Education Loan in India / Abroad
Learn more about our Education Loan Scheme under TMB Retail Loan Products.
This is scheme of choice for parents who wish to educate their children in professional courses in India / Abroad and help them get graduation / post graduation in any field of choice of the student. The cost of the education can be born by the loan from our bank.
1.Should be an Indian National.
2.Secured first class and wish for admissions in Professional / Technical / Other Courses of various studies.
3.Secured admission to foreign University Institutions.
4.Any Student who has attained the age of 18 years or Parent of the Student can avail the loan.
Eligible course of study
Studies in India School education / Graduation / Post Graduation Courses.**
Professional courses: Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc. Courses like ICWA, CA, CFA etcCourses conducted by IIM, IIT, IISc, XLR1, NIFT etc.
Courses offered in India by Reputed Foreign universities.
Studies AbroadGraduation: For Job oriented Professional / Technical courses offered by reputed universities.
Post Graduation: MCA , MBA , MS, etc.
Courses conducted by CIMA-London, CPA in USA etc.
** When the age of the student is below 18, Loan may be sanctioned to his parents by complying the relevant condition mentioned further below.
Expenses considered for Loan
1.Fee payable to College / School / Hostel.
2.Examination / Library / Laboratory fee.
3.Purchase of Books / Equipments / Instruments / Uniforms.
4.Caution Deposit / Building Fund / Refundable Deposit supported by Institution Bills / Receipts.
5.Travel expenses / passage money for studies abroad.
6.Purchase of computers – essential for completion of the course.
7.Any other expense required to complete the course – like study tours , project work, thesis etc.
Quantum of Finance
Need based finance subject to repaying capacity of the parents / students with margin and the following ceilings: For Studies in India – Max. Rs.7.50 Lakhs, For Studies Abroad – Max. Rs.15.00 Lakhs.
Any irregularity or default in repayment will attract penal interest of 2.00% p.a. over and above the above rate of interest or at such rates prescribed by the bank from time to time on the balance outstanding.
The loan will be disbursed in staged as per the requirement / Demand directly to the institutions / Vendors of books / Equipments / Instruments.
All usual documents as per Bank’s Rule should be obtained. 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.
Holiday / Moratorium Period: Course Period + 6 months after completion of the course. If the student got employed within 6 months after completion of the course, the repayment should start immediately after the expiry of one month from the date of employment.
Maximum Repayment period of Loan:The loan to be repaid in 5-7 years after commencement of repayment. If the student is not able to complete the course within the scheduled time extension of time for completion of course may be permitted for a maximum period of 2 years. If the student is not able to complete the course for reasons beyond his control, sanctioning authority may at his discretion consider such extensions as may be deemed necessary to complete the course
Branch to contact college / university authorities to send the progress report at regular intervals in respect of students who have availed loans.
Guarantee / Co-obligant
Guarantee of Parents.
In case, the loan is sanctioned to Parents suitable third party guarantee is to be obtained.
Wherever loan is sanctioned to Parents, guarantee is to be obtained from the student on attaining his majority.
Payable at monthly rests from the date of availment of loan. A separate Letter of undertaking is to be obtained from the Parent / Guarantor that the monthly interest will be paid from the income of the Parent / Guarantor.
1.00% of Limit sanctioned without any maximum cap.
All the above Terms and Conditions are subject to change and sanctioning of the loans is at the sole discretion of the Bank. Service Tax on All Service Charges extra wherever applicable.
Canara Bank offering Educational Loans [Vidyasagar]
Rate of Interest : (Subject to changes as advised by Bank/RBI from time to time) :
(1) Student satisfying DRI norms 4.00%
(irrespective of quantum of loan)
(DRI:annual income less than Rs 7200 p.a)
– Upto Rs.4 lakhs – 12.50%
– Above Rs.4 lakhs upto Rs. 7.50 lacs – 13.50%
– Above Rs. 7.50 lacs upto Rs. 15 lacs – 11.25%
– For students secured admission in IIT / IIM / ISB* – 10.75%
* for loans granted w.e.f. 9.7.2005
1) 0.50 % concession in ROI for prompt servicing of interest during study period.
2) Reduction of 1% for all courses in all slabs / category for girl students for loans granted from 1.12.2005 to 30.6.2008.
Indian Overseas Bank’s Vidya Jyoti Scheme
1.You should be an Indian National.
2.You should have secured admission to professional/technical courses or other academic courses.
3.You should have secured admission to foreign University/Institution (in the case of overseas study)
What can I use the loan for ?
You can avail the loan for your school education including plus 2 stage/Graduation/Post graduation/Diploma/Computer education in any recognised State/Central Government/University. Professional courses including Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, courses like ICWA, CA, CFA, etc., courses conducted by IIM, IISC, XLRI, NIFT etc. Courses offered in India by reputed foreign universities/Evening courses of approved institutes.
How much can I get ?
You can get a maximum of Rs. 7.50 lakh for studying in India and Rs. 15.00 lakh for studying abroad.
What rate of Interest will I have to pay ?
Present Interest rate is as follows:
– Up to Rs. 4.00 lakh PLR (at the time of availing of loan). Presently 11% (Flat).
– Above Rs. 4.00 lakh PLR+1% (at the time of availing of loan). Presently 12% (Flat).
– The rate of Interest prevailing at the time of first availment shall prevail throughout the repayment period.
– Interest to be debited quarterly/half yearly on simple basis during the repayment holiday/moratorium period.
What is the margin for the loan ?
1.For loans upto Rs. 4.00 lakh % Nil
2.For loans above Rs. 4.00 lakh Studies within India 5%
3.For studies abroad 15%
4.Scholarship/assistantship to be included in margin.
What security do I need to provide ?
1.For loans upto Rs. 4.00 lakh % Nil
2.For loans above Rs. 4.00 lakh Satisfactory personal guarantee
and up to Rs.7.50 lakh of a third pary,
3.For loans above Rs.7.50 lakh Collateral security in the form of NSC/KVIP, LIC Policy, Gold, Shares/Debentures or immovable properties Bank Deposits in the name of student/Parent/Guardian or any other third party with suitable margin/co-obligation of third party/parent/guardian along with assignment of future income.
Frequently Asked Questions on Education Loans
Q) What does one needs to look at in order to choose a loan?
Ans) Ideally, take a loan from a bank located at your place of study than one located where you reside, unless it concerns overseas studies. This is because you will have better access to funds if you take a loan from the place of your study. Secondly, Make sure the repayment period starts only after six to twelve months after you begin your working life. And thirdly, Banks typically prefer to finance students who opt for traditional courses.
Q) For What Professional Courses do Banks generally provide education loans ?
Ans) Management students are among the top choices for most of the banks. Technology students from the country’s premier institutions can also get student loans from Banks and Medical and engineering college students.
Banks don’t provide loans for students with a bachelor’s/master’s in Arts . Also, for courses where employment prospects are less (as per Bank’s own evaluation), loans are sanctioned on the basis of the parents’ income.
Q) How much Loan you can get ?
Ans) Loan for Studies in India Most of the Public Sector Banks in India have categorized Student Loans in two categories.
For Studies in India , Students can borrow up to Rs 4 lakh without providing any security or margin. A loan amount of Rs 4 lakhs to Rs 7.5 lakhs can be availed against a third-party guarantee. This loan comes with a five percent margin (what this means is that you will get five percent less the amount sanctioned as loan; you will have to put together the rest of the money). The third-party guarantee can come from an uncle, neighbor or friend standing guarantee for the full amount.
Overseas study loans : Amounts worth Rs 7 lakhs and above are usually sanctioned against fixed deposits, NSC certificates, property worth the loan amount and a margin amount of 15 percent (what this means, again, is that you will get 15 percent less the amount sanctioned as loan; you will have to put together the rest of the money). Also, if a loan below Rs 4 lakhs comes at x rate of interest, the loan over Rs 4 lakhs is usually charged one percent higher interest. The Reserve Bank of India prescribes the specifics (amount, rate, repayment period) of education loans and the government provides a two per cent subsidy on these loans to the banks.
Important Note : Indian Banks’ Association (IBA) has recently formed a working group to address the issue of student loans and the rising rate of default. The group has submitted its findings to the Reserve Bank of India and the main suggestion is to make it mandatory for parents or guardians, of the student borrowing loans, to be co-borrowers thereby making them liable for repayment.
Repayment – Course period + 1 year or 6 months after getting job, whichever is earlier.
Q) What are the Documents required for applying a Student Loan ?
Ans) All students are required to submit mark sheets of last qualifying examination, poof of admission scholarship, schedule of expenses for the specified course, his/her bank account statement for the last six months, an income tax assessment order for the previous two years, a brief statement of assets and liabilities, of the co-borrower, which is usually the parent or guardian and proof of income, if any.
Some banks require all or any of the following documents as pre sanction documents:
To furnish the following documents along with the completed application form. Relevant information would relate to the guardian and the student both, when the loan is jointly taken.
1)Mark sheet of last qualifying examination for school and graduate studies in India
2)Proof of admission to the course
3)Schedule of expenses for the course
4)Copies of letter confirming scholarship, etc.
5)Copies of foreign exchange permit, if applicable.
6) 2 passport size photographs
7) Statement of Bank account for the last six months of borrower.
8) Income tax assessment order not more than 2 years old
9) Brief statement of assets and liabilities of borrower.
10)If you are not an existing bank customer you would also need to establish your identity and give proof of residence.
Q) What is the Interest rate charged for Student/education loan ?
Ans) Most banks are vying with each other to aggressively market personal loans. The student loan segment is being viewed as vast untapped potential. Citibank and ICICI Bank are offering equally competitive schemes. Almost every prominent bank in the country has a student loan scheme in some form. What matters the most to an individual is obviously the cost of credit the terms and conditions for education loans. These, like any other loan, vary among banks. Besides pricing of the product, the most important thing is documentation requirement and the quality of service offered by the bank and the speed at which the loan is approved.
Some banks, such as SBI, also give you a choice between fixed and floating interest rate. Whereas, private and foreign banks offer loans with a fixed interest rate, some banks charge interest on a daily or monthly reducing balance.
Repayment – Course period + 1 year or 6 months after getting job, whichever is earlier.
Eligibility for getting a loan:
1.The applicant should be an India National
2.The applicant must have secured admission to professional/ technical courses through Entrance Test/ Selection process
3.Secured admission to foreign university/ Institution
Q) Which Banks are offering Education Loans in India ?
Most of the Private Sector banks, Foreign Banks and Public Sector Banks in India are providing Student Loans. You can visit Banks offering Student Loans in India for an overview of various loan Schemes offered by banks in India.