Education Loan

by
K. Srinivasan
Convenor,
Education Loan Task Force
at
Ullas Trust
2 April 2017
Types of Education Loan

• IBA Scheme (one for students after
Plus Two and the other for
students with 10th std. qualification)
• Non IBA Scheme(Bank’s own
scheme – concessions will not be
applicable)
Indian Banks Association (IBA)
Scheme – introduced in 2001 –
Latest scheme from August 2015
Objective

• Every meritorious poor student
should get the opportunity to
pursue higher education in India
or abroad
• Implemented by IBA members
Eligibility
• Indian national
• Secured admission through written
test / merit based selection process
in a recognised institution after Plus
two or equivalent
• Special procedure for Management
quota students
Design elements
a. Loans to students admitted to top
rated institutions
b. Loans to students admitted to
other domestic institutions
c. Loans to students seeking
studies abroad.
Important aspects

• Reputation of the Institution
• Employability
Eligible courses
• All approved UG/PG Degree or
diploma courses recognised by
UGC/AICTE/Government
• ICWA/CA/CFA
• Aeronautical / shipping / Nursing –
approved by the Government
Eligible courses

• All approved courses in India by
foreign Universities
• Banks can decide the courses
based on the employability
Study abroad
• Be cautious about higher education
abroad – Look at the rating of the
Institution and employability
• Medical courses in Russia, China
are not acceptable in India
Expenses considered
• Fees (as approved by the
Government)
• Hostel expenses or reasonable
lodging expenses
• Purchase of books, computers, etc.
• Scholarship to be excluded
Quantum of finance

• For study in India 10 lakhs
• For study abroad 20 lakhs
• Banks can consider higher limit
depending on the Institution
Margin

• For study within India

Upto 7.5 lakhs Nil (if CGCI
guarantee is available) – beyond
5%
For foreign study – 15%
Security

• Upto 7.50 lakh, parents to sign (if
Credit Guarantee is available)
• Above 7.50 lakh – collateral
security needed
Rate of Interest
• Interest linked to Base Rate –
Banks discretion
• Simple interest during moratorium
period. Accrued interest to be
added to principal while fixing EMI
• Servicing of interest optional
Application – documents
needed
• Address proof
• Identity proof
• Admission letter (merit based)
• PAN card / Aadhar card
• Income certificate by Thasildar
How to apply
• Vidyalakshmi Portal
www.vidyalakshmi.co.in
• Directly at Branch
• Bank should give acknowledgement
• Decision to be given within 15 to 30
days.
Rejection

• Rejection to be given in writing
with the approval of contolling
authority.
• No service area concept
Interest subsidy - CSIS
• Loan under IBA Scheme only
• Professional / technical courses
• Approved courses / institutions
• Parent income should be less than
4.50 lakhs – Thasildar certificate
• Only for study within India
Interest subsidy

• Full interest subsidy during study
period plus one year
• For minority students studying
abroad, Pado Parvesh scheme
Repayment

• Repayment to start one year after
study period.
• Telescopic EMI upto 180 months
• Additional moratorium of six
months each – three times during
the currency of the loan
What students should do
• Follow the guidelines given by the
bank
• Update the bank with the progress
• After study period consult Bank for
fixing EMI
• Repay the loan as per rules
Repayment default

• Credit score may be affected
through CIBIL
• Bank may take legal action
Grievance redressal
• Discuss the grievance with
Manager
• Escalate to Regional manager or
Chairman / RBI / Government
• Approach Banking Ombudsman
• Finally High Court
Thanks

K. Srinivasan
www.eltf.in
info@eltf.in
Facebook Page:
EducationLoanTaskForce