You want to pursue bachelor degree from an international university and get
your education financed. Visit the website of any public or private sector bank.
Collect information required for availing loan for the amount you require.
According to the education cost you wish to finance, give details about the loan
size, tenure, eligibility, collateral, repayment and other requirements relevant
for availing an education loan. Also, work out the EMIs for the repayment of
the loan by taking assumed figure for the loan principal and tenure.
In SBI , education loan is granted to Indian Nationals for pursuing higher education
in India or abroad where admission has been secured.
Expenses Covered by the loan
Fees payable to college/school/hostel
Examination/Library/Laboratory fees
Purchase of Books/Equipment/Instruments/Uniforms, Purchase of
computers- essential for completion of the course (maximum 20% of the
total tuition fees payable for completion of the course).
Caution Deposit/Building Fund/Refundable Deposit (maximum 10% of
tuition fees for the entire course).
Travel Expenses/Passage money for studies abroad.
Cost of a Two-wheeler upto Rs. 50,000/-
Any other expenses required to complete the course like study tours, project
work etc.
Loan Amount
For studies in India - Maximum Rs 10 lacs
Studies abroad - Maximum Rs 20 lacs
Features
Repayment period of upto 15 years after Course Period + 12 months of
repayment holiday*
No processing / upfront charges will be levied on Education loans
Security
Upto Rs. 7.5 Lacs:Only Parent/ Guardian as co-borrower. No Collateral
Security or third party guarantee
Above Rs. 7.5 Lacs:Parent/ Guardian as co-borrower and tangible
collateral security
Margin
Up to Rs 4 Lacs - Nil
Above Rs 4 Lacs - 5% for studies in India, 15% for studies in abroad
Repayment will commence one year after completion of course.
Loan to be repaid in 15 years after the commencement of repayment
In case second loan is availed for higher studies later, to repay the
combined loan amount in 15 years after completion of second course
EMI Generation
The accrued interest during the moratorium period and course period is
added to the principle and repayment is fixed in Equated Monthly
Installments (EMI).
If full interest is serviced before the commencement of repayment; EMI
is fixed based on principle amount only.
SBI STUDENT LOAN SCHEME
Loan 3 Year Spread Effective Rate
Limit MCLR Interest Type
Rate
Upto Rs 8.20% 2.00% 10.20% Fixed
7.5 Lacs
Concession 0.50% concession in interest for girl students
Above Rs 8.20% 2.00% 10.20% Fixed
7.5 Lacs
Concession 0.50% concession in interest for girl students
0.50% concession for students availing of SBI Rinn Raksha or
any other existing policy assigned in favour of our Bank
According to the question, I assume that I require a loan for 10 lacs. The loan
amount to be repaid within 5 years. According to the terms and conditions I will
need my parents as co-borrower and some form of tangible security since my loan
exceeds 7.5 lacs.
SBI requires that I put in atleast 15% of margin. The margin is the amount that a I
need to pay from my own funds, while the balance amount of the loan will be paid
by the bank. For example, I have a tution fee of 20 lacs case, the bank is ready to
maximum finance 85 per cent (17lacs) of the loan amount. The balance of
remaining 20 per cent or Rs.20,000 has to be provided by me. This money of (Rs
20,000), which the borrower puts into his business is called margin money.
Assuming that I have met all the conditions of SBI, I have worked out an
amortization schedule below-
EMI Schedule
Equated Monthly Installment - EMI for short - is the amount payable every month
to SBI until the loan amount is fully paid off. It consists of the interest on loan as
well as part of the principal amount to be repaid. The sum of principal amount and
interest is divided by the tenure, i.e., number of months, in which the loan has to be
repaid. This amount has to be paid monthly.
The interest component of the EMI would be larger during the initial months and
gradually reduce with each payment. The exact percentage allocated towards
payment of the principal depends on the interest rate. Even though your monthly
EMI payment won't change, the proportion of principal and interest components
will change with time. With each successive payment, I’ll have to pay more
towards the principal and less in interest.
Here's the formula to calculate EMI:
where
E is EMI
P is Principal Loan Amount
r is rate of interest calculated on monthly basis.
(i.e., r = Rate of Annual interest/12/100.
Our rate of interest is 10.20% per annum, then r = 10.20/12/100=0.0085
EMI= 10,00,000 * 0085*(1.00852)/(1.00852 -1)
=21345.58 or nearly 21346
AMORTISATION SCHEDULE
Payment EMI Principal Monthly Outstanding Balance
Interest
Number Or Repaid
Periodic
payment
0 1000000
1 21346 12846 8500 987154
2 21346 12955 8391 974200
3 21346 13065 8281 961135
4 21346 13176 8170 947959
5 21346 13288 8058 934671
6 21346 13401 7945 921270
7 21346 13515 7831 907755
8 21346 13630 7716 894126
9 21346 13746 7600 880380
10 21346 13862 7483 866518
11 21346 13980 7365 852537
12 21346 14099 7247 838438
13 21346 14219 7127 824220
14 21346 14340 7006 809880
15 21346 14462 6884 795418
16 21346 14585 6761 780834
17 21346 14708 6637 766125
18 21346 14834 6512 751292
19 21346 14960 6386 736332
20 21346 15087 6259 721245
21 21346 15215 6131 706030
22 21346 15344 6001 690686
23 21346 15475 5871 675211
24 21346 15606 5739 659605
25 21346 15739 5607 643866
26 21346 15873 5473 627993
27 21346 16008 5338 611986
28 21346 16144 5202 595842
29 21346 16281 5065 579561
30 21346 16419 4926 563142
31 21346 16559 4787 546583
32 21346 16700 4646 529883
33 21346 16842 4504 513042
34 21346 16985 4361 496057
35 21346 17129 4216 478928
36 21346 17275 4071 461653
37 21346 17422 3924 444232
38 21346 17570 3776 426662
39 21346 17719 3627 408943
40 21346 17870 3476 391073
41 21346 18021 3324 373052
42 21346 18175 3171 354877
43 21346 18329 3016 336548
44 21346 18485 2861 318063
45 21346 18642 2704 299421
46 21346 18801 2545 280621
47 21346 18960 2385 261660
48 21346 19121 2224 242539
49 21346 19284 2062 223255
50 21346 19448 1898 203807
51 21346 19613 1732 184194
52 21346 19780 1566 164414
53 21346 19948 1398 144466
54 21346 20118 1228 124348
55 21346 20289 1057 104059
56 21346 20461 885 83598
57 21346 20635 711 62963
58 21346 20810 535 42153
59 21346 20987 358 21166
60 21346 21166 180 0
