Name:- Tejas Kishor Potdar
College Name:- Babasaheb Gawde Institute of Management Studies
STUDENT LOAN
COMPARISON OF STUDENT LOAN OFFERED BY
DIFFERENT BANK
A loan taken to meet tuition fees, hostel fees, and other related expenses for pursuing
a specified educational course in an institution is called as Student Education Loan.
Banks offer student loans for pursuing pre-specified courses in India and abroad from
certain institutions. Banks release a list of permitted courses and institution for which
it will give education loan. So, the course we want to pursue is within the bank’s list
along with the institution we wish to join, then we can apply for an education loan.
EDUCATION LOAN ELIGIBILITY:-
Determinants of Eligibility for Education Loans
1. Age of the Applicant:-
Upto 35 years for non-employed personnels.
Upto 45 years in case of working employees/ executives.
2. Who is Eligible?
An Indian National having secured admission to professional/ technical courses
in recognized institutions.
Student seeking admission for higher studies.
Permanent employees who are employed for not less than three years with any
organisation and who intend to acquire higher professional qualifications and
have secured admissions in a reputed institute.
3. Maximum Loan Amount:-
Typically upto Rs. 10 Lakh for studies in India; with minimum margin money
(own contribution by student/ family) of 5% of total cost.
Typically upto Rs. 20 Lakh for studies abroad, some bank offer upto Rs. 30 Lakh
with minimum margin money (own contribution by student/ family) of 15% of
total cost.
Upto Rs. 30 Lakh for studies at IIT’s, IIM’s and ISB’s with minimum margin
money (own contribution by student/ family) of 5% of total cost.
4. Which Cost Heads/ Expenses are Funded by Bank?
Admission fees including Monthly Fees and Examination Fees.
Books, Stationary and Equipments.
Airfare for joining the course abroad.
Purchase of PC, laptop as essential for the completion of the course.
Boarding and Lodging expenses of authorized hostel or boarding house.
Caution deposit/ refundable deposit supported by the bill from the institution.
Subject to the amount not exceeding 10% of the tuition fee.
Insurance premium, if opted by the student.
Other required expenses like study tour, project work, thesis, etc.
5. Co-borrower/ Guarantor Security:-
Loans upto Rs. 4 Lakh: Parents or guardian or husband/ in-laws can be a co-
borrower incase of married woman.
Loans above Rs. 4 Lakh and upto Rs. 7.50 Lakh: Parents or guardian or
husband/ in-laws in case of married woman need to be co-borrower and a third
party guarantee needed as collateral.
Above Rs. 7.50 Lakh: Parents or guardian or husband/ in-laws in case of married
woman need to be co-borrower and tangible security equivalent to 100-113% of
loan amount as collateral.
6. Repayment Frequency:-
Quaterly or monthly rests
Repayment typically starts 1 year after completing the course or six months after
getting a job, whichever is earlier.
7. Repayment Period:-
Varies from bank to bank- can range from 7 to 15 years.
There is no prepayment penaly or charge on early prepayment or foreclosure.
8. Key Appraisal Criteria:-
Good academic record with atleast 50% marks in the qualifying examinations.
Admission letter from bonafide educational institution.
Passport/ visa/I-20 form for studies abroad.
Net-worth and credit history(CIBIL) of the guarantors.
COMPARE STUDENT LOAN INTEREST RATE:-
Bank Education Loan Interest Education Loan
Rates in India Interest Rates in
Abroad
Avanse DHFL 12.65% 12.65%
Axis Bank 13.70% 13.70%
Bank of Baroda 7.70% 8.35%
Bank Of India 8.95% 8.95%
Bank of Maharashtra 8.55% 8.55%
Canara Bank 8.50% 8.50%
Central Bank of India 8.50% 8.50
Corporation Bank 8.80% 8.80%
Federal Bank 10.05% 10.05%
IDBI Bank 6.90% 8.40%
Indian Bank 7.15% 7.15%
Indian Overseas Bank 9.05% 9.05%
Karnataka Bank 9.85% 9.98%
Karur Vysya Bank 10.60% 10.60%
OBC 7.05% 10.65%
PNB 7.55% 10.65%
SBI 7.00% 8.80%
UCO Bank 9.30% 9.30%
Union Bank of India 8.40% 8.05%
United Bank of India 10.65% 10.65%
STUDENT LOAN APPLICATION PROCESS:-
Attach Your admission letter received from the college or institution along with
your application.
Keep the primary documents like PAN card, age proof, address proof, etc.
Compare various education loan based on the interest rate, tenure, loan amount.
The mark-sheet of 10th and12th would come handy. Keep them ready for attesting.
DOCUMENTS REQUIRED FOR EDUCATION LOAN:-
Duly filled the application form along with two passport size photographs of the
applicant and co-applicant.
Admission Letter from the Institute. It should have the institute name and address
on the letterhead.
The detailed cost breakup of the course from the Institute, which specifies the
tuition fee, the term of the course, year wise charges, and expenses.
The academic record of the applicant which should include 12th Marksheet,
certificate of any subsequent education like graduation or post-graduation, mark
sheet of the entrance exam (if any), and any scholarship document.
An affidavit or a declaration that no loan has been availed from any other bank or
financial institution.
Any ID proof like PAN card, Aadhar card, Driving License, passport, etc.
Any Address proof like Ration card, Driving License, Passport, Aadhar Card, etc.
For age proof Birth Certificate or 10th Class certificate.
TAX BENEFIT ON EDUCATIONAL LOAN:-
Interest paid on education loan can be claimed as deduction from income of
borrower (student) as per section 80E of the Income Tax act,1961.
Rebate can be claimed without any upper ceiling or cap.
Rebate is available for full time courses, part time courses and vocational courses
pursued in India and abroad.
Rebate can be claimed within eight years post moratorium period subject to
actual payment of interest.
No rebate is available for Principal repayment.
