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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(Banks 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