banking 100 mrk

8/13/2019 Banking 100 Mrk

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INDEX

1 INTRODUCTION OF EDUCATION LOAN

2 TYPES OF EDUCATION LOAN

3 ADVANTAGES & DISADVANTAGES

4 OBJECTIVES OF EDUCATION LOAN

5 WHEN, WHERE, HOW TO APPLY FOR LOAN

6 STUDENT LOAN CONSOLIDATION

7 EDUCATIONAL LOAN SCHEME FOR PURSUING HIGHER

STUDIES IN INDIA AND ABROAD

8 DOCUMENTS REQUIRED AT THE TIME OF SANCTION OF

EDUCATIONAL LOAN

9 COMPARISION FACTORS FOR BEST EDUCATION LOAN

10 INCREASE EDUCATION LOAN LENDING:NAIR COMMITTEE

RECOMMENDATION

11 SBI BANK

12 AXIS BANK

13 CURRENT NEWS REGARDING EDUCATION LOAN

14 RESEARCH

15 CONCLUSION


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INTRODUCTION:

Education loan in India

Now, Education Loans are easily available from various banks in India. Many

Nationalized banks are coming up with various Educational Loan schemes and

more students can take up higher education despite of their financial problem.

Constitution of India lists Right to Education as one of the fundamental rights.

Tough this only covers education till the age of 14 years, but over the year

number of students graduating from various institutes have increased. Infact,

educational loan is one of the most crucial loans that one avails throughout their

lives. As per the Ministry of Finance directives, education comes under the

priority sector. So the government makes sure that the interest of the students is

always preserved at the same time keeping the interest of the lenders intact.

To meet this ever growing demand for educational loans the Indian Banks

Association (IBA) devised Model Educational Loan Scheme in 2001. The

scheme was conceptualized by a recommendations of a study group of IBA,

which was approved by RBI and given to banks for accepting and implementing

in their education loan products.

An Education loan is designed to help students pay for college tuition, books,

and living expenses. It differs from other types of loans in that the interest rate

is substantially lower and the repayment terms are easy. An education loan is a


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form of financial support from any bank or financial institution that enables a

student for taking higher education. Availability of the education loan, at the

appropriate time can help millions of deserving bright young Indians to achieve

their dreams come true. All graduation, post-graduation and professional

courses from institutes approved by the state and central government and also

from foreign universities are eligible for loan.

These days education comes with a cost and higher education seems to be

proving costlier day by day.

The question haunting most of the deserving students, whose parents / guardians

are not rich enough, is with respect to any available financing options. To

support such students so that they may not left behind from the main league of

education, the government of India has formulated Educational Loan Scheme.

Two banking and financial Apex Bodies, the Reserve Bank of India (RBI) and

Indian Bankers Association (IBA) have helped the government in preparing the

plan and procedure for educational loans. The new scheme covers all types of

courses including professional courses in schools and colleges in India and

abroad.

The rising cost of higher education has become a big cause of worry for

students and parents alike. How will one be able to fund the huge expense

required for professional courses is the prime concern for people seeking to

increase their qualifications. If a student is seeking to go abroad for pursuing

higher studies, the costs are far greater as compared to studying in India. An

education loan to pay for the high tuition fees and other associated costs is fast

becoming a need for an ambitious student.


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Education loan is a special purpose loan given by banks and financial

institutions to cover the cost of any higher degrees or specialized courses. The

education loan provided by banks in India cover the fee Payable to the College,

School or Hostel. It also covers the examination fee, library fee, lab fees,

caution deposits, refundable deposit asked by the institution. Building fund

supported by Institution bills or receipts, Purchase of Books, equipments,

instruments, uniforms, Travel expenses/passage money for studies abroad,

purchase of computers - essential for completion of the course and any otherexpense required to complete the course - like study tours, project work, thesis,

etc are also covered.

Banks provide great financial help needed to cover almost all the expenses

incurred for a successful completion of the desired course. Banks in India now

cover a wide spectrum of courses in their education loan schemes. Catering both

to under graduate and post graduate courses, banks readily provide education

loans for management, engineering, medicine, MCA, fine arts, designing,

architecture, hotel management, agriculture, pure sciences, arts and commerce

courses. Banks do consider the reputation and affiliation of institute from where

the course is being conducted, before giving any educational loan. Indian banks

while providing education loans require that the applicant must be a resident

Indian having secured admission in any of the bank's list of approved course oruniversities. Whether you get 100% of the cost of education as education loan

or not, depends on individual banks.


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TYPES OF EDUCATIONAL LOANS:-

Want to study ahead but the fees are too high? Looking for a way to fund your college studies? All

you need is an Education Loan. There are a variety of education loans out there, available for all

students. What needs to be done is to gain a detailed knowledge about all of them, before you

decide which one of them suits you the best.

Broadly, there are two types of education or student loans:

Federal Loans

Federal loans are one of the commonly opted for loans, like the Stafford Loans, Perkins Loans, and

PLUS loans. These loans are basically financed by the government, but they are taken out through

financial organizations and firms.

Out of the above mentioned three loan schemes, the Stafford and Perkins loans are two of the

frequently opted for loan schemes by the undergraduates. The main reason for this is that these two

loan schemes are generally known for giving reasonably low loan interest rates to their student

applicants.

In the case of Federal loans, the student loan rate of interest is decided by the government and

controlled by the current financial system, because these loans are given to those applicants who

are able to show that they have considerable financial need.

Private Loans

Private loans are those offered by private financing firms and organizations or schools. Often it

happens that many students cannot qualify for federal loans. In such cases, Private loans come to

their rescue. Eligibility for Private loans often depends on a students credit score.

Since many different financial firms offer Private loans services, the loan interest rate of each of

them varies from one another. Therefore, it is always best to look around to find the best loan rate

which is also the lowest interest rate for a Private loan which you can qualify for.

An educational loan is a kind of a monetary support that has to be reimbursed on time. There are

various types of loan alternatives which can assist you. Educational loan can be a vital element withyour monetary assisting as a whole. It does not matter whether you opt to study at university level,


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at a college or at a private school, education overall has become expensive and beyond the reach of

many.

If you are worried about your school fee, college education or further studies, dont be! Loan Bazaar

brings you the best schemes at the lowest price to make your dram education a reality by providing

you best education loans.

Loan Bazaar allows the students to reimburse the loan slowly and after completion of their

graduation. This way the students can give all their attention to the studies and not towards the loan

worries.

Also, majority of the loans enable the students to postpone or delay the payment of the loan by at

least six months after completion of their graduation. This enables the students to get a suitable job

and they can pay off their loans with ease.

There are various loans that are made by various schools, government and private organizations.

Most of them provide very minimal interest price. Some are created on the basis of the needs and

some are not. At Loan Bazaar, seeing the fact that there are many students those who are having

different requirements and desires, there are a variety of educational loans created suitably for the

students, helping them with their monetary issues.

Higher education seems out of reach to many these days. To take thousands of dollars as a loan to

pay as an education fee seems a scary idea. Also, majority of students are hesitant whether to take

up a student loan for further education or not.

Loan Bazaar provides all the students with educational loans which will aid them by making

payments for their education fee and getting a suitable job with a handsome salary and satisfying

future prospects.

In the professional arena nowadays the basic criteria is the college study. So we provide educational

loans that can be a real asset in securing the future of the students.

ucational loans can be termed as a type of a monetary assistance such as funding, rewards, financing and scholarships, which

en borrowed in cash, have to be returned with some added interest. It is always advisable to borrow according to the need.

eLoanBazaar.com provides loans to the students and also to the parents, after all the other additional monetary assistances have

en evaluated.

e repayment period for such loans mostly depend from lender to lender as well as on the overall amount that the student opts

borrow at first place. Majority of the student loans have low rate of interests and the students dont have to make a payment for

interest till a specific time period, although there are certain exemptions to this rule too.

be entitled for loans from TheLoanBazaar.com, all you have to do is fill up a Free Application for Federal Student Aid.

hould be noted that the interest price is dynamic and can change periodically. We at TheLoanBazaar.com also provide loans for

residence and help you bear the cost of the procedure of getting transferred from one place to another and for the interview or

y conference.


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e different types of student loans are offered by us. These are:

dergraduate student loans

s a type of unsecured loan offered by TheLoanBazaar.com to be used for education-related expenses. In case you are not

rently earning while studying or do not meet our policies for eligibility criteria, you may need a suitable cosigner, like a parent,

end or any relative or eligible adult.

s type of undergraduate student loan includes your Tuition, previous school fee, living expenses, books and other expenses like

nsportation costs.

hile the funds are sent directly to the student, TheLoanBazaar.com also offers competitive interest rates and flexible repayment

ms, wherein the repayment can also begin after graduation. With quick application process and easy to fill up application form,

ting could not get any simpler.

aduate/ professional students

aduate/ professional student loans are basically suitable for students who higher or advanced degrees at nationwide colleges.

ese are the type of unsecured loans offered by TheLoanBazaar.com to be used for education-related expenses. In case you are

t currently earning while studying or do not meet our policies for eligibility criteria, you may need a suitable cosigner, like a

rent, friend or any relative or eligible adult.




reer education loans

reer education loans are basically available for students who are attending the undergraduate career oriented programs at

ionwide colleges and technical and trading schools.

ese are the type of unsecured loans offered by TheLoanBazaar.com to be used for education-related expenses. In case you aret currently earning while studying or do not meet our policies for eligibility criteria, you may need a suitable co signer, like a

rent, friend or any relative or eligible adult.




lege parents loans

s a type of unsecured loan offered by TheLoanBazaar.com to be used for education-related expenses. In case your child is

rently studying and now working alongside, you can take up the loan by being a co signer.


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s type of loan can help you assist your child with any kind of undergraduate/graduate or career education plan in college. And

ats more, you do not even have to keep collateral and do not have to sell away your homes, investments money for the school

d college fee of your child.

s type of undergraduate student loan includes your Tuition, previous school fee, living expenses, books and other expenses like

nsportation costs. With quick application process and easy to fill up application form, getting could not get any simpler.

2 Parents loans

s a type of unsecured loan offered by TheLoanBazaar.com to be used for education-related expenses. It is basically available to

rents and other adult relatives for their children who are attending non-public, private, religious, military elementary and

ondary schools countrywide.

s type of K 12 Parents loans include your childs tuition fee, uniforms, previous school fee, living expenses, books and other

penses like transportation costs. With quick application process and easy to fill up application form, getting could not get any

mpler.

hile the funds are sent directly to you, TheLoanBazaar.com also offers competitive interest rates and flexible repayment terms,

erein the repayment of principal and interest begins 30-60 days after the loan is laid out.


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ADVANTAGES & DISADVANTAGE OF EDUCATIONAL LOAN:-

Advantages of Educational Loans: An educational loan will help the student to

join a course which he wishes to study. It will make him financially adapted to

the increasing financial needs during the time of his professional education.

After completing the course, you can easily payback the amount to the lender in

installments. The commitments involved in educational loans are very

reasonable and this is the main reason behind the popularity of these loans.

The application process for an educational loan is pretty easy. You can apply for

an educational loan by visiting the bank in person or by visiting the online

website of the bank. Almost all the banks all over the world provide online

application facility and this makes it a comfortable task.

An educational loan can be considered as an effective alternative for

conventional bank loans. They offer reasonable interest rates and you will get abasic amount without any submitting any collateral. The repayment process is

also very attractive. There is no need of paying the money during your time of

study. It will also help you to save income taxes during time of repayment.

Disadvantages of Educational Loans: Almost all financial institutions that

provide educational loan aims at increasing their profits and they are not that

much concerned about the students. There are many students who get trapped in

unsuitable educational loans and the main reason behind it is lack of proper

knowledge. Banks who provide educational loans used to charge an additional

late fee if the amount is not repaid in time. In the early days, almost all banks

will not disclose the provision of late fee. In many cases, students will not get a

proper job after their studies. During this time, they will be under huge financial

stress. Also, they will hold the long term liability of stress due to these


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educational loans, and they will struggle a lot to cop up with their monthly

financial needs. So, it is highly necessary to think twice before availing an

educational loan.


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OBJECTIVES OF THE EDUCATION LOANS

According to a survey approximately the number of students who will graduate in

the year 2010 will be having a credit balance of 30,000 pounds. Adding to this a

normal student opting for further education at university level will be having a

credit balance of approximately 10, 000 pounds.

Probably the students might not get a job with a decent salary for many years

after completing their graduation. Sadly their salary will also not be sufficient for

paying the balance they have gathered.

Loan Bazaar provides students with education loans even if the government does

not give much importance to the educational loans provided by private institutes

and organizations. So even if you are not able to meet the educational expenses

with other financial assistance, we provide the students the educational loans that

will help them to pursue their graduation. We provide various loans for the

students and it can be used by both non conservative and usual students.

We at Loan Bazaar assist and guide the students what amount will be sufficient as

an educational loan and what can be easily refunded. We recommend that the

approximation for the finance should always be more rather than minimal. This

can help for being sure that the amount you are getting financed for youreducation is not less. We advice you to always be aware of your sources while

ou make a decision about how much credit you need for your education. You

can also use some amount to pay the expenditure for your education if you are

employed somewhere or have some amount saved.

Usually the federal educational loans are not sufficient to meet the expenses of

the education as they have strict guidelines and have some precise time period to


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WHEN, WHERE AND HOW TO APPLY FOR EDUCATIONAL LOAN

Making a decision of further education after graduating from a high school is

not an easy task. University can be very costly and even if you take suitable

amount of loans, it can take a long time to refund the loans even if you start

earning. Nowadays in the market there are various lenders and loan

organizations those who provide college loans. Various lenders offer students

handsome loan schemes and suitable refunding schemes. This is the reason that

the students are recommended to take a decision only after a thorough study of

the loan lending associations.

You can search online at our website, theloanbazaar.com for various kinds of

student loans.

The main factor why online loans should be applied for is that these are

unsecured loans, so your bank accounts and home equity are safe.

The online student loans from our website are more reliable and fast and it

needs no governmental applications, no fixed time period, and it gets approved

quickly.

The student loans that we offer have minimal rate of interest and can be easily

afforded.

We do not require any filling any forms and has minimal paperwork.

How to apply for student loans on internet?

You can apply for the online student loan through our website,

theloanbazaar.com where our companys professional will guide and assist you.


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For getting a student loan you can choose suitable online student loan programs

at our website.

By providing two personal referral names and you will be entitled for a student

loan.

Also required are your full details, name, and address.

Showing the balance and current rate of interest of student loans will also be

required to get you online student loan.

Getting an online student loan at our The Loan Bazaars website is verysimple

as it takes lesser time period, minimal paper work, and provides the students

with suitable rate of interest. It is advised that before applying for any online

student loan you conduct a detailed survey of other companies and

organizations offering online student loans.

There are various kinds of financial assistance that we provide in the shape ofgrants, loans, and scholarships.

When to apply for a student loan?

Following are some principles that have to be kept in mind while applying for

some financial aid:

They should be applied for roughly three to four years before planning to join

some college

Do sit in the PSAT (Preliminary Scholastic Aptitude Test). If you score good

grades you probably be entitled of receiving a National Merit Scholarship.

Get to know different aids available, for that meet a Financial Aid Officer while

you are in the college.

Where to apply for online student loans?


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By filling a form free of cost at our website, it will act as a key to all the grants

and loans at the state level. Make sure that you list your preferences for joining

the schools. Keep the copies of all the respective forms or applications that you

submit.

Fill in the returns for the tax as soon as possible, so that you keep a track of the

taxes you have paid.

Do send mid year records to the school/college you have applied with.

Keep a track of which financial aid form is required by the college and when the

forms are due to submit.

Confirm each and every office to make sure that the form is complete. Cross

check what else is needed to maintaining eligibility to receive a financial aid.


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make a payment for the loan anytime. Low payments of the consolidation can

be of great help for the first couple of years till your graduation and till your

salary matches with your education. As and when you become capable of full

earning you can begin making large payments that will be helpful in reducing

the term of your loans and help in cutting the rate of interest down.

3- Graduating

Since you are at a school level you do not have to make a loan payment. The professionals at

TheLoanBazaar.com suggest that having a consolidation lender will be quite beneficial and this way

you will be less worried after you have left the school.

4- Loan Excusing

It entirely depends at what stage of degree you are in for getting entitled for a long forgiveness. The

students who work with low income and in the areas where they have to serve the public are

entitled for loan forgiveness by TheLoanBazaar.com. Getting entitled for loan forgiveness is not

affected by the consolidation. We assist you to make up your mind for student loan consolidation.

5- Having different lenders

Probably you will encounter with many creditors as you complete your graduation. You will get few

advantages by consolidating them in one loan. Firstly, to have less lenders will only assist your credit

score and secondly you just have to make single payment in a month.

6- Plans for payment

While having a loan from TheLoanBazaar.com there is some specific payment

plan and generally it is a flat payment for the loan. Various repayment

alternatives are provided by consolidation that consists of graduated payments,

income sensitive payments, and extended payments. Having alternatives helpsin making a plan to make the payment of the loans on time.

7- Incentives on repayment

We at TheLoanBazaar.com provide with repayment incentives. Get familiarizedwith all the choices and schemes at our website while you are applying. Wemake sure that the consolidation gets you the majority of the savings. You

should be aware of those lenders who offer cash back incentives but generally

they give you little savings in the future.

8- Majority of the student loans are on a variable rate but now it has slowly picked up pace for the

last few years. Consolidating them is the best option to fix the rate of interest on the loans.

We help you decide and getting the best rate of interest and to decide the best method to

consolidate your loans.


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EDUCATION LOAN BY BANKS IN INDIA

Allahabad Bank Andhra Bank

Axis Bank Bank of Baroda

Bank of India Bank of Maharashtra

Canara Bank Catholic Syrian Bank

Central Bank of India Centurian Bank of Punjab

City Union Bank Ltd. Corporation Bank

Dena Bank Federal Bank

HDFC Bank HSBC Bank

ICICI Bank IDBI Bank

Indian Bank Indian overseas Bank

Karnataka Bank Oriental Bank Of Commerce

Punjab & Sind Bank PNB

State Bank of India Saraswat Bank

UCO Bank Union Bank of India


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Rs. 7.5 lakhs. We have been receiving enquiries from members seeking

clarifications on the various provisions of the scheme based on feedback

received from the branches. With a view to ensure that the scheme is

implemented in letter and spirit, it was decided to review the scheme and make

modifications in the scheme to facilitate smooth operation at bank branches.

Towards this, a Working Group of General Managers drawn from select banks

was constituted at IBA. This revised model scheme has been prepared based on

the suggestions made by the Group.

2. OBJECTIVES OF THE SCHEME

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 and abroad. 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.

3. APPLICABILITY OF THE SCHEME

The scheme detailed below could be adopted by all Commercial Banks. The

scheme provides broad guidelines to the banks for operationalising the

educational loan scheme and the implementing bank will have the discretion to

make changes suiting to the convenience of the students/ parents to make it

more customer friendly. The scheme details are as under.

4. ELIGIBILITY CRITERIA

4.1 Student eligibility: Should be an Indian National


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Secured admission to professional/ technical courses in India or Abroad

through Entrance Test/ Merit Based Selection process.

4.2 Courses eligible a. Studies in India: (Indicative list)

Graduation courses : BA, B.Com., B.Sc., etc. Post Graduation courses :

Masters & Phd. Professional courses : Engineering, Medical, Agriculture,

Veterinary, Law, Dental, Management, Computer etc. Computer certificate

courses of reputed institutes accredited to Dept. of Electronics or institutes

affiliated to university. Courses like ICWA, CA, CFA etc. Courses conducted

by IIM, IIT, IISc, XLRI. NIFT 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. In case the course is

pursued abroad, the Institute should be recognized by the competent local

aviation/shipping authority 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. Banks may have the system of appraising

other institution courses depending on future prospects/ recognition by user

institutions. Courses, which are not covered under the criteria mentioned

above, individual banks may take a view to consider extending education loan

under the scheme taking into account the future prospects/recognition by user

institution.

b. 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.


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4.3

supported by Institution bills/receipts, subject to the condition that the amount

-

for student

- like studytours, project work, thesis, etc.

5. QUANTUM OF FINANCE Need based finance subject to repaying capacity

of the parents/ students with margin and the following ceilings.

India - Maximum Rs.10.00 lacs. - Maximum Rs.20 lacs

6. MARGIN

UPTO RS. 4 LACS NIL

ABOVE RS. 4 LACS STUDIES IN

INDIA

5%

STUDIES ABROAD 15%

- Scholarship/ assistantship to be included in margin. - Margin may be brought-

in on year-to-year basis as and when disbursements are made on a pro-rata

basis.

7. SECURITY

UPTO RS 4 LACS Co-obligation of parents. No security


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Above Rs.4 lacs and upto Rs7.5 lakhs Co-obligation of parents together with

collateral security in the form of

suitable third party guarantee. The

bank may, at its 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 "jointborrower".

Above Rs.7.5 lakhs Co-obligation of parents together with

tangible collateral security of suitable

value, along with the assignment of

future income of the student for

payment of instalments

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 hypothecated to the Bank.

8. RATE OF INTEREST


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Upto Rs 4 lacs BPLR

Above Rs. 4 lacs BPLR + 1%

Simple interest to be charged during the Repayment holiday/ Moratorium

period.

Penal interest to be charged as applicable to individual banks.

9. APPRAISAL / SANCTION/ DISBURSEMENT

In the normal course, while appraising the loan the future income prospects of

the student will be looked into. However, where required, the means of parent /

guardian could also be taken into account to evaluate re-payment capability.

The loan to be sanctioned as per delegation of powers preferably by the Branch

nearest to the place of residence of parents. No application for educational loan

received should be rejected without the concurrence of the next higher

authority. 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.

10. REPAYMENT

Repayment holiday/Moratorium Course period + 1 year or 6 months

after getting job, whichever is earlier.


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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. The accrued interest during

the repayment holiday period to be added to the principal and repayment in

Equated Monthly Instalments (EMI) fixed. 1% interest concession may beprovided for loanees if the interest is serviced during the study period when

repayment holiday is specified for interest/ repayment under the scheme.

11. INSURANCE Banks may arrange for life insurance policy on the students

availing Educational Loan. Individual Banks may work out the modalities with

insurance companies

12. FOLLOW UP/TRACKING: Banks to contact college/ university authorities

to send the progress report to the bank at regular intervals in respect of students

who have availed loans. In case of studies abroad, bank may obtain the Unique

Identification Number (UIN)/Identity Card and note the same in the bank's

records.

13. PROCESSING CHARGES No processing/ upfront charges may becollected on educational loans for studies in India.

14. CAPABILITY CERTIFICATE: Banks can also issue the capability

certificate for students going abroad for higher studies. For this purpose

financial and other supporting documents may be obtained from applicant, if

required.


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(Some of the foreign universities require the students to submit a certificate

from their bankers about the sponsors' solvency/ financial capability, with a

view to ensure that the sponsors of the students going abroad for higher studies

are capable of meeting the expenses till completion of studies.)

15. OTHER CONDITIONS:

a. Meritorious Students Banks which wish to support highly and exceptionally

meritorious/ deserving students without security may delegate such powers to a

fairly higher level authority.

b. Multiple Loans In case of receipt of application for more than one loan for

student borrower from a family, the 'family' as a unit has to be taken into

account for considering the loan and security taken in relation to the total

quantum of finance disbursed, subject to margin and repaying capacity of the

parent/student.

c. Minimum Age There is no specific restriction with regard to the age of the

student to be eligible for education loan. d. Change of Address In cases of

student staying with parents and where such parents have transferable jobs or

there is change in address, the bank may provide in the system of noting the

address for correspondence' for tracking purpose. e. Top up loans Banks may

consider top up loans to students pursuing further studies within the overall

eligibility limit, with appropriate re-schedulement, subject to taking required

security. f. Co-obligator 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 . No Due Certificate No due certificate need not

be insisted upon as a pre-condition for considering educational loan. However,

banks may obtain a declaration/ an affidavit confirming that no loans are availed


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from other banks. Disposal Application Loan applications have to be disposed

of within a period of 15 days to 1 month, but not exceeding the time norms

stipulated for disposing of loan applications under priority sector lending.

Flexibility in terms In order to bring flexibility in terms like eligibility, margin,

security norms, banks may consider relaxation in the norms on a case-to-case

basis delegating the powers to a fairly higher level authority.

Model Educational Loan Scheme

The prime motive of the scheme is to benefit the "meritorious" students

irrespective of their economic background. The IBA defines meritorious

students as " If the student has obtained admission to an eligible course through

a merit based selection process, he/she could be considered a meritorious

student." The banks have also enlisted the courses for which the loans would beavailable, though the list is not all inclusive , the bank reserves the right to

sanction or reject the loan based on employability of the course. There has been

a debate going off-late on whether the students getting admission

undermanagement quota be given education loans or not.

Apart from eligibility of student and course, norms pertaining to important

facets of loan such as security/collateral, guarantee, interest rates, moratorium

period, repayment tenure, margin et al are all covered under the scheme.


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Some of the key-features of educational loan scheme are mentioned below

The scheme provides loans up to Rs. 10 lakh for studies in India and up to Rs.

20 lakh for studies abroad.

For loans up to Rs. 4 lakh no security or margin is necessary 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 paid back over a period of 5 to 7 years; there is provision ofgrace period of 1 year after completion of studies.

Tax Benefit- The repayment of an educational loan is deductible under section

80E of the Income Tax Act. The annual limit for deduction is Rs. 40,000 (for

both the principal and the interest). Only loans borrowed 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 paying back

LOAN FEATURES :-

LOAN

AMOUNT

Loans upto Rs.15 Lakhs for Education in India and upto Rs.20

Lakhs for Education abroad

INTEREST

RATE

Information not available

TENURE Repayment to start 1 year after course completion / 6 months

after obtaining employment (whichever is earlier). Loan

available upto tenure of 7 years including moratorium period

PRE- Upto 4% of the Principal Outstanding after 6 months of


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PAYMENT

CHARGES

repayment

Service

ChargesProcessing Fee: Upto a maximum 2% of the loan amount


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Documents Required education loan India

The following documents are required along with your loan application:

Purpose Salaried Others

Proof of identity

Passport or Voter's ID card or

driving license or PAN card or

government department ID card

Passport or Voter's ID

card or driving license or

PAN card

Proof of income

Latest salary slip showing all

deductions or Form 16 along with

recent salary certificate

IT returns for the last 2

ears and computation

of income for the last 2

ears certified by a CA

Proof o

residence

Bank account statement or latest

electricity bill or latest mobile or

telephone bill or latest credit card

statement or existing house lease

agreement

Bank account statement

or latest electricity bill

or latest mobile or

telephone bill or latest

credit card statement or

existing house lease

agreement

Bank statement

or Pass Book

where salary or

income is

credited

Last 6 months Last 6 months

Guarantor form Optional Optional

Other

Documents

Copy of admission letter of the

Institute along with Fees

Copy of admission letter

of the Institute along


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schedule, mark sheets / pass

certificates of S.S.C, H.S.C ,

Degree courses

with Fees schedule,

mark sheets / pass

certificates of S.S.C,

H.S.C , Degree courses

Eligibility Criteria : Education Loan

Salaried Self

Age 16 - 35 yrs 16 - 35 yrs

Income Income Criteria Not Available Income Criteria Not Available

Job Experience Information not available Information not available

Residence

ProofValid Residence proof Valid Residence proof


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Docs Required : Education Loan

Salaried Self

ID Proof

Co-Applicants Passport Copy/

Voters ID card/ Driving

Licence/Copy of PAN

Card/Other valid ID

Co-Applicants Passport Copy/

Voters ID card/ Driving

Licence/Copy of PAN

Card/Other valid ID

Address Proof

Passport/Voters ID/Driving

License/Latest Electricity

bill/Latest Landline Telephone

Bill/Any other Valid Address

proof

Passport/Voters ID/Driving

License/Latest Electricity

bill/Latest Landline Telephone

Bill/Any other Valid Address

proof

DOB Proof Birth Certificate Birth Certificate

Financial Docs

Co-Applicant Salaried

Individual:

Latest 6 Months Bank

Statement of the Salary

Account

carrying date of joining details

Self Employed (Professionals) :

Self Employed :

Last 2 Year ITR with

Computation of Income

Last 2 Years Audited Balance

Sheet

Last 6 Months Bank Statement

Proof of Turnover (Latest

Sales / Service Tax Return)


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Self Employed - Professional :




Sheet / P& L


Proof of Qualification

Self Employed :




Sheet


Proof of Turnover (Latest Sales

/ Service Tax Return)

Self Employed - Professional :




Sheet / P& L


Proof of Qualification


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OTHER CHARGES:- EDUCATIONAL LOAN

Description of Charges Amount of Charges

No Due Certificate / No Objection

Certificate (NOC)

Nil

Solvency Certificate Not applicable

Charges for late payment of EMI @ 24 % p.a. on amount outstanding

from date of default

Credit assessment charges Not applicable

Non standard repayment charges Not applicable

Cheque swapping charges Upto Rs. 500/- per event

Loan cancellation / re-booking

charges / Re-scheduling

Upto Rs. 1000/-

Bounce Cheque Charges Upto Rs. 450/- per Bouncing

Stamp Duty and other atatutory

charges

As per applicable laws of the state

Legal / incidental charges At actual


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Documents from Student

* Completely filled Application Form with Photographs.

* Letter of admission from the Institute.

* Cost break up of the program from the Institution stating the Tuition fees-

term-wise, year-wise and any other expenses.

* Students entire academic record in the form of marksheets starting from classX to the last qualifying exam cleared.

* Declaration/Affidavit confirming that no loan has been availed from other

Bank/Institution.

* Address Proof: Passport, Driving license, Ration Card, Voter's ID Card, Bank

statement.

* ID Proof: Photo Pan Card, Passport, Driving License or Voter's ID card.

* Signature Proof: Bank Signature Verification, Photo Pan Card, Passport,

Driving License or Voter's ID card.

* Age proof: Bitrth Certificate or 10th Class passing Certificate.

Documents for Studies Abroad - In addition to the above list of documents:

* Letter from the Head Of Department of the University.

* Visa approval papers.

* Travel papers.

* GMAT/GRE/SAT score.

* I-20 in case of applicant going to the USA.

* Progress reports in the form of mark sheets or a letter from the Institute, whileprocessing the fresh disbursement tranch.


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Documents for Co-Applicant if Salaried:


* Address Proof: Ration card Telephone or electricity/water Bill, Rental

agreement, Passport copy.

* Bank Statements for last 3 months.

* Latest salary slip or current dated salary certificate with latest Form 16

Documents for Co-Applicant if Self employed (Professionals/Individual ):


* Address Proof: Ration card Telephone or electricity/water Bill, Rental

agreement, Passport, Trade licence /Establishment/Sales Tax certificate.

* Latest ITR along with computation of income, B/S & P&L a/c for the last 2

yrs. certified by a CA.

*Qualification proof of the highest professional degree.

*Proof of continuation of business :Trade licence /Establishment /Sales Tax

certificate.

*Sole Propieter Declaration Or Certified Copy of Partnership Deed, Certified

Copy of MOA, AOA & Board resolution.

Documents Required Post Loan Sanction:

* Education Loan Agreement.


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* SI/ECS Mandate as applicable.

* Post Dated Security Cheques as per Bank Policy.


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The best education loan from banks in India: 6 factors to compare

Is pursuing a course of your choice abroad one of the priorities of your life? Do

you want to be among the top notch professional with a reputed foreign

university degree under your belt? Chances are good that to fulfill all these

aspirations you will need an educational loan. Staying and living abroad along

with the payment for your choice of course require a huge amount of money.

With the recent spurt in global economy these costs are rising even further.

However, leading banks in India are more than willing to be a part of your

dream.

Be it SBI, ICICI bank, HDFC bank, Citibank, Bank of Baroda, AXIS bank and

other Govt. and private sector banks, all are lined up to provide an education

loan to the deserving aspirant. The innovative products offered by these bankshave simple terms and provide the much needed financial assistance in a very

short period of time.

With all these banks competing to provide an educational loan for your choice

of course, what all things should you keep in mind while applying for an

educational loan from banks in India? Here are the 6 most important factors that

you should compare before taking any education loan from banks.

1. Interest rates

The first and the foremost is the interest rates charged on the education loan.

This interest rate is the primary factor that earns money for banks and so they

want it to be higher, but the competition in the loan market makes the bank keep


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it to a level where the education loan seems affordable to the customer, while it

earns money for the banks too. Whether the interest rate charged on your

education loan is fixed or floating is also a matter of concern. Generally, the

value of fixed interest rates is higher than the floating interest rates. Going for

floating interest rates in this low interest regime is always a better option.

The interest rates also depend on the amount of education loan one wants,

keeping in mind all the realistic requirements, a judicious comparison of various

offers from leading banks will certainly help the student find an education loan

that pinches the least.

2. How the interest is charged?

Though the banks defer repayments, but they start charging the interest

immediately after the disbursal of the loan. How this interest is charged will

determine the amount of interest you will pay. Enquire carefully whether it is

charged on a daily reducing balance, or on a quarterly reducing balance. The

interest rates charged on loans thus keep accumulating until you start the

repayments. This can significantly increase the repayment burden. If the bank

providing education loan gives an option to pay the interest portion of your

education loan immediately, use it by all means.

3. The waiver period

The third most important thing to watch out is the waiver period. Banks

providing education loans generally don't expect the student to pay until he


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gains employment after completion of the course. Check this out carefully, does

your education loan provider gives you such an option? The whole idea is to get

comfortable financially before the bank asks you for a repayment.

4. Fees and other costs

The fees associated with the education loan such as processing fees,

administrative fees, documentation costs etc. should be minimal.

5. Collateral, guarantee or security

There is a collateral clause with all the educational loans from banks in India

provided the education loan exceeds a value of 4 lacs. This figure can vary from

bank to bank but it is generally a norm. Make sure to ask the bank about

collateral requirements and have it ready before the disbursal of loan.

6. The down payment

A down payment also has to be made with every education loan, ranging

between 5%-20% of the loan amount depending on banks this money has to be

paid upfront.


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Increase education loan lending: Nair

Committee recommendations

Banks are concerned as non-performing assets in education loans are ashigh as 6%. Meanwhile, SBI, largest public sector lender, announced aninterest rates cut on education loans up to 1%The committee constitutedby the Reserve Bank of India (RBI) to re-examine the existing classification and

suggest revised guidelines for the lending to the priority sector, has recommended an increase in lending limit for

education loan by Rs5 lakh.

The committee headed by MV Nair, chairman, Union Bank of India, in a report suggested to that limit underpriority sector for loans for studies in India may be increased to Rs15 lakh and Rs25 lakh in case of studies

abroad, from existing limit of Rs10 lakh and Rs20 lakh, respectively.

The RBI has sought comments on the report of the Committee.

Redefining the scope of education loans by removing the limits and fixing it on the basis of parents income,

covering vocational and skill development under its ambit and establishing a credit fund to cover the risk of

defaults were some of the suggestions received by the committee.

There is no suggestion on the lending up to Rs4 lakh, given without any security or collateral. Experts say that

this category also has highest number of repayment defaults.

Non-performing assets (NPAs) in education loans are as high as 6%. To bring down NPAs in education loans, the

government is considering the option of setting up a credit guarantee trust.

Last year, the Indian Banks Association (IBA), which has formulated the model education loan policy, had

recommended of creating a credit guarantee fund to tackle the problem of rising defaults in the loan category ofup to Rs4 lakh. The committee has said that it is under consideration.

Recently, IBA asked lenders to impose stricter terms on loans given to students getting admission under the

management quota. Any loan considered by banks for students getting admission under the management quota

would be outside the model scheme. Banks may fix appropriate terms and conditions for such loans, IBA said in

a guidance note.

Experts, say that there is need to address the issue of lending to students under management quota as it might

impact large number of students opting admission through this route.

According to Prashant Bhonsale, country head of Credila Financial Services, a private lender specializing in

education loans, Though the move is in the right direction considering the risk factors from the point of view of

the lender, there is a need for risk-management framework for lending to these average students.

An official of Mumbai-based public sector bank, which has seen 16%-17% growth in the education loan portfolio,

confirmed that, It is left to each bank to decide on the lending to students under the management quota. It wontcome under the IBA policy. We are looking into it. I cannot commit anything right now.

According to the current guidelines, banks lend up to Rs4 lakh without any security. But for loans between Rs4

lakh and Rs7.5 lakh, they can ask for personal guarantees, and for a loan above Rs7.5 lakh, a collateral is required.

After the apex bank eased its monetary policy, State Bank of India, largest public sector lender, announced an

interest rates cut on education loans up to 1%.


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SBI BANK

A term loan granted to Indian Nationals for pursuing higher education in India or abroad where

admission has been secured.

Eligible Courses

a. Studies in India:

Graduation, Post-graduation including regular technical and professional Degree/Diploma

courses conducted by colleges/universities approved by UGC/ AICTE/IMC/Govt. etc

Regular Degree/ Diploma Courses conducted by autonomous institutions like IIT, IIM etc

Teachertraining/ Nursing courses approved by Central government or the State Government

Regular Degree/Diploma Courses like Aeronautical, pilot training, shipping etc. approved by

Director General of Civil Aviation/Shipping

Vocational Training andSkill Development Study Courses will not be covered under the regular

Education Loan Schemes. A separate scheme for Loans for Vocational Education and Training has

been launched which covers financing for such Vocational courses

b. Studies abroad:

Job oriented professional/ technical Graduation Degree courses/ Post Graduation Degree and

Diploma courses like MCA, MBA, MS, etc offered by reputed universities

Expenses considered for loan

Fees payable to college/school/hostel

Examination/Library/Laboratory fees


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Purchase of Books/Equipment/Instruments/Uniforms, Purchase of computers- essential for

completion of the course (maximum 20% of the total tuition fees payable for completion of the

course)

Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tuition fees for the

entire course)

Travel Expenses/Passage money for studies abroad

Cost of a Two-wheeler upto Rs. 50,000/-

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

Amount of Loan

For studies in India, maximum Rs. 10 lacs

Studies abroad, maximum Rs. 30 lacs

term loan granted to Indian Nationals for pursuing higher education in India or abroad where

admission has been secured.

Eligible Courses

a. Studies in India:

Graduation, Post-graduation including regular technical and professional Degree/Diploma

courses conducted by colleges/universities approved by UGC/ AICTE/IMC/Govt. etc

Regular Degree/ Diploma Courses conducted by autonomous institutions like IIT, IIM etc

Teacher training/ Nursing courses approved by Central government or the State Government

Regular Degree/Diploma Courses like Aeronautical, pilot training, shipping etc. approved by

Director General of Civil Aviation/Shipping

Vocational Training and Skill Development Study Courses will not be covered under the regular

Education Loan Schemes. A separate scheme for Loans for Vocational Education and Training has

been launched which covers financing for such Vocational courses

b. Studies abroad:


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Repayment will commence one year after completion of course or 6 months after securing a job,

whichever is earlier.

Maximum Loan Limit Repayment Period

Upto Rs. 4 Lacs 5-7 years

Above Rs. 4 Lacs and upto Rs. 7.5 Lacs 5-7 years

Above Rs. 7.5 Lacs Upto 12 years

Security

Particular Security

Upto Rs. 4 lacs loan amount Only Parent/ Guardian as co-borrower

Above Rs. 4 lacs to Rs. 7.50 lacs loan amount Parent/ Guardian as co-borrower and Collateral

security in the form of suitable third party guarantee*.

*Third Party Guarantee can be replaced with Parent/Guardian as co-borrower provided the Gross

Annual Income of Parent/Guardian (co-borrower) as given in latest Income Tax Return is 3 times of

the loan amount.

Above Rs. 7.50 lacs loan amount Parent/ Guardian as co-borrower and tangible collateral

security

In case of married person, co-obligator can be either spouse or the parent(s)/ parents-in-law

Margin

For loans up to Rs.4.0 lacs : No Margin

For loans above Rs.4.0 lacs:

o Studies in India: 5%


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o Studies Abroad: 15%

Documentation Required

Completed Education Loan Application Form.

Mark sheets of last qualifying examination

Proof of admission scholarship, studentship etc

Schedule of expenses for the specified course

2 passport size photographs

PAN Card of the student and the Parent/ Guardian

Borrower's Bank account statement for the last six months

Income tax Returns/ IT assessment order, of last 2 yrs (If IT Payee)

Brief statement of assets and liabilities, of the Co-borrower

Proof of Income (i.e. Salary slips/ Form 16 etc. if applicable)

Purpose

To extend financial assistance to all eligible / deserving / meritorious students for pursuing higher

education in India & Abroad.

Eligibility

Student Should be an Indian National.

Secured admission to professional/ technical courses through Entrance Test / Selection

process.

Secured admission to foreign University / Institution.

Amount of finance Need based finance subject to repaying capacity of the parents / students

Studies in India - Maximum Rs.10.00 lacs

Studies abroad - Maximum Rs.20.00 lacs


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Margin money: Upto Rs.4.00 Lacs - NIL

Above Rs. 4.00 Lacs

Studies in India: - 5% AND Studies Abroad - 15%

Scholarship /assistantship to be included in margin.

Margin may be brought in on year to year basis as and when disbursements are made on a pro-rata

basis.

Security Norms Upto Rs. 4.00 Lacs - No Security (Co-obligation of parent / guardian is compulsory).

Above Rs.4.00 Lacs and upto Rs.7.50 Lacs: Collateral in the form of a suitable third party guarantee.

Above Rs.7.50 Lacs: - Collateral security of suitable value or Co-obligation of parents / Guardians /

third party guarantee along with the assignment of future income of the student for payment of

installments.

Penal rate of Interest: @2% on all irregular Education loans above Rs.4.00 Lacs for the over due

amount and over due period.

Repayment Period :Course period + one year or six months after getting job, whichever is earlier.

5 to 7 years after commencement of repayment.

Processing Charges: No processing charges for studies abroad upto Rs.4.00 Lacs and in case of

studies in India irrespective of loan amount.

In case of loans above Rs.4.00 Lacs for studies abroad.

1. Rs. 5000/- to be collected at the time of delivering sanction letter to the student / guardian.

2. Rs.1000/- to be appropriated towards processing fees.

3. Rs.4000/- to be adjusted towards student's margin at the time of release of the loan.

4. In case the loan is not availed for any reason by the student, the amount of Rs.4000/- to be

refunded to the student without interest.

No processing charges to be levied on the loans to the wards of Bank's staff members including

Retired Staff.


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AXIS BANK

Axis Bank's Education Loan aims to provide the much needed financial support to deserving

students for pursuing higher professional or technical education in India and abroad. The

education loan would be provided to those students who have obtained admission to career-

oriented courses e.g. medicine, engineering, management etc., either at the graduate or post-

graduate level.

We believe, given the right tools and aid every child has the potential to be successful. Our

education loans aim to be the very tool that will enable them to reach their goals in life. Nomore would a deserving student have to give away their pursuit of dreams due to lack of

money. Our student loans will ensure that worthy students are empowered to take their

destiny in to their own hands. Our endeavour is to help the future of our nation in education

and prosperity.

Quantum of Loan

The quantum of finance under the scheme is capped at Rs 10.00 lacs for studies in India and

Rs 20.00 lacs for studies abroad, which would cover tuition fees, hostel charges (if any), cost

of books, etc. The minimum amount of education loan would be Rs 50,000.

Margin

No margin for education loans upto Rs 4 lacs. For loans above Rs 4 lacs, 5% margin for

studies within India and 15% for higher studies overseas.

Tax benefits:

If you have taken an education loan in order to support higher education for yourself,spouse, or children, then you should be aware of the tax benefits that you are entitled to.Following are the points that will help in knowing the tax benefits available on education

loan. Tax benefits help reduce the cost of education and also lessen the pressure on savingsthat occur due to EMI payments.

Deduction u/s 80 E

Section 80 E provides deduction with respect to interestpaid towards repayment of the education loan. There isno cap on the maximum amount that can be claimed astax benefit u/s 80 E. This section is particularly beneficial

for those who are in the higher tax bracket.


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Since the deduction is available for the full interest cost; for those in the highest tax bracket i.e. in the 30% tax bracket, the effective cost will reduce by 30%.

Applicable Conditions

1. Deduction is allowable only to the individual assesse and not HUF2. There is no maximum cap on the interest amount that can be claimed for the deduction. However there is no tax benefit available on the

repayment of principal.3. Deduction is available if the interest has been paid for the same year i.e. previous year4. Interest on loan taken from relatives and friends will not be eligible for deduction u/s 80 E5. Loan should have been taken for pursuing higher education either for self, spouse, children or for those for whom the assesse is a legal

guardian6. Loan amount is not restricted to tuition fees and college fees but can also include other expenses like transportation, hostel charges etc.7. Education can be pursued anywhere in the world and not is restricted to India

Loan Structure

Maximum amount of loan available for education in India is Rs. 10 Lacs and Rs. 20 Lacs for education abroad.

For loan upto Rs. 4 Lacs no margin money is required, however for loan above Rs. 4 Lacs, 5% margin money shall be applicable in case of education inIndia and 15% for education abroad. Margin money represents the partial allocation from the borrowers si de with respect to the tranche due. For example forfee due of Rs. 1 Lac if the margin money is 5% then the borrower/his family will be required to pay Rs. 5,000 and remainder 95% will be borne by thebank/lender.

Different banks/lenders have various clauses and conditions when it comes to providing security towards the loan borrowed. However following is a typicalexample.

Loan repayment starts after 6 months of getting a job or one year of completion of education which ever is earlier.

Simple interest is levied during the education and moratorium period. post which compounding interest is levied on the outstanding loan amount.

Documents Required

Loan application on Bank's format Passport size photograph Proof of Address

Proof of Age Proof of having cleared last qualifying examination Letter of admission in professional, technical or vocational courses


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Prospectus of the course wherein charges like Admission Fee, Examination Fee, Hostel Charges etc. are mentioned Details of Assets & Liabilities of parents/co-obligants/guarantors

In case loan is to be collaterally secured by mortgage of IP, Copy of Title Deed, Valuation Certificate and Non Encumbrance Certificate fromapproved Lawyer of the Bank to be obtained at the cost of the borrower Photocopy of Passport & Visa, in case of study abroad Copy of PAN of student Borrower (If PAN is not available at the time of sanction, the same be obtained within one year of disbursement of loan).

Axis Bank's Study Power aims to provide financial support to deserving

students for pursuing higher professional or technical education in India or

abroad. The loan would be provided to students who have obtained admission

to career-oriented courses eg, medicine, engineering, management etc., eitherat the graduate or post-graduate level.

Loan Feature

Loan Amount

Rs 10 lacs for studies in India and Rs 20 lacs for studies abroad, which would

cover tuition fees, hostel charges (if any), cost of books, etc. The minimum

amount of loan would be Rs 50,000.

Interest Rate

16% to 17% (0.5% relaxation for girl child)

Tenure Information not available

Pre Payment Charges No Prepayment charges to be levied on theoutstanding loan amount.

Service Charges Nil

Eligibility Criteria : Education Loan

________________________________________

Salaried Self

Age No Age Criteria Provided No Age Criteria Provided


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Income Income Criteria Not Available Income Criteria Not Available

Job Experience Information not available Information not available

Residence Proof Information Not Available Information Not Available

Docs Required : Education Loan

________________________________________

Salaried Self

ID Proof Passport/Voters ID card/Driving Licence/Copy of PAN Card/Govt

ID Card Passport/Voters ID card/Driving Licence/Copy of PAN Card

Address Proof Ration Card/Passport/Latest Electricity bill/ Latest

telephone bill/Latest credit card bill bank statements/Last 6 months bank

statements/Existing House Lease agreement Ration Card/Passport/Latest

Electricity bill/ Latest telephone bill/Latest credit card bill bank statements/Last

6 months bank statements/Existing House Lease agreement

DOB Proof Information not available Information Not Available

Financial Docs Salaried Individual:

Bank Statements or passbook for last 6 months where salary is credited.

Latest salary slip showing all deductions or Form 16 along with recent

salary certificate

Copy of admission letter of the Institute along with Fees schedule, mark

sheets/pass certificates of S.S.C, H.S.C , Degree courses

Photographs of both the co applicant and the student Self Employed:

Bank Statement or passbook for last 6 months

ITR/valid Income documents certified by CA.

Copy of admission letter of the Institute along with Fees schedule, mark

sheets/pass certificates of S.S.C, H.S.C , Degree courses


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Photographs of both the co applicant and the student.

LIMITATIONS:

There are some limitations in this research; these limitations are as follows

Time limitation

Many banks provide education loan but in this research only three banks

aretaken for consideration.

Expenditure on research

Some banks are not provided their internal circular / information.


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Name of Bank Axis Bank

Eligibility

Axis Bank's Study Power aims to provide financial

support

to deserving students for pursuing higher

professional or

technical education in India and abroad.

The loan would be provided to students who have

obtained admission to career-oriented courses eg,

medicine, engineering, management etc., either at

the

graduate or post-graduate level.

Loan Amount & Rate of Interest

Studying in India - Max Rs. 10 Lacs

Studying Abroad - Max Rs. 20 Lacs

The current Prime Lending Rate (PLR) with effect

from Jul 13,

2009 is 14.00% p.a

Tenure of Loan

The loan to be repaid in 5-7 years

Courses Covered

Graduation courses : BA, B.Com., B.Sc., etc

Post Graduation courses : Masters & Phd

Professional courses : Engineering, Medical,

Agriculture,

Veterinary, Law, Dental, Management, Computer etc

Expenses covered

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

Travel expenses/ passage money for studies

abroad

Documents Required

India:

Identity Proof: Copy of Passport / Driving Licence /Voters

Name of Bank State Bank of India

Eligibility

Should be an India National Secured admission to professional/ technical

courses through

Entrance Test/ Selection process

Secured admission to foreign university/

Institution

Loan Amount & Rate of

Interest



Loan Amount Rate of Interest

Loans up to Rs. 4.00 Lacs 0.50% below SBAR i.e.11.25% p.a.

Loans above Rs. 4.00 Lacs and

1.00% above SBAR i.e. 12.75% p.a.

Up to Rs. 7.50 Lacs

Loans above Rs. 7.50 Lacs At SBAR i.e. 11.75% p.a.

Tenure of Loan The loan to be repaid in 5-7 years

Courses Covered

All courses having employment prospects are

eligible.

Graduation courses/ Post graduation courses/Professional courses

Other courses approved by

UGC/Government/AICTE etc.

Expenses covered



Purchase of

Books/Equipment/Instruments/Uniforms

Caution Deposit/Building Fund/Refundable Deposit

(maximum 10%

tuition fees for the entire course) Travel Expenses/Passage money for studies abroad

Purchase of computers considered necessary for

completion of

course

Cost of a Two-wheeler up to Rs. 50,000/-

Any other expenses required to complete the course

like study tours,

project work etc.

Documents Required


Mark sheets of last qualifying examination Proof of admission scholarship, studentship etc


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Identity Card / Income Tax Pan Card.

Residence Proof : Copy of Passport / Driving

Licence /Voters Identity Card / Utility Bills

Age Proof: Copy of Passport / Driving Licence /

Income Tax

Pan Card / Birth Certificate.

Signature Verification.

One Singed Photograph (On the face).

Abroad:

Offer / Admission / Bonafide student letter from

the

university / college in India or Abroad.

Cost of the Course (including living). Copy of last examination passed result.

Copy of Passport in case of study abroad.

Security

Third party guarantee and/or collateral security

may be

asked for in appropriate cases

Assignment of LIC policy in favour of the Bank for

the sumassured being at least 100% of the loan amount. The

policy is kept alive during the currency of the loan

To ensure this, the annual premium may be

included in

the computation of the loan requirement, along with

the

tuition fees and other recurring charges

Further, the future income of the student needs to

be

assigned in favour of the Bank for meeting the

instalmentobligations

Area of Operation

Pan India Presence

Address

Axis Bank Limited,

131, Maker Tower - F,

Cuffe Parade,

Colaba, Mumbai - 400005

Phone



Borrower's Bank account statement for the last sixmonths

Income tax assessment order, of last 2 years

Brief statement of assets and liabilities, of the Co-

borrower

Proof of Income (i.e. Salary slips/ Form 16 etc)

Name of Bank State Bank of India

Eligibility

Should be an India National

Secured admission to professional/ technical

courses throughEntrance Test/ Selection process

Secured admission to foreign university/

Institution

Loan Amount & Rate of

Interest



Loan Amount Rate of Interest

Loans up to Rs. 4.00 Lacs 0.50% below SBAR i.e.

11.25% p.a.

Loans above Rs. 4.00 Lacs and1.00% above SBAR i.e. 12.75% p.a.

Up to Rs. 7.50 Lacs

Loans above Rs. 7.50 Lacs At SBAR i.e. 11.75% p.a.

Tenure of Loan The loan to be repaid in 5-7 years

Courses Covered

All courses having employment prospects are

eligible.

Graduation courses/ Post graduation courses/

Professional courses

Other courses approved byUGC/Government/AICTE etc.

Expenses covered



Purchase of

Books/Equipment/Instruments/Uniforms

Caution Deposit/Building Fund/Refundable Deposit

(maximum 10%

tuition fees for the entire course)

Travel Expenses/Passage money for studies abroad

Purchase of computers considered necessary forcompletion of


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022-67074407

Website

www.axisbank.com

course

Cost of a Two-wheeler up to Rs. 50,000/-

Any other expenses required to complete the courselike study tours,

project work etc.

Documents Required


Mark sheets of last qualifying examination

Proof of admission scholarship, studentship etc



Borrower's Bank account statement for the last six

months

Income tax assessment order, of last 2 years Brief statement of assets and liabilities, of the Co-

borrower

Proof of Income (i.e. Salary slips/ Form 16 etc)

Amount Security

Up to Rs. 4 lacs No Security

Above Rs. 4 lacs

Collateral security in the form of suitable third party

guarantee. The bank may, at its discretion, inexceptional cases, weive third party guarantee if

satisfied with the net-worth/means of parent/s who

would be executing the documents as "joint

borrower".

Above Rs. 7.50 lacs

Tangible collateral security of suitable value, along

with

the assignment of future income of the student for

payment of installments.

All loans should be secured by parent(s)/guardian of

the student borrower.

Mode of repayment

Repayment will commence one year after

completion of course or 6 months after

securing a job, whichever is earlier.

Area of Operation

Pan India PresenceAddress


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State Bank of India,

Local Head Office, Bhadra, Ahmedabad-380 001

Phone079-25510883

079-25506648

Email helpline.

[email protected]

Website

www.statebankofindia.com


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NEWS

The rate on educational loans ranges from 11.5% to 14.25%, depending on the course, duration and

university , which for a Rs 30-lakh loan would translate into an EMI of Rs 50,000 per month.

And with countries like UK imposing restrictions on work visa after studies as well as a bond of 3,000

pounds for a visa to crack down on illegal immigration, students will have no choice but to head back

to India after completing their course.

This, coupled with the tepid job market in India, could compound the miseries of the borrower.

"Assuming a take-home of Rs 70,000 per month on a Rs 10-lakh offer and with an EMI of Rs 50,000,

it would be really tough to meet other living expenses like rent, transportation , etc," Sanjoy Sircar,

professor of finance, Great Lakes Institute of Management , said. "Either the student would have to

take a topup loan or cough up from his or her own resources," Kartik Jhaveri, director, Transcend

Consulting, said.

But there is some silver lining too. Students who have taken a loan earlier for a masters programmeand have completed their course and got a job in the US would now have to remit fewer dollars in

EMIs towards the rupee loan taken back home.

Education loans a problem at sub-6% growth, SBI chief says

MUMBAI: Pratip Chaudhuri's tenure as SBI chairman has been one of extremes. The bank recorded

its highest ever profit of Rs 14,105 crore, but this was marred by a surge in bad loans. The sell-off in

bank stocks resulted in SBI losing its position as the most valuable bank but Chaudhuri reaffirmed its

fundamentally strong image by bolstering Tier-I capital adequacy to well over 9% and providing for

pension liabilities. Excerpts from an interview with TOI:

SBI has tightened income criteria for car loans. Will you do this for all retail loans?

We have done this for auto loans as we feel that those with higher income are less likely to default.Home loans are different because it is against property and it also enhances the borrower's income


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through rentals or savings in rent. Education loans will become a problem if, going forward, the

economy does not grow at 6% as enough jobs won't be created and also employment would come at

lower salaries. That is why we have extended the tenure of our education loan from five to twelve

years. We hope the government brings in the guarantee scheme for education loans.

Falling rupee raises restrictions for loans to study abroad

We all are aware of the falling rupee. This year, while the rupee has depreciated around 20%,

students who dream of studying abroad are left with fear and disappointment. Moreover, there is a

raise in restrictions for obtaining the educational loans to study abroad. Some students are seeking

extra bank loans. However, a Rs. 2 million (US $ 36,500) ceiling on loans for overseas education is

making this difficult. According to source, the loan limit had not changed since 2001 when the

exchange rate was Rs25 to Rs30 to the US dollar, as compared to around Rs50 now. In 2001, a

maximum loan could cover an Indian student's full education costs in most countries. Now, which is

barely enough for one year. Ankur Sarthi, a final year undergraduate student at Delhi university said,

"I have already secured a Rs2 million loan from a national bank and I was denied any additional

amount." It is common for students to apply for a student loan several months in advance for taking

up a place overseas. Sarthi secured a loan two months ago. "I had applied to universities across

multiple countries. Now I have to pick the cheapest country and also one that gives me

opportunities to earn while I study," Sarthi said. A senior official at a public sector bank asked, "You

have to look at the return on an expensive higher education abroad. If a student spends Rs. 2 millionto Rs. 3 million on education in a world-class Institution but struggles to get a well paying job, is the

education worth it?" The source also highlights India's slowing economic growth and a cloudy jobs

outlook in the last four years has raised fear of risky loans, while the number of students seeking

loans has gone up significantly. As of March 2013, there were 2,509,465 Education loan accounts

with a total amount outstanding of Rs5.352 billion. Over 5% of outstanding student loans had turned

bad, up from 2% in 2008. According to few reports, banks are contemplating and extending the

repayment period of loans taken to pursue higher Studies abroad, to spread interest payments over

a longer period and reduce the cost.

RBI looking into the issue of SBI shaming students

C HENNAI: The Reserve Bank of India (RBI) is looking into the complaint against State Bank of India

(SBI) for shaming students and their parents for defaulting on their education loan. "RBI's assistant

general manager Sharmila Sampath Kumar has sent me an email on August 28 stating that the issue

is receiving the attention of the central bank," K Srinivasan, convenor, education loan task force

(ELTF), said here Wednesday. ELTF guides students on rules and regulations governing the education

loans offered by nationalised banks. It also insists that students repay their dues. The Bodinayakanur

branch of SBI in Theni district, 515km from here, displayed photos of students and their parents for


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defaulting on their educational loans. Several political parties like DMK, CPI, VCK and others had

condemned the SBI's action. DMK president M Karunanidhi had said, "When several money sharks

are cheating banks of thousands of crores of rupees by not repaying loans, it is defamatory to display

photos of students from poor and middle-class families for defaulting on education loans." The CPI

had said, "Indian industrialists get about Rs 5 trillion in annual tax concessions. Big industrial groups

do not repay loans and these are written off as bad debts. Not worrying about these, the central

government and the SBI are shaming students who had availed education loan. It is highly

condemnable." Srinivasan in his complaint to RBI said SBI's total advances as on March 2012 were Rs

7.58 lakh crore and its non-performing assets were Rs 37,156 crore - around five per cent of its total

loan portfolio. He said SBI's total education loan as on March 2012 was only Rs 11,500 crore spread

over 560,000 accounts. The non-performing assets (NPA) under education loan portfolio would be

around Rs 400 crore or two/three per cent as against the total NPA of Rs 37,156 crore. Given this

situation, why should SBI single out the poor Education loan defaulters and shame them by

displaying their photographs, Srinivasan said in his complain.

Student loans: Interest rates set to doubleMondayStudent loans: Interest rates on new subsidized Stafford loans are set to go from 3.4 percent to 6.8 percent onMonday. Some are calling for an extension of the current student loan interest rates for another year.

By Philip Elliott,Associated Press/ June 29, 2013

Student loan rates will double Monday at least for a while after a compromise to keep student loan

interest rates low proved unwinnable before the July 1 deadline, senators said Thursday.
http://www.csmonitor.com/var/ezflow_site/storage/images/media/content/2013/6-29-13-student-loans/16231871-1-eng-US/6-29-13-Student-loans_full_600.jpg


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Mumbai, Sept 21: challenges

The Finance Ministry has asked public sector banks to put in place a three-tier grievanceredressal mechanism to sort out problems being faced by students in obtaining education

loans.

Banks have also been asked to make education loan applicants aware of the mechanism at

the branch, zonal office and head-office levelsat the time of submission of loan

application.

Besides, the ministry wants banks to introduce a system of review by the next higher

authority where application for education loan is rejected.

These directives come in the wake of the Finance Ministers observation that students

wanting to get education loans were facing a number of problems.


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some banks might also requir