Thursday, 14 October 2010

Education Loan from State Bank of India

State Bank of India provides Education Loan to Indian Nationals for higher education in India and abroad according to the place of admission. It is helpful for students and parents those who cannot take a lump sum amount at once for the education. The Loan repayment is allowed only after completing the education. It is a term loan for a long period.

The loan is allowed for all courses including Graduation, Post Graduation, Professional courses and other courses approved by UGC, Government or AICTE, which has an employment prospects.

The Loan is allowed for the expenses such as fees payable to college, school or hostel, for purchasing Books, Uniform and other study materials, security deposits and other refundable deposits, building fund, travel expenses and passage money for studying abroad The loan is also allowed for Computers (if necessary for study) and for two wheeler (maximum Rs. 50000) and for refundable deposit the limit is up to 10% of the tuition fee, and any other expenses required to complete the course like study tours, project work etc.

The Maximum amount allowed as loan is Rs. 10 lakhs if the study is in India and Rs. 20 Lakhs for studying outside India.

There is no processing fee or upfront charges for the loan, but a deposit of Rs. 5000 is required for the loan for studying abroad and the amount will be adjusted with margin money.

Repayment period is 5 to 7 years and the repayment starts from one year after completing the study or 6months after getting a job whichever is earlier.

No collateral securities required for a loan up to Rs. 400000 and suitable third party guarantee, most probably from parents or guardian according to the net worth of such party’s up to Rs. 750000 and a tangible collateral security is required for the loan amount above Rs. 750000. All loans should be secured by parent(s)/guardian of the student borrower. In case of married person, co-obligator can be spouse or the parent(s) or parents-in-law.

There is no margin fee for the loan amount up to Rs. 400000 and a 5% Margin fee is required for studying in India and 15% margin fee for studying outside India, if the loan amount more than Rs. 400000.

The documents required for education loan are 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 and Proof of Income (i.e. Salary slips/ Form 16 etc)

For interest rate, concession in interest rate and more details please visit State Bank of Indias Website.

Note/Disclaimer: This website is just meant for information purpose and it is NOT an official website of State Bank of India. For more details please visit www.  Readers are requested not to entirely rely on information available on this website without independent verification of the same and or anyone related to this site will not responsible for any accuracy of the information.

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