Expenses considered for loan :
- Fee payable to college/ school/ hostel.
- Examination/ Library/ Laboratory fee.
- Travel expenses/ passage money for studies abroad.
- Insurance premium for student borrower, if applicable.
- Caution deposit, Building fund/refundable deposit supported by Institution bills/receipts.
- Purchase of books/ equipments/ instruments/ uniforms.
- Purchase of computers - essential for completion of the course.
- Any other expense required to complete the course - like study tours, project work, thesis, etc.
Eligible Student :
- Should be an Indian National.
- Secured admission to professional/ technical courses in India or Abroad through Entrance Test / Merit Based Selection process after completion of HSC(10 plus 2 or equivalent).
Courses Eligible :
- Studies in India
Approved courses leading to graduate/ post graduate degree and P G diplomas conducted by recognized colleges/ universities recognized by UGC/ Govt./ AICTE/ AIBMS/ ICMR etc. Courses like ICWA, CA, CFA etc. Courses conducted by IIMs, IITs, IISc, XLRI, NIFT, NID etc.Regular degree/diploma courses like aeronautical, pilot training, shipping etc., approved by Director General of Civil Aviation/Shipping, if the course is pursued in India. Approved courses offered in India by reputed foreign universities. Teacher Training/Nursing/B.Ed. courses will be eligible for education loan provided the training institutions are approved either by the Central Government or by State Government and such courses should lead to degree or diploma course and not to certification course.
- Studies abroad
Graduation: 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. Degree/diploma courses like aeronautical, pilot training, shipping etc. provided these are recognized by competent regulatory bodies in India/abroad for the purpose of employment in India/abroad.
Quantum of finance :
- Need based finance subject to repaying capacity of the parents/ students with margin and the following ceilings.
- Studies in India - Maximum Rs.10.00 lacs.
- Studies abroad - Maximum Rs.20.00 lacs.
- Upto Rs 4 lacs : Nil.
- Above Rs 4 lacs : Studies in India 5% Studies Abroad 15%.
- Loans Upto Rs 4 lacs - Co obligation of parents.
Further wherever parents are not there banks could consider grandparent as co obligator to the loans taking into account their net worth.
- Above Rs 4 lacs and upto Rs. 7.5 lacs.
Co obligation of parents along with Collateral in the form of a suitable third party guarantee for 100% of the loan amount to be taken.
- For cases above Rs 7.5 lacs.
Co obligation of parents along with Collateral security of 100% value of loan.
Assignment of future income of the student for payment of the loan instalments for all loans.
The co-obligator should be parent(s)/guardian of the student borrower. In case of married person, co-obligator can be either spouse or the parent(s)/parents-in-law.
Rate of Interest :
- Interest will be Base rate plus applicable margin as decided by bank.
At least 0.50% concession in interest rates on Education Loans to girl students for pursuing higher education in India and abroad
Penal interest @2%
Repayment / Holiday :
- The repayment holiday shall be a year more than the period of the course or 6 months after the borrower gets a job, whichever is earlier.
- The loan shall be repaid in 5 - 7 years after commencement of repayment
- Prepayment permitted without any charges.
Processing Charges : Nil
Government of India in consultation with Reserve Bank of India (RBI) and Indian Banker's Association (IBA) has framed a Comprehensive Educational Loan Scheme to ensure that no deserving student in the Country is deprived of higher education for want of finances. The new scheme covers all type of courses including professional courses in schools and colleges in India and abroad.
The Salient features of the scheme are as under:
The scheme envisages loans up to Rs.7.5 lakh for studies in India and up to Rs. 15 lakh for studies abroad.
For loans up to Rs. 4 lakh no collateral or margin is required and the interest rate is not to exceed the Prime Lending Rates (PLR). For loans above Rs. 4 lakh the interest rate will not exceed PLR plus 1 percent.
The loans are to be repaid over a period of 5 to 7 years with provision of grace period of one year after completion of studies
Repayment of an education loan is deductible under section 80E of the Income Tax Act. The yearly limit for deduction is Rs. 40,000 (for both the principal and the interest). Only loans taken for higher education - full time studies in any graduate or post-graduate, professional, and pure and applied science courses - may claim deduction. The deduction will be available for a maximum of eight years starting from the day you start repaying.
Equitable Access to quality higher education has been a concern of the University Grants Commission. To this purpose the Commission, besides encouraging colleges and universities to provide for liberal financial support to the meritorious but needy students, has also been instrumental in educational loan scheme. The Reserve Bank of India (RBI) has issued guidelines in this regard to all commercial banks. A large number of banks have already launched educational loan schemes. Provided below are links to the respective website of individual banks offering such facilities.
Studies in India:
- School education including plus 2 stage
- Graduation Courses: B.A., B.Com., B.Sc., etc.
- Post Graduation Courses: Masters & Ph.D.
- Professional Courses: Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer, etc.
- Computer certificate courses of reputed institutes accredited to Department of Electronics or institutes affiliated to university
- Courses like ICWA, CA, CFA, etc.
- Courses conducted by IIM, IIT, IISc, XLRI, NIFT, etc.
- Courses offered in India by reputed foreign universities
- Evening courses of approved institutes
- Other courses leading to diploma / degree etc. conducted by colleges / universities approved by UGC / Govt. / AICTE / AIBMS / ICMR etc.
- Courses offered by National Institutes and other reputed private institutions
- Graduation: For job oriented professional / technical courses offered by reputed universities
- Post Graduation: MCA, MBA, MS, MBBS etc.
- Courses conducted by CIMA - London, CPA in USA etc.
- Should be an Indian National
- Secured admission to professional / technical courses through Entrance Test / Selection process
- Secured admission to foreign university / institutions
- Should have scored minimum 60% (50% for SC/STs) in the qualifying examination for admission to graduation courses
Disclaimer: Since the rules, regulations, eligibility conditions, repayments and interests rates etc are revised by the banks from time to time in keeping pace with the changing capital market conditions, students and parents are advised to thoroughly check the terms and conditions of educational loan scheme on offer at the time of application.