How can you get Education Loan from Bank? What are the requirements for Education Loan?

Hello Friends!

Are you looking for education loan for higher studies but don’t know how to get it from Bank, then read the below article completely.

Education loans are categorized in three category i.e. Education loan for study in India, Education loan for Study in Foreign countries and Education loan for Skill Development.

If you are looking for Education loan for Skill Development courses then click on the below link.

https://www.bankerforyou.com/2020/08/govtskilldevelopmentloan.html

Here I will discuss about the Education loan for study in India and in foreign countries.

 

What are the eligibility criteria for students for Education Loan?

Ø  The student should be an Indian National.

Ø  The student should have secured admission to an eligible course in a recognized Institution in India.

Ø  Minim marks secured in the previous qualified exam should be as under:

General-60%, OBC-55%, SC/ST-50%

Ø  There is no restriction with regard to the minimum and maximum age of the student to be eligible for education loan.

Ø  Reimbursement of fees are permitted for the initial year or semester fees only, but can be sanctioned within 6 months from the date of letter of admission.

Whether education loan can be sanctioned to more than one child from the same family?

Ø  Existence of an earlier education loan to the brothers or sisters will not affect the eligibility of another student from the same family to obtain an education loan.

Can you avail the education loan in subsequent year of course?

Ø  Education loan can also be availed in the subsequent year of the course. Means you can also apply for the education loan during any year or Semester.

Ø  The loan can be granted provided that you have not availed loan for initial year from any other bank.

Ø The fees and other expenses incurred for initial years will not be reimbursed buy can be treated as margin.

Ø  Loan will be granted to pursue only one course at a time.

 

What are the eligibility criteria for Co-applicants for Education Loan?

Ø  The parent of the student has to compulsorily join as co-applicant.

Ø In case of married person (student), co-applicant can be spouse/parents/parents-in-law.

Ø  The co-applicant should be an Indian national.

Ø  The income of the co-applicant will not be the criteria for sanctioning education loan.

Ø  If the co-applicant has a adverse credit history and having NPA loans, the bank will not accept him as co applicant.

 

What are the courses eligible for education loan?

Ø  The  employment oriented courses like teacher training courses (DIET), 3 year technical diploma courses in polytechnic after completion of 10^th standard.

Ø  Approved courses leading to graduate/post graduate degree or post graduate diploma conducted by recognized college/ universities recognized by UGG, Govt./AICTE/AIBMS/ICMR etc.

Ø  Curses like ICWA, CA, CFA ect.

Ø  Courses conducted by IIMs, IITs, IISc, XLRI, NIFT, NID etc.

Ø  Regularvdegree/diploma courses like Aeronautical, Pilot training, Shipping etc approved by Director General of Civbil Aviation/Shipping etc of the course is pursued in India.

Ø  Approved courses offered in India by reputed foreign universities.

Ø  Teacher training, Nursing, B.Ed courses will be eligible for education loan provided the training institutions are approved either by the Centra or State government and such courses should lead to degree or diploma courses and not to certificate Course.

Ø  Loan for Part time courses will be offered for studies in India only to the employed and self employed persons.

Ø  The loan for research work (PhD) for studied in India and abroad.

What are expenses covered under education loan?

Ø  Tuition fee payable to college/School/universities.

Ø  Hostel/mess charges

Ø  Examination/library/Laboratory charges.

Ø  Insurance premium for the student borrower.

Ø  Caution deposit, Building fund/refundable deposit supported by institution bills/receipts.

Ø  Purchase of books/equipments/instruments/uniforms.

Ø  Any other expenses required to complete the course like study tours, project work, thesis etc.

Ø  Reasonable lodging and boarding charges with condition that the amount does not exceed 10% of the total tuition fees for the entire course.

 

What are documents required to submit for education loan?

Ø  Application form in Bank’s format

Ø  Credit report in Bank’s format

Ø  KYC documents for applicant/co-applicant/guarantors

·         Identity proof-Pan Card/Voter ID/Passport/Aadhar Card etc.

·         Residence proof-Driving Licence/passport/electricity bill

·         Office/business address proof

·         Latest passport size photograph.

·         ITR or income proof of borrower/co-applicant if any.

·         Last 12 months bank statement of borrower/co-applicant

·         Proof of admission-admission letter

·         Mark sheet and certificate of all exam passed

·         Schedule of expenses for the course.

 

Above are the things mentioned which are required to know to assess your eligibility, your course eligibility and the documents required for applying the education loan.

Now we will discuss about the terms and condition, like loan amount, Margin, repayment period, takeover of education loan, Government subsidy in education etc of the education loan

 

v  Margin: Margin means the part of expenses the borrower need to pay from its own sources.

Loan up to Rs.4.00 Lakh- NIL            Loan above Rs.4.00 Lakh-15%

 

v  Rate of Interest- Rate of Interest as applicable at the time of sanction of the loan. Simple interest will be charged during the course/moratorium period. Compound interest will be charged after completion of course or moratorium period.

v  Servicing of interest during course /moratorium period is optional for the borrower.

v  The accrued interest during course/moratorium period will be added to the principle amount borrowed while fixing the EMI for repayment if the same is not served.

v  If interest is regularly served during the course and moratorium period, prior to the commencement of repayment, then the student is eligible for 1% interest rebate.

v Takeover of education loan is permissible cases. Loan availed from other bank with outstanding of more than Rs.7.50 Lakhs and secured with mortgaged property are eligible.

v  The education loan is repayable in 15 years plus course period+1 yr.

 

v Security requirement- in education loan up to Rs.4.00 lakhs, no security is required. Loan will be covered under CGFSEL. Loan above Rs.4.00 lakhs and up to Rs.7.50 Lakhs, suitable third party guarantee acceptable or the loan will covered under CGFSEL. Loan above Rs.7.50 lakhs, tangible collateral security of minimum value of equivalent to the loan amount and interest accumulation during course & moratorium period acceptable to the bank.

 

Now at this point you are well know about the education loan. But one thing must be moving in your mind .How and where to apply. In which bank or in which branch we should apply for the loan?

Please read the below article on how and where to approach for education loan.

You need to apply through online portal i.e.www.vidyalaxmi.co.in for education loan. You can choose maximum three branches/banks.

Now I suggest you apply in the Branch where you or your family members already have account or to the nearest branch of your residential address.

After submitting the application in the portal, visit the branch personally and discuss about your loan requirement with the loan office of the Branch.

Take application form and credit information form from the branch and submit the compete documents as mentioned above to the branch and follow up regularly with the branch for sanction of the loan.

 

You can also trace your application in Vidya laxmi portal.

 

Further education loan is available for the every segment of the people. It does not matter from which family you belong, what is your financial background, what is your father’s income, whether he is businessman, service man or agrarian, if you are doing well and you know about what & how of the scheme , you will surely be benefited.

 

Government of India has introduced many schemes for different segments of student.

You can get the loan amount up to Rs.7.50 Lakhs without security with coverage of loan under Credit Guarantee Fund Scheme for Education Loan( CGFSEL).

If your family income is less than Rs.4.50 Lakh per year the Interest amount charged in your account during the moratorium period will be subsidized  under the scheme CSIS.

There is also other scheme like Padho Pradesh, ACSISOBCEBS scheme. In some of state , state government also provide such subsidy in education loan.

 

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