Education Loan: Study in India

• You can borrow up to Rs 4 Lac without providing any security or margin.
• You can get a loan amount of Rs 4 Lacs to Rs 7.5 Lacs against a third-party guarantee. This loan comes with a five percent margin. The loan amount disbursed is 5 % lesser than the sanctioned amount. You need to arrange for the rest of the money. The third-party guarantee can come from any relation, neighbour or friend standing guarantee for the full amount.

Education Loan: Study Abroad

• Amount of loan sanctioned may vary but usually Rs 7 Lacs and above are usually sanctioned against fixed deposits, NSC certificates, property worth the loan amount and a margin amount of 15 percent. This loan comes with a five percent margin. The loan amount disbursed is 15 % lesser than the sanctioned amount. You need to arrange for the rest of the money.
• Also, if a loan below Rs 4 Lacs comes at x rate of interest, the loan over Rs 4 Lacs is usually charged one percent higher interest that is x+1.

Note: The Reserve Bank of India prescribes the specifics (amount, rate, repayment period) of education loans and the government provides a two per cent subsidy on these loans to the banks.

Documents required for education loan

• Mark sheets of the last qualifying examination for school and graduate study
• Proof of admission to the course
• Schedule of expenses for the course
• Copies of the letter confirming scholarship, if any
• Copies of foreign exchange permit, if applicable
• Two passport size photographs
• Statement of borrower's bank account for the last six months
• Income tax assessment order not more than two years old
• Brief statement of the assets and liabilities of the borrower
• Residence proof

Education Loan: Eligibility and Interest Rates

Oriental Bank of Commerce

• Eligibility for Loan: All Indian nationals who are below 45 years who have secured admission to a recognized course in an approved university are eligible.
• Expenses Covered: The loan covers all expenses including tuition, books, airfare, study tours etc. For accommodation the amount is paid to the management of the boarding house.
• Loan Upper limit: For students pursuing their education abroad, the loan amount is a 15 Lac. This is subject to a 5% margin, i.e. students have to put in this amount themselves.
• Rate of Interest: For a loan of Rs 4 Lac or less, the bank charges an interest of 11.25 percent per annum. For loans above 4 Lac, the rate of interest is 12% per annum.
• Repayment Period: The student gets a holiday period for a year after they finish their course or six months after they find a job, following which the loan is to be paid over 84 EMI’s.
• Security: Up to Rs 4 Lac-co-obligation of guardian is a must. Up to Rs 7.5 Lac a third party guarantee is also needed. Up to 15 Lac, security/assets equal to 100% loan amount.

Syndicate bank

• Eligibility for Loan: Any student, who is an Indian national, and a major, or represented by a guardian is eligible for the loan. The bank gives loans for all recognized institutes overseas.
• Expenses Covered: The bank provides finance for tuition boarding, books and travel. However, no assistance is provided for capitation fees and coaching.
• Loan Upper limit: For overseas education, the maximum loan amount is Rs. 15 Lac with a margin of 5 %i.e. students need to put in that amount themselves
• Rate of Interest: To study abroad, the rate of interest is 1.5% - the current PLR (13.25) which means an interest of 11.75%.
• Repayment Period: The amount has to be paid back in 5 to 7 years commencing one year after completion of the course or 6 months after securing the job whichever is earlier.
• Security: Up to Rs 7.5 Lac, no security required. For over 7.5 Lac, collateral security equal to 100% of the loan amount with suitable margin and a third party guarantee is needed.

Bank of Baroda

• Eligibility for Loan: The applicant should be a citizen of India and secured admission to the course. No minimum marks required and loans are provided for all recognized courses.
• Expenses Covered: The loan covers all expenses incurred during the study period like tuition fees, boarding and lodging, books, study tours, laptops, travel or any other requirement.
• Loan Upper limit: For studying abroad, the student gets a maximum loan of Rs 10 Lac for an UG course and 15 Lac for PG education. The margin money in this case is 15%
• Rate of Interest: For education loans to study abroad, the rate of interest is Rs 12% for less than 4 Lac and 14% for any loan amount up to a maximum of Rs 15 Lac.
• Repayment Period: It needs to be paid a year after the completion of the course or six months after finding a job, whichever is earlier. Then, the loan has to be paid back within a period of five years.
• Security: Up to Rs 4 Lac no security is required. Between 4-7.5 Lac, a third party guarantee & assignment of future income is needed. Up to 15 Lac, 100% collateral security is mandated

State bank of India

• Eligibility for Loan: The applicant should be an Indian national and have secured admission into any course that has employable prospects.
• Expenses Covered: Expenses covered in the loan include tuition fees, travel, books, computer and even a two wheeler costing up to Rs 50,000.
• Loan Upper limit: For studies abroad, the maximum loan amount is Rs 20 Lac and a margin of 15% is required if the loan amount is more than Rs 4 Lac
• Rate of Interest: For education loans, the rate of interest is Rs 12.75% for less than 4 Lac and 13.75% for any amount above that.
• Repayment Period: Payment starts a year after the completion of the course or six months after finding a job. For a loan of less than 7.5 Lac the student has 5-7 years and for more than that 5-10 years.
• Security: No security is required for a loan up to Rs 4 Lac. From 4-7.5 Lac a third party guarantee is required and for 7.5 and above, the bank needs collateral security for the full value of the loan.

Note: Interest rates may vary at the time of application and disbursement.