by Bank of Maharashtra  - Bank of Maharashtra gives a

range of options for EMI payments of the abroad education loan. 

Borrowers can choose one option among the following for education loan
repayment:

Standing Instruction - It is perhaps the best mode of EMI payment on your abroad
education loan. However, it is only available for existing account holders in the
Bank of Maharashtra. In this mode of payment, the monthly EMIs are
automatically debited from your bank account without any hassle. 
Electronic Clearing Services - Just like the method of EMI payment in the Standing
Instruction this method of payment also deducts the monthly EMIs from the bank
account that you will give. The only difference is that it is available for those
borrowers who don’t have an account in the Bank of Maharashtra. 

Post Dated Cheques - If a borrower is not comfortable with the electronic modes
of payment then they can use this option for EMI payments. The borrower has to
submit some post-dated cheques at the nearest Bank of Maharashtra education
loan center. One has to keep submitting the post-dated cheques at regular
intervals at non- ECS(Electronic Clearing Services) centres. Out of all the options
provided by the bank most borrowers choose either the first or the second option
for EMI payments. The Post Dated Cheques mode is quite cumbersome and needs
physical visits to banks at regular intervals. 

Maximum Loan Amount :

The maximum loan amount in most cases is around INR 20 lakh for abroad
education. However, the loan amount might vary from case to case. There are
several cases wherein the bank gives loans with a higher amount when the
borrower can pledge collateral of higher value. Meritorious students also get
loans with higher value if they secure admission at top universities. 

Margin:

The margin for abroad education is 15%. Margin money is the percentage of the
cost of education that a student has to fund on its own. For instance, if you want
a loan for INR 1Lakh then you will have to fund INR 15000 on your own. 

Repayment Period:

The loan repayment period for an abroad education loan is 15 years. However, it

is always advised to repay the loan as soon as possible. The rate of interest is
pretty high for abroad education loans so it’s better to take less time in
repayment. 

Collateral:

The parents or the guardians act as co-applicant for an abroad education

loan. Bank of Maharashtra gives only secured loans for education abroad. Like
most PSBs Bank of Maharashtra also gives the option of third-party collateral
wherein a close relative can pledge the collateral if you don’t have high valued
collateral. 

Courses Covered under Abroad Education Loan :

Most courses that are job-oriented and have bright prospects post-completion
are included in the loan scheme. Most technical / PG courses/ Post graduation: -
MCA, MBA, MS, etc are included in the loan scheme. 

Rate of Interest:

Every child needs a quality education in order to lead a complete, successful and
comfortable life. Unfortunately, such education comes at a cost that not
everybody can afford. This is where education loan comes into play. Education
loans are funds offered by banks and financial institutions to meritorious students
to help them pursue their dream course.

Bank Of Maharashtra Education Loan Interest Rate is quite competitive for

education in India’s finest institutes and on studying abroad. Interest Rates on
 Education Loans are floating, and vary with the changes in MCLR. Bank Of
Maharashtra Education Loan Interest Rates are in the range of 8.55% and 8.90%

The current interest on education loan is listed here under:

For loans up to Rs.4 lakh Base Rate + 2.50% MCLR+ 2.50%

For loans above 4 lakh and up to

Base Rate + 2.00% LBKR+ 2.00%
Rs.7.5 lakh

For loan above Rs.7.5 lakh Base Rate + 1.25% LBKR+ 1.25%

EMI Calculator :

The bank website provides the facility of calculating the EMI for its customers
who are willing to take a loan from the bank. Here are some examples:

 A avails a loan of Rs.3.5 lakh to pursue higher education in India for his
post-graduation course. The repayment tenure chosen by him is 12
months. The bank charges him an EMI of Rs.31,179 which will be payable
once the moratorium period is over
  B needs Rs.6 lakh to take admission in the post-graduate management
course conducted by IIM – A. he approaches the Bank of Maharashtra and
requests for the loan amount. At the rate of interest of 12%, the Equated
Monthly Installment payable by B for a period of 24 months works out to
be Rs.28,244 approximately
 C needs Rs.10 lakh to complete his graduation from a foreign university
based out of USA. He approaches the bank with his requirement and agrees
to pay off the loan after the moratorium period is over within 5 years. At
the rate of interest of 11.25%, his Equated Monthly Installment works out
to be Rs.21,867 approximately.

Applicant Loan Amount Interest Rate Term EMI

       A Rs.3.5 lakh 12.50% 12 months 31,179

B Rs.6 lakh 12.00% 24 months 28,244

C Rs.10 lakh 11.25% 60 months 21,867