State bank of India provides loans to students wanting to pursue higher education
in India and abroad. Unlike other banks which maintain a list of courses which they
are ready to finance, the State Bank considers every course which has employment
prospects. To gain a rough idea, Graduation courses, Post graduation courses, Professional
courses as well as other courses approved by UGC/Government/AICTE are considered.
The bank also offers SBI career loan upto a maximum of 20 lakhs for individuals
wishing to undertake commercial Pilot training courses and Airhostess Training courses
in India and abroad, from institutes recognized by the Ministry of Civil Aviation/DGCA.
The loan can be secured through mortgage of Immovable Property/Govt.Securities,
Public Sector Bonds,NSCs/KVPs/RBI Relief Bonds/Bank's TDR/LIC Policies etc. In this
case, the applicant should be atleast 18 years old, while the co-applicant, less
than 60.
What the loan covers :
* Fees payable to college/school/hostel
* Examination/Library/Laboratory fees
* Purchase of Books/Equipment/Instruments/Uniforms
* Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tution fees
for the entire course)
* Travel Expenses/Passage money for studies abroad
* Purchase of computers considered necessary for completion of course
Apart from these expenses, the bank will also finance the purchase of a two-wheeler
up to Rs. 50,000. Other expenses required to complete the course are also covered.
These may include study tours, project work etc.
Details :
A student can avail of a maximum of 10 lakhs loan if he is studying in India. For
studies abroad, the limit is 20 lahks. The repayment period for both the loans is
5-7 years including the duration of the course. Repayment period begins 1 year after
the completion of the course, or 6 months after obtaining a job - whichever is earlier.
In case of the Career Loan, the amount has to repaid in 36 equated monthly installments
with a maximum moratorium of one year after the completion of the course. Processing
fee of 0.5 % is also applicable.
The interest rates depend on the amount of loan.
SBI Educational Loan
Upto 4 lakhs - 11.75% p.a
4 lakhs to 7.5 lakhs - 13.25 % p.a
Above 7.5 lakhs - 12.25 % p.a
Securities :
The securities and margins which need to be provided to take the loan also depend
on the amount.
For SBI Educational Loan
Upto 4 lakhs : No securities/margins required.
4 lakhs to 7.5 lakhs : The bank will
require collateral security in the form of a suitable third party guarantee. In
some cases the bank may waive third party guarantee if it is satisfied with the
net-worth/means of parents who would be applying for the loan as a "joint borrower".
In case the student is studying in India, the margin is 5%, otherwise 15%.
Above 7.5 lakhs : The bank
requires "tangible" securities of appropriate value. Land property, real
estate, jewellery etc. qualify as "tangible" assets. Apart from that,
the future income of the student is to be assigned to the bank for payment of the
installations. Again, if the student is studying in India, the margin is 5%, otherwise
15%.
Documents 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
* 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)