The Educational Loan Scheme outlined below aims at providing financial support from the banking system to deserving/ meritorious students for pursuing higher education in India. The main emphasis is that every meritorious student though poor is provided with an opportunity to pursue education with the financial support from the banking system with affordable terms and conditions. No deserving student is denied an opportunity to pursue higher education for want of financial support.
Banks may have the system of appraising other institution courses depending on future prospects/recognition by user institutions.
Most of the Public Sector Banks in India have categorized Student Loans in two categories. Students can borrow up to Rs 4 lakh without providing any security or margin. A loan amount of Rs 4 lakhs to Rs 7.5 lakhs can be availed against a third-party guarantee. This loan comes with a five percent margin (what this means is that you will get five percent less the amount sanctioned as loan; you will have to put together the rest of the money). The third-party guarantee can come from an uncle, neighbor or friend standing guarantee for the full amount.
|Upto Rs 4 lacs||-Co-obligation of parents.
|Above Rs. 4 lacs and upto Rs7.5 lakhs||-Co-obligation of parents together with collateral security in the form of suitable third party guarantee. The bank may, at its discretion, in exceptional cases, waive third party guarantee if satisfied with the net-worth / means of parent/s who would be executing the document as "joint borrower".|
|Above Rs.7.5 lakhs||Co-obligation of parents together with tangible collateral security of suitable value, along with the assignment of future income of the student for payment of installments|
– Course period + 1 year or 6 months after getting job, whichever is earlier.
No processing/ upfront charges may be collected on educational loans for studies in India.
All students are required to submit mark sheets of last qualifying examination, poof of admission scholarship, schedule of expenses for the specified course, his/her bank account statement for the last six months, an income tax assessment order for the previous two years, a brief statement of assets and liabilities, of the co-borrower, which is usually the parent or guardian and proof of income, if any.
Some banks require all or any of the following documents as pre sanction documents: To furnish the following documents along with the completed application form. Relevant information would relate to the guardian and the student both, when the loan is jointly taken.