Education Loan is a great relief for students and parents who are wanting to pursue their higher studies but hesitating due to the financial constraints. Few common queries related to Education Loan are addressed here:
40 Lakhs in India
Education Loan is available for the students who wish to study in any part of India. The student has to register in the Jansamardh portal and while registering they will get an option to select 3 nearest banks.
The student can get upto 40 Lakh rupees to study in India. Those with an annual income less than 4.5 Lakhs will get government subsidy when they take up a loan upto 7.5 Lakhs. It does not require collateral.
The student should get a merit seat for a recognized course in a recognized college/institute. If the student has taken up a management seat then the entrance exam score will be considered. Students can take one more loan while maintaining another loan, i.e, the student who has taken a loan for a degree is eligible to take a loan again for PG.
1.5 Crore to study Abroad
Students are now eligible for 1.5 crore to study in foreign universities where no collateral is required for loans upto 7.5 Lakhs. But the CIBIL scores of the parents will be checked. The CIBIL score is a three digit number that indicates your credit worthiness and is also termed as the credit information reports.
By checking this score, the bank will understand whether the applicant is a regular loan repayment person or not. If there’s a problem with a CIBIL score then a third party will be appointed as a guarantor. The Guarantor must possess some sort of an asset.
For applicants who require more than 7.5 Lakh, a property such as a house or land must be provided as a security except agricultural land equivalent to the required amount. These schemes will vary from bank to bank.
Documents such as the Course opting to study, University, Scholarship received from there and fees per semester should be provided to the bank.
Interest and Processing fees
Interest rates vary from Bank to Bank. The interest rate in SBI is 9.55% for loans upto 7.5 Lakh and 0.5% interest discount will be available if the insurance provided by the bank is taken. Also for girls there will be a 0.5% discount. Some banks will require a guarantor for loans above Rs.4 Lakh. There is a processing fee for students opting to study abroad. Few banks will consider the repayment capacity of the Parents before sanctioning the loan.
Required Documents
The following documents are required for processing the loan:
- Proof of Admission
- College and Course approval documents
- KYC ID Proofs of Student and Parents are all required; Aadhar Card and Pan Card are mandatory.
- Educational Marksheets of 10, 12, Etc
- Student Photo
When to be paid back?
Repayment must commence 12 months after completing the course or 6 months after the student gets a job whichever happens first. Those who didn’t get a job will get a moratorium one year after the course completion.
After that repayment should start and loans with interest must be repaid in instalments which can be extended to 15 years.
Other Loans
Students pursuing in IITs, IIMs, NITs can get loans on campus itself which is known as Scholar loan. The student can get upto 40 Lakh rupees without collateral and processing fee. On completion of the course, the loan will be transferred to the branch of the student’s choice (Workplace or Home Branch). These Schemes are available in all banks.
How much will the student get?
The full amount requested by the students may not be received. The loan will be sanctioned only in proportion to the fee approved by the Government. Banks will inform the Parents to put up 15% margin for student’s planning to study abroad.
Admission Time
Sometimes the students get the admission from the College/ Institute but the loan from the bank is getting delayed. In those cases the parents can pay the fees by themselves and approach the bank within 6 months of securing the admission the amount will be refunded by the bank. Even after 6 months, if the Bank Manager issues a convincing letter the amount will be paid.
Account Required
An account with the bank is mandatory for anyone to avail the loan. Bank will not process the Education Loan in Cash.
Study materials included?
If there are things like laptops in the list provided by the college, the bank will also sanction the money to buy it or at the time of applying for the loan. It is sufficient to give a letter that the student requires a phone or laptop for study purposes.
Complaints?
There are lots of things that will be checked by the Banks before granting the loan in regards to employment opportunities after graduation, placements will be available, how much salary? What is the mark of the student in each semester?
Public Sector banks will pay the next instalment only if the student has performed at least 60% in the semester. It again varies from bank to bank. Normal interest will be calculated for one year moratorium period after course completion and 15 years applicable for loan repayment where compound interest will be there. Most of the banks give interest concession if the interest is paid back during the moratorium period.
Block level Bankers committees are used to resolve complaints about the Education loans. Above that there is a district level review committee chaired by the Collector and attended by all the people’s representatives. RBI officials attend the meetings where they will be asked on: How much Education Loan received? How many are rejected, the reason will be assessed. So the eligible students cannot be denied loans.
The students can get more educational news and updates by contacting us on +91 9916505050/+91 8088602346. They can also email us at enquiry@galaxyeduworld.com or can also reach us as galaxyeduworld@gmail.com for more details.