Education Loan

The Educational Loan Scheme outlined below aims at providing financial support from the banking system to deserving/ meritorious students for pursuing higher education in India. The main emphasis is that every meritorious student though poor is provided with an opportunity to pursue education with the financial support from the banking system with affordable terms and conditions. No deserving student is denied an opportunity to pursue higher education for want of financial support.

1.Eligibility Criteria
• Should be an Indian National
• Secured admission to professional/ technical courses in India or Abroad through Entrance Test/Merit Based Selection process.

2. Courses eligible
Studies in India:
• Graduation courses : BA, B.Com., B.Sc., etc.
• Post Graduation courses : Masters & Ph.D.
• Professional courses : Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc.
• 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.

Banks may have the system of appraising other institution courses depending on future prospects/
recognition by user institutions.

3.Expenses considered for loan
• Fee payable to college/ school/ hostel.
• Examination/ Library/ Laboratory fee.
• Purchase of books/ equipments/ instruments/ uniforms.
• Caution deposit, Building fund/refundable deposit supported by Institution bills/receipts, subject to the condition that the amount does not exceed 10% of the total tuition fees for the entire course.
• Travel expenses/ passage money for studies abroad.
• Purchase of computers – essential for completion of the course.
• Insurance premium for student borrower
• Any other expense required to complete the course – like study tours, project work, thesis, etc.

4.Loan amount you can get
Most of the Public Sector Banks in India have categorized Student Loans in two categories. Students can borrow up to Rs 4 lakhs of rupees without providing any security or margin. A loan amount of Rs 4 lakhs of rupees to Rs 7.5 lakhs of rupees 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.

Note:-
• The loan documents should be executed by both the student and the parent/ guardian as
joint-borrower.
• The security can be in the form of land/ building/ Govt. securities/ Public Sector
Bonds/Units of UTI, NSC, KVP, life policy, gold, shares/mutual fund units/debentures,
bank deposit in the name of student/ parent/ guardian or any other third party with
suitable margin.
• Wherever the land/ building is already mortgaged, the unencumbered portion can be
taken as security on second charge basis provided it covers the required loan amount.
• In case the loan is given for purchase of computer, the computer has to be hypothetical
to the Bank.

5. Repayment
Course period + 1 year or 6 months after getting job, whichever is earlier.

6. Processing Charges
No processing/ upfront charges may be collected on educational loans for studies in India.

7.Documents required for applying a ‘Education Loan’
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 per sanctioned 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.
(i) Mark sheet of last qualifying examination for school and graduate studies in India
(ii) Proof of admission to the course
(iii) Schedule of expenses for the course
(iv) Copies of letter confirming scholarship, etc.
(v) Copies of foreign exchange permit, if applicable.
(vi) 2 passport size photographs
(vii) Statement of Bank account for the last six months of borrower.
(viii) Income tax assessment order not more than 2 years old
(ix) Brief statement of assets and liabilities of borrower.
(x)If you are not an existing bank customer you would also need to establish your identity and give proof of residence.

8. Eligibility for getting a loan
• The applicant should be an India National
• The applicant must have secured admission to professional/ technical courses through Entrance Test/ Selection process

9.Banks are offering Education Loans
Most of the Private Sector banks, Foreign Banks and Public Sector Banks in India are providing Student Loans