ABSTRACT

Education assumes significance as a provider of input for economic,

political and social development, besides as a source of knowledge.
Economic growth in recent years has been based on availability and
quality of knowledge in any country, which in turn depends on access
and affordability to education. Hence, importance of education has
increased to supply adequate and qualitative human capital.
Functioning of education sector depends on availability of various
resources, of which to a large extent on financial resources. Finances
for education are mobilized from different sources like government
spending, fees, educational loans, and others. Among these,
educational loan has been seen as an alternative way of financing for
education. In this background the present paper tries to analyze the
trends and patterns of educational loan for oversea education in India.
Further, an attempt has been made to understand pattern of student
loans provided by selected commercial banks. The study finds that
educational loan is increasing over the years.

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Chapter-1
INTRODUCTION

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1.1 INTRODUCTION
Studying in a top university and that too in a foreign country is every
student’s dream. If given a chance, students would definitely pursue
their higher education in their dream university abroad and will pass
with flying colors. But funding study abroad may cost an arm and a leg
for the student. Students may have to do some penny-pinching or else
take the support of scholarships to support their study. But what if you
are unable to save money? Who will foot the bill for your education
abroad? If you are dwelling on this, an education loan is the “ bread and
butter”.
Education loans act as a savior for students who are willing to chase
their dream of studying abroad but do not have sufficient funds to do
so. Financial lenders in India provide education loans for studies in India
as well as overseas. Since the number of people studying abroad has
been steadily increasing, the number of banks providing education
loans for abroad studies has also been increasing. 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 with your monetary assisting as
a whole. It does not matter whether you opt to study at university level,
at a college or at a private school, education overall has become
expensive and beyond the reach of many. 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.

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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 millions of dreams every year.
1.2.PLAN OF STUDY:
This research project aimed to study about the education loan on
oversea education.To get admission to the Abroad Universities & to get
visa, "Availability of Liquid Funds" to complete the course needs to be
demonstrated. "Education Loan Sanction Letter" before admission can
help you show the availability of liquid funds. For that we have
selected “ South Indian Bank “as a reference to study more about the
educational loan on oversea education .
STUDY IN ABROAD
Students face many challenges while securing education loans. Some
of the issues faced by students include:
 For students going to the USA, UK, Canada, Australia, etc. there
are number of activities and formalities which take away the time.
Running around from one branch to the other and doing multiple
rounds for education loans get very difficult
 Visa interview deadlines keep approaching fast and the
education loan approval letter is required well in time to set up
the visa interview. Hence, there is a tremendous time pressure to
get education loan in time

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  Flexibility in terms of loans which need to be customized to the
requirements of the students and their respective courses
 Ability to find the required margin money (portion of the fees
that is to be paid by students/parents which is not covered by the
loan)
 Required loan amount is more than the value of the collateral
security
 Ability to prove that the University, College and the applied
Course is appropriate. (This can be quite challenging if the
decision maker is not aware of the thousands of valid and
accredited educational choices available in today's fast changing
world of education)
 Ability to repay the loan from Abroad
 Ability to get web-based access to the loan account with web
enabled transaction processing inclusive of electronic payments,
etc.

1.3. OBJECTIVES
1. Funding pattern of educational loan at “South Indian Bank”
2. statistical data of past 5 years.

1.4. METHODOLOGY:
a. ACTUAL COLLECTION OF DATA
The source used for the collection of data is the primary source and
secondary data (articles, newspaper etc.)

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b. SOFTWARE USED FOR DATA ANALYSIS
Software like Microsoft Office (EXCEL) was used to draw graphs, tables
which were used to show the analysis of the data collected

1.5 LIMITATIONS OF THE STUDY

Not eligible for distance education, part time course o open
universities, for tution fees, bank finance will be available for tution
fees,
hotel mess, and living expenses including computer but not for
donation, building funds upto 4 lakhs no margin and no security .

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Chapter-2
REVIEW OF
LITERATURE

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Chapter-3
THEORETICAL
FRAMEWORK

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ABOUT SOUTH INDIAN BANK
South Indian Bank is a private sector bank in india. It has headquarter in
Thrissur. South Indian Bank was founded on 1929. It has 978 branches
and It provides all the financial services to its customers like saving
deposit, fixed deposit, recurring deposit, home loans, personal loan, car
loan, education loan, gold loan, PPF account, lockers, netbanking,
mobile banking, RTGS, NEFT, IMPS, E-Wallet, Atal Pension Yojana,
Pradhan Mantri Jandhan Yojana, Pradhan Mantri Suraksha Bima Yojana,
Pradhan Mantri Jeevan Jyoti Bima Yojana and many more.

HISTORY OF STUDENT LOANS IN INDIA

Education is the essence of life. To ensure that no deserving
student is denied education for want of funds, the government
is promoting education loans in a big way. The basic aim or idea
behind education loan is to bring education within the reach of
students and help them improve their prospects in life. Any
student who has secured admission in an institute of repute,
whose degree/diploma is recognized by University/Institute
affiliated to any Central/State Statutory Body or recognized by
AICTE (All India Council of Technical Education) and other
institutes of repute, is eligible for educational loan.
Education loans cover cost of the school/college fee, hostel
expenses, and cost of books and stationery. Apart from this,
any other expense required to complete the course can also be
considered. The maximum amount of education loan is up to
Rs. 7.50 lakh in case of studies in India and Rs 15 lakhs for
studying abroad. The sum of money offered is against a third-
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party guarantee. The third-party guarantee can come from an
uncle, neighbor or friend standing guarantee for the full
amount of the loan.
On an average, an education loan has to be repaid over a
period of 5 to 7 years, with the provision of a grace period of
one year after completion of studies. The loan money has to be
repaid within 84 months in equated monthly installments
(EMIs), commencing 12 months after course completion or 6
months after getting the job, whichever is earlier. In case of
overseas study loan of 7 lakhs or above, the sum of money is
usually given against fixed deposits, NSC certificates and
property worth the loan amount

SOUTH INDIAN BANK EDUCATION LOAN PURPOSE

To provide financial assistance to the deserving / meritorious students

in getting their education completed specially for higher education. The
scheme aims to ensure that the deserving students may not loose
opportunities for want of arrangements of funds.
Loan Is made available for Graduation /Postgraduation /Diploma
Computer education in any recognized State/Central Government /
University, professional courses including Engineering, Medical,
Agriculture, Veterinary, Law, Dental, Management, courses like ICWA,
CA, CFA, etc, .The course is pursued abroad, the institute should be
recognized by the competent local aviation/ shipping authority. For
studies abroad, loans will be made available only for Graduation and
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Post-Graduation Courses offered by Reputed Universities and not for
diplomas

SOUTH INDIAN BANK ELIGIBLE COURSES FOR EDUCATION

LOAN
Education Loan can be availed under following cases-
•Graduate, Post graduate, Diploma and Professional courses
recognized by University Grant Commission, All India Council for
Technical Education (AICTE) and the Indian Council for Medical
Research, Government of India.
•Job oriented Professional or Technical courses of reputed
education institutes abroad, etc.
•Government recognized or approved vocational or skill
development courses.
•Courses conducted by IIM, IIT, IISC, XLRI, NIFT, etc
•Courses offered in India by reputed foreign Universities.
•Other Courses leading to Diploma/ Degree, etc. conducted by
Colleges/ Universities approves by UGC/ Govt./ AICTE/ AIBMS/
ICMS, etc.

SOUTH INDIAN BANK EDUCATION LOAN DOCUMENT

REQUIRED
For salaried individuals

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 •Duly filled up and signed education loan application form along
with photographs
•KYC (Know Your Customer)documents
•Proof of identity- Passport, Voter ID card, Driving license, PAN
card, Aadhar Card, Government department ID card
•Latest salary slip showing all deductions or Form 16 along with
recent salary certificate
•Proof of residence – Bank account statement, Latest electricity
bill, Latest mobile/telephone bill, Latest credit card statement,
Existing house lease agreement
•Bank Statement or Bank Pass Book of having entries of last 6
months
•Guarantor Form, Copy of admission letter or the Institute along
with Fees schedule (Optional)
•Mark sheets/pass certificates of S.S.C., H.S.C, Degree courses
(Optional)
•Detailed break-up of the costs of the course (Optional)

For all individuals except salaried

•Duly filled up and signed education loan application form along
with photographs
•KYC (Know Your Customer)documents
•IT returns of the last 2 years and computation of income of last 2
years certified by a Chartered Accountant

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 •Proof of identity- Passport, Voter ID card, Driving license, PAN
card, Aadhar Card, Government department ID card
•Proof of residence – Bank account statement, Latest electricity
bill, Latest mobile/telephone bill, Latest credit card statement,
Existing house lease agreement
•Bank Statement or Bank Pass Book of having entries of last 6
months
•Guarantor Form, Copy of admission letter or the Institute along
with Fees schedule (Optional)
•Mark sheets/pass certificates of S.S.C., H.S.C, Degree courses
(Optional)
•Detailed break-up of the costs of the course (Optional)

MARGIN

Up to Rs.4 lakhs Nil

Above Rs. 4 lakhs Studies Abroad 15%

SOUTH INDIAN BANK EDUCATION LOAN REPAYMENT

Repayment Holiday| Moratorium: Course Period + 1 year or 6 months
after getting job, whichever is earlier.The loan to be repaid in 5 – 7
years after commencement of the repayment.

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MODE OF REPAYMENT OF EDUCATION LOAN
•Post Dated Cheque (PDC): PDCs are given by the borrower in
advance to the bank. They will be for future dates. Bank will
deposit the cheque on the date mentioned on the cheque. This
mode used to be opted by the borrowers when there were no
online repayment options available. This mode is no longer
popular and is used by very few borrowers.
•Electronic Clearance System (ECS): This mode is very popular and
most of the borrowers opted for this mode of repaying the loan. It
is an electronic mode for transferring the EMI from borrower’s
bank to lender’s bank.
•National Automated Clearing House (NACH): NACH is a facility
offered by National Payment Corporation of India (NPCI) for
online transfer of funds on due date. This system has come into
force recently and is preferred by many people. The benefit of this
mode is that it allows transactions to be processed in real time.
•Standing Instruction (SI): It is an order or instruction which the
account holder gives to his/ her bank to pay a fixed amount to
another bank/ account at a regular interval. It is also used by
many borrowers to pay EMIs as EMI is a fixed amount. SI is not
suitable for variable amounts

SIB –EDUCATION LOANS

SIB VITJNAN PRADHAN SCHEME (VPS) for Domestic and Foreign studies.

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SIB EXCELLENCE for the creamy layer of talented youth to pursue
professionals studies in Top prestigious institutions in India and Abroad.
SIB GLOBAL EDUCATION to finance exclusively your overseas education.

EDUCATION LOAN SCHEMES FOR STUDENTS

1.SIB Vitjnan Pradhan Scheme

The main features of the scheme are as follows:
 Applicable to Indian Nationals or NRI with Indian passport.
 If student is major, parents to join as co applicants else parent
will be principle borrower.
 Eligible courses leading to graduate/PG/PG diploma with
approval and university affiliation in India and job oriented
professional/technical courses leading to degree/PG/PG
diploma and other diploma courses for overseas study.

2.SIB EDUSUM
The main features of the scheme are as follows:
 Indian Nationals or NRI with Indian passport.
 If student is major, parents to join as co applicants else parent
will be principle borrower.
 Eligible courses leading to graduate/PG/PG diploma with
approval and university affiliation in India and job oriented
professional/technical courses leading to degree/PG/PG
diploma and other diploma courses for overseas study.

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3.SIB Global Education

Eligibility: Indian nationals or Non-Resident Indians (NRIs) with Indian

passports for admission into undergraduate, postgraduate, diploma,
and PhD. Courses which are full-time as well as skill-development
courses with duration exceeding one year

Chapter-4
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DATA ANALYSIS AND
INTERPRETATION

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Chapter-5
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 FINDINGS,
SUGGESTIONS AND
CONCLUSION

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 SUGGESTIONS

The educational loan system can be improved by providing a loan

with absolutely zero interest. This will help the students to attract
more towards higher education. The higher education is the best
way to develop the economic strength of our country. Even
though there is subsidy provided by central government, the loan
at free of interest will be better. This should be done with proper
analysis on the economical background of students. Another
problem is the misuse of educational loans by some people for
other purposes. This can be avoided by providing loan directly to

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the college. In this method, the loan amount will be directly
transferred to the college account with full security. This scheme
is not always possible due to many reasons. The formalities
needed for getting an educational loan should be reduced in
a proper way.

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