EDUCATION LOAN

Submitted to:- Mr. Susheel

Submitted by:- Akbar Hussain Habeeb

Ameen K.T
 Till some years back higher education and quality education was
not affordable to some illustrious students because of the
financial constraints. There was no any alternative but to jump in
the job market prematurely. 

And this led to untimely end of budding talents and their forceful
transformation into to the mediocrity. Scholarships were there,
but those were so less in numbers that only luckier few could
avail them. But now the scene has changed drastically. 

The boom in the banking sector has led to release of large

amount of funds for education loans. Now, education loans are
easily available from various banks in India and this change is
encouraging more and more students to take up higher education
despite their financial shortcomings.

Many nationalized banks have come up with various educational

loan schemes that 
 Education Loans from Banks
• Allahabad Bank
• Bank of Baroda
• Punjab National Bank
• Indian Bank
• State Bank of Mysore
• Andhra Bank
• Bank of India
• State Bank of Indore
• Karnataka Bank
• Bank of Maharashtra
• Bank of Rajasthan
• State Bank of Hyderabad
• State Bank of India
• Vijaya Bank
• Vysya Bank
• State Bank of Saurashtra
• Canara Bank
• Catholic Syrian Bank
• Central Bank
• Dena Bank
• Development Credit Bank
• Federal Bank
• HDFC Bank
• IDBI
• Mysore Bank
• Oriental Bank of Commerce
• Indian Overseas Bank
• Punjab and Sind Bank
• Syndicate Bank
• UCO Bank
• United Western Bank
• United Bank Of India
• Some of them are as follows
1. This is a scheme provided by HDFC bank it is
named as CREDILA
– Indian students going overseas and
– Indian students attending colleges in India
• The loan will be disbursed in India in Rupees which
can be converted in foreign currency, if needed, by
the student. 
Repayments of the loan to be made by the
borrower in Indian Rupees only.
• Eligibility
– Borrower must be an Indian citizen
– Co-borrower must be an Indian citizen
– Borrower must be 18 years of age or older
– Co-borrower must have a bank account in any bank in
India with check writing facilities
– Confirmed admission in the colleges before
disbursement
– Borrower and Co-borrower to meet Credila's
underwriting criteria
• Co-borrower Requirement
– The loan will be co-signed by a co-borrower in India
– A co-borrower is mandatory for all the student loans
– The co-borrower can be parent, brother, sister, guardian,
or any other relative
– Co-borrower's role would be, necessarily, like the
primary debtor
– What Costs Are Covered?All of the tuition fees as
determined by the college/University
– Up to 75% of other expenses including living expenses,
books, etc. as determined by the college/University
– Up to INR 50,000 for travel to abroad from India, if
applicable
• Loan Amount
 
Minimum Loan Amount Lifetime Maximum Loan Amount
Indian Rupees 1,00,000 Indian Rupees 20,00,000
•  Rate Of Interest
– Rate of interest will be floating rate of interest linked
to Credila's Benchmark Lending Rate (CBLR)
– The floating interest rate will calculated monthly
based on the prevailing CBLR at the beginning of the
month
– The interest will be calculated using Simple Interest
Rate
– Floating rate of interest to be Credila's CBLR + 1.00%
per annum
• Loan Disbursement
– The loan amount will be disbursed in Indian
Rupees
– Credila's servicer will disburse the tuition fee
directly to the educational institute
– The tuition fee will be disbursed in installment as
per the requirement of the specific educational
institute
– The loan amount related to other expenses will be
disbursed in installments spread over the duration
of the study
• Loan Re-payment Terms
– Loan Interest Re-payment
• Loan interest re-payment will start immediately after disbursement of
the first installment of the loan
– Loan Principal Amount Re-payments must commence
• After 6 months of completion of studies by the borrower or
• 3 month after borrower getting an employment or starting a business or
• 3 month after borrower discontinuing the educational program, 
whichever is earlier.
– The principal and interest is repayable in 90 monthly
installments
– Monthly repayment amount will be deducted from the bank
account of the borrower/co-borrower using Electronic Clearing
System (ECS)
– Post Dated Checks (PDC) to be collected as security cheques
from the borrower/co-borrowers
• Collateral
– The following types of collateral are accepted
• Non-Agricultural Land
• House
• Apartment/Flat
• A life insurance policy for the student, assigned in favor
of Credila, for the value of at least the amount of loan
approved
2. Education Loans of State Bank of India

• Courses Eligible for Education Loans:

– A candidate, who applies for a program with prospects

of employment, can apply for the loan. Whether you
apply for a graduate,
– professional or postgraduate program or any other
course sanctioned by UGC, AICTE or the government,
you will be considered eligible for the loan.
• Expenses taken into account:

– The student loan covers school, college or hostel fees as

well as cost for buying books and other necessary items.
– Apart from the library, exam or library fees, even caution
deposit, refundable deposit and building fund are
considered for the loan.
– Other expenses, which are mandatory for completing
the course, travel expense as well as a maximum cost of
Rd 50,000 for buying a 2 wheeler, are taken into account.
• Quantum of Loan & Security:

– An applicant is sanctioned a loan of maximum Rs 10 lacs for studying in

India and Rs 20 lacs for studying in abroad. On a loan above Rs 4 lacs, there
is a
– margin of 5% and 15% for studying in India and abroad respectively.
– No security is required for loan amount upto Rs 4 lacs.

– A borrower should present a 3rd party as guarantee for a loan amount

above Rs 4 lacs. However, on SBI discretion, this clause of
– 3rd party guarantee may be waived off in certain cases.
– If you borrow a loan amount above Rs 7.5 lacs, you need to offer a material
collateral security and assign the future income of the student for paying
installments.
– The guardians or parents of a borrowing student should secure an
education loan.
– If the borrower is married, his or her spouse, parents-in-law or parents can
act as the co-obligator.
• Repayment of Education Loan:

– The borrower can begin repaying 6 months after getting job or

one year after the course is completed, whichever happens earlier.
– The loan can be repaid in a period of 5 to 7 years.

• Education Loan for ISM students:

– Education loans are also offered to the students of ISB. An ISB

student can borrow upto 95% of costs. There is also a margin of
5% on
– the loan amount, which needs to be repaid in 7 years. For
detailed information on this loan scheme for ISB students, you can
contact the branch at
– Hyderabad University Campus Branch.
 EDUCATION LOAN SCHEME
 
Base Rate 7.60 % w.e.f. 21.10.2010
SBI Student Loan Scheme
Loan Amount  Rate of Interest
 For loans up to Rs.4 lakhs 3.75% above Base Rate, currently 11.35% p.a.
 
Above Rs.4 lakhs and up to Rs.7.50 lakhs 5.25% above Base Rate, currently 12.85% p.a.
Above Rs.7.50 lakhs 4.25% above Base Rate, currently 11.85% p.a.

• Education Loan Scheme for students of ISB, Hyderabad 

• 2.75% above Base Rate, currently 10.35% p.a. 
• (0.50% concession in interest for girl student)
• SBI Scholar Loan Scheme 
• 2.75% above Base Rate, currently 10.35% p.a.(Irrespective of the loan
amount)
• (0.50% concession in interest for girl student)
• This is are the documents required for education
loan
• Appraisal Docs 
1. Attested copy of latest salary slip of self / parent 
and Form 16 for salaried employees 
2. Income tax returns for the last 3 years for self-
employed persons. 
3. Pass book or bank statements for last six months 
4. Proof of Age and Residence of Self / Parent. 
5. Certificate / Mark Sheet of last qualifying exam. 
6. Details of proposed course 
7. Copy of sale agreement, share certificate, NOC
from society/builder or documents pertaining to
other collateral as applicable
• Documentation
1. Promissory Note
2. D. P. Note Delivery Letter
3. Documents pertaining to collateral security
4. Authority letter in duplicate from borrower
authorizing salary deduction or PDCs
5. No dues affidavit
6 All documents to be signed jointly by the student
and parent / guardian
If you want to know about the interest rates
or other details of the Study Loan scheme
of SBI, you can click on
http://www.sbi.co.in/
This is a new policy suggested by us
• Loan amount should be increased
• Interest should be reduce
• An offer should be introduced like this
– There is no interest for the 1st and last year
– Collateral security is required only for the amount
more than 8.5 lakhs
 Our Customers
• Suspects : students who were going for the higher
education and quality education
• Prospects : on that who were in need of finance
• Client : some of the prospects when they need of a
loan they will take only from us
• Advocates : claints who were encourage others to
take loan
• Partners : they will make new idea and recive a
certain percentage as profit