Education Loan

For pursuing higher studies, in India & Abroad

• The student should be an Indian National.
• Should have secured admission to a higher education course in recognized institutions in India or Abroad through Entrance Test/ Merit Based Selection process after completion of HSC(10 plus 2 or equivalent).
• Where there is no entrance test/merit based selection process and admission is purely based on the marks scored in qualifying examinations, the student should have scored minimum 50% marks in qualifying examination. (10% relaxation for SC/ST categories).
• However, where entrance test or selection purely based on marks obtained in qualifying examination may not be the criterion for admission to some of the post graduate courses or research programmes. In such cases Branch should take into consideration the employability and reputation of the institution concerned.
• Note: A meritorious student (who qualifies for a seat under mert quota) is eligible for loan under this scheme even if the student chooses to pursue a course under Management Quota.

Term 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 computer at reasonable cost, if required for completion of the course***
• Any other expense required to complete the course – like study tours, project work, thesis, etc.***
• While computing loan required, scholarships, fee waiver etc., if any available to the student borrower may be taken into account
• Notes: ++ For courses under Management Quota seats considered under the scheme, fees as approved by the State Government/Government approved regulatory body for payment seats will be taken, subject to viability of repayment
• * - Reasonable lodging and boarding charge will be considered in case the student chooses / is required to opt for outside accommodation
• ** - These expenses could be considered subject to the condition that the amount does not exceed 10% of the total tuition fees for the entire course
• *** - It is likely that expenditure under Item Nos. vi, vii & viii above may not be available in the schedule of fees and charges prescribed by the college authorities. Therefore, a realistic assessment may be made of the requirement under these heads. However, the maximum expenses included under vi, vii & viii may be capped at 20% of the total tuition fees payable for completion of the course

• Rs. 10 lacs for studies in India.
• Rs. 20 lacs for studies Abroad. The ceilings fixed for studies in India and Abroad correspond to the limits fixed by the RBI for treatment as priority sector lending. However Regional Managers can consider/sanction higher quantum of loan on course to course basis and on merits subject to condition that the loan amount should be backed by 100% liquid security/collateral security. It may also be noted that even loans in excess of Rs. 10 lakh qualify for interest subsidy under Central Sector Interest Subsidy Scheme for loans up to Rs.10 lakh.

Upto Rs. 4 lacs : NIL, Above Rs. 4 lacs:In India – 5% ,Abroad – 15% Margin (scholarship may be included in margin.)

• 1% interest concession may be provided by the bank during the study period, if interest is serviced during the study period and subsequent moratorium period prior to commencement of repayment.
• Interest is calculated at simple basis during Repayment Holiday / Moratorium Period. Interest will be compounded on monthly rests from due date of first instalment.

Payment directly to college / hostel / mess / airlines etc. In appropriate cases disbursement to be made to borrowers subject to satisfactory evidence. Original receipts to be submitted.

• Repayment to commence 12 months after completion of studies or 6 months after securing job whichever is earlier.
• Maximum repayment period upto 10 years for loans upto Rs.7.50 lakh
• Maximum repayment period upto 15 years for loans above Rs.7.50 lakh. Repayment on EMI basis.

• Upto Rs 4 lacs- arent(s)/guardian to be joint borrower(s). Assignment of future income of the student for payment of loan instalments. No security.
• Above Rs.4 lacs and upto Rs7.5 lakhs – Besides the Parent(s)/guardian executing the documents as joint borrower(s), collateral security in the form of suitable third party guarantee will be taken along with the assignment of future income of the student for payment of instalments. The Regional Manager/Senior Regional Manager and above, at their discretion, in exceptional cases, waive third party guarantee if satisfied with the net-worth / means of parent/s who would be executing the document as joint borrower(s).
• Above Rs.7.5 lakhs – Parent(s)/guardian to be joint borrower(s). Tangible collateral security of minimum value equivalent to the loan amount and acceptable to bank, along with the assignment of future income of the student for payment of instalments.

• Comprehensive life insurance policy for the student availing Educational Loan equivalent to loan amount, for a minimum period of loan term (i.e., course period + moratorium period + repayment period) should be obtained and assigned in favour of the Bank.
• Regional Manager is empowered to waive the condition of insurance very selectively but the education loan amount should be covered by 100% liquid security/collateral security.

It need to be noted that while the Central Sector Interest Subsidy Scheme of MoHRD is based on ‘IBA Model Educational Loan Scheme’, the subsidy is applicable only for loans given for Professional and Technical courses (after 12th standard) in India. It may also be noted that even loans in excess of Rs. 10 lakh qualify for interest subsidy under Central Sector Interest Subsidy Scheme of MoHRD for loans up to Rs.10 lakh.

• Educational Loans to students under Management Quota are not covered under IBA Model Education Scheme.
• These loans are not eligible for Central Sector Interest Subsidy Scheme of MoHRD.
• However, Branches can consider educational loans under management quota seats where employment potential is available, subject to the following conditions:
• Fee Structure- The payment/reimbursement of fees is restricted to fee structure as approved by the State Government or regulatory body for payment seats. It should be ensured that the student should have the financial resources to meet the funding gap.
• Security-Parent(s)/guardian to be joint borrower(s). Irrespective of loan amount, 100% tangible collateral security of minimum value equal to loan amount and acceptable to bank should be obtained along with assignment of future income of the student for payment of instalments.
• Others-All other terms and conditions as applicable for Cent Vidyarthi Scheme shall be complied with.

• No Processing/upfront charges may be levied on loans for studies in India sanctioned under the scheme.
• For studies abroad, Rs. 500/- for loan upto Rs. 10 lakh and Rs. 1000/- for loan above Rs. 10 lakh will be charged while considering the applications, but refunded when loan is availed by the student i.e. within 6 months from the date of sanction.