State Bank of India, country’s largest lender offers several types of educational loans for higher studies in India and abroad. The bank’s Student Loan Scheme, Scholar Loan Scheme, Loan Scheme For Vocational Education And Training and Central Scheme For Interest Subsidy are among the various loan schemes that are available for students. Education loans are tax effective as interest paid for an education loan qualify for tax deduction under section 80E of Income Tax Act. Here are all the details like eligibility, duration, security, repayment that you need to know about SBI education loans.
Student Loan Scheme
This scheme entails granting of a term loan to Indian nationals for pursuing higher education in India or abroad where admission has been secured. Repayment period granted under this loan is up to 15 years after the course Period + 12 months of repayment holiday, says the official SBI website. The bank will not charge any processing/ upfront charges for education loans.
Eligibility: You should have already secured an admission to a course.
Courses Covered
a. Studies in India: Graduation, post-graduation including regular technical and professional degree/diploma courses conducted by colleges/universities approved by UGC/ AICTE/ IMC/ Government etc
Regular Degree/ Diploma Courses conducted by autonomous institutions like IIT, IIM etc
Teacher training/ Nursing courses approved by Central or State Governments
Regular degree/ diploma courses like aeronautics, pilot training, shipping etc. approved by Director General of Civil Aviation/ Shipping/ concerned regulatory authority
b. Studies abroad:
Job oriented professional/ technical graduation degree courses/ post-graduation degree and diploma courses like MCA, MBA, MS, etc offered by reputed universities
Courses conducted by Chartered Institute of Management Accountants – London, CPA (Certified Public Accountant) in USA etc.
Expenses Covered
Fees payable to college/school/hostel
Examination/library/laboratory fees
Purchase of books/ equipment/instruments/ uniforms, 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 up to Rs. 50,000/-
Any other expenses required to complete the course like study tours, project work etc
Loan Amount: For studies in India one can get a maximum of Rs. 10 lakh while for abroad a maximum of Rs. 20 lakh can be availed.
Security
If the loan amount is up to Rs. 7.5 lakh, only parent/guardian is required to be registered as a co-borrower. No collateral security or third party guarantee is needed, states SBI website. However, if the loan amount is above Rs. 7.5 lakh, parent/ guardian is registered as a co-borrower along with tangible collateral security. If the borrower is married, the co-obligator can be a spouse or the parent(s)/ parents-in-law.
Margin
Up to Rs. 4 lakh: Nil
Above Rs. 4 lakh : 5 per cent for studies in India, 15 per cent for studies abroad
Repayment
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 after completion of second course 15 years is given
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 (EMIs), according to the website. If full interest is serviced before the commencement of repayment; EMI is fixed based on principle amount only.
Interest:
SBI STUDENT LOAN SCHEME
Loan Limit 1 year MCLR Spread Effective Interest Rate Reset Period
Upto Rs. 7.5 Lacs
8.00%
2.00%
10.00%
1 year
Above Rs. 7.5 Lacs
8.00%
2.75%
10.75%
1 year
Concession
0.50% concession in interest for girl students
Further Concession
1% concession for full tenure of the loan, if interest is serviced promptly as and when applied during the moratorium period, including course duration
Documents Required
Letter of admission
Completely filled in Loan Application Form
2 passport size photographs
Statement of cost of study
PAN Card of the student and Parent/ Guardian
Aadhaar Card of the student and Parent/ Guardian
Proof of identity (driving licence/ passport/ Aadhaar/ any photo identity)
Proof of residence (driving licence/ passport/ electricity bill/ telephone bill)
Student/ co-borrower/ guarantor’s bank account statement for last six months
IT return/ IT assessment order, of previous two years of parent/ guardian/ other co-borrower (if IT Payee)
Brief statement of assets & liabilities of parent/ guardian/ other co-borrower
Proof of income (i.e. salary slips/ Form 16) of parent/ guardian/ other co-borrower
[“Source-CNBC”]
