Education loans are granted for higher studies at colleges affiliated with recognized universities, medical colleges, technical institutions, pharmaceutical colleges, IT institutions, and similar — so that students from poor and middle-class families, as well as brilliant and needy students, can take advantage of the scheme. The scheme does not cover correspondence courses.
Eligibility
Individuals, professionals, self-employed persons, industrialists, traders and businessmen.
Income
Depends on the applicant's capacity to service the debt and the applicable limit of advance.
| # | Details |
|---|---|
| 1 | Who Will Be Applicant: If the student is a minor, the parents/guardian will be the applicant(s). If the student is a major, the student is the applicant. |
| 2 | Co-applicant: Parents/guardian of the student. For a married student, either the spouse or a parent/parent-in-law can be the co-applicant. |
| 3 | Purpose: Inland — diploma/graduation/post-graduation at colleges affiliated with recognized universities, medical colleges, technical institutions, pharmaceutical colleges, IT institutions, and approved computer certificate courses. Foreign — higher education abroad at similarly affiliated institutions. Correspondence courses are not covered. |
| 4 | Loan Amount: Inland — minimum ₹10,000, maximum ₹10 lakh. Foreign — minimum ₹50,000, maximum ₹20 lakh. |
| 5 | Margin: Inland 10% of total expenditure; Foreign 15% (scholarship is included in the margin). No margin required for loans up to ₹2 lakh, or where 100% collateral security is offered as immovable property or liquid security. Total expenditure includes tuition, term fees, living expenses, travel, books, and exam fees. |
| 6 | Rate of Interest: As per the bank's published interest rates. |
| 7 | Repayment Period: 84 months if the course is under 3 years, 120 months if 3 years or more — both inclusive of the moratorium period. |
| 8 | Moratorium Period: Course period plus 6 months (no moratorium for loans below ₹1 lakh). |
| 9 | Penal Interest: 2% p.a. |
| 10 | Collateral Security: Up to ₹2 lakh — none required. Up to ₹5 lakh — tangible securities (FDRs, government securities), movable security (vehicle), or immovable property at a minimum of 60%. Above ₹5 lakh — minimum 100%. |
| 11 | Service Charges: As per the bank's published service charges. |
| 12 | Sureties: Two guarantors, unless 100% collateral security is offered as immovable property or liquid security, in which case none are required. |
| 13 | Insurance of Student: A life insurance policy on the student is required for foreign education, assigned in favour of the bank. |
| 14 | Insurance of Securities: Insurance against fire, riots, etc., in the bank's name on behalf of the borrower, required for vehicle or immovable security. |
| 15 | Share Linkage: 5% of the sanctioned amount for unsecured loans up to ₹2 lakh; 2.5% for secured loans. |