The Hindu : Andhra Pradesh News : Insurance cover to go with education loan

Online edition of India's National Newspaper
Friday, Jul 16, 2004

Andhra Pradesh

Andhra Pradesh

Insurance cover to go with education loan

By R. Ravikanth Reddy

HYDERABAD, JULY 15. Educational loan will now come with an insurance cover for students as well as parents. The State Bank group has formulated a plan that will not only help the student complete his/her education without bothering for finances but will also insure the student concerned. Moreover, the premium would be a part of the loan component so as to keep the student hassle-free during the period of study.

The scheme would be available in State Bank of India and its associate banks like the State banks of Hyderabad, Indore, Bikaner and the like. The insurance ranges from a minimum of Rs. 3 lakhs to Rs. 50 lakhs and the new scheme allows the student to increase the insurance coverage of the loan by a maximum of 50 per cent of the total amount. "Another attraction of the loan facility this time is 2 per cent reduction in the interest rate for students scoring more than 60 per cent in their qualifying examination," says A. Sesh Kumar, Chief Manager, State Bank of Hyderabad, Shanthinagar branch.

He says `if anything unfortunate happens' to the student during the course of the study, the family members would get the entire amount of the insurance after deducting the loan amount given till that point of time. However, students have to be in the age group of 18 to 30 years to avail themselves of the loan while parents should be in the age group of 36 to 60 years.

The premium works out to be Rs. 666 per year for Rs. 3 lakhs for an engineering student falling in the age group of 18 to 20 years while it would be a bit more in the higher age group. If girl students utilise the facility a 5 per cent reduction in the base premium would be extended to them. Another attractive component is that bank will calculate interest only on the amount given and not the total loan amount sanctioned.

With the Engineering counselling beginning, the banks see an opportunity to attract students with the new scheme. Mr. Sesh Kumar says that 100 per cent loan amount would be extended. The SBH has also decided to reimburse the first year fee paid by the student within three months. This would be helpful to lots of poor parents, who cannot afford to pay even Rs. 22,000, which is the yearly fee. The loan will not just cover the fee but also the books and hostel bills, if the student utilises the facility.

All that a student needs is the EAMCET rank card, fee particulars, proof of income of the parents and two photographs. The SBH has set up a stall at the EAMCET counselling centre itself to help loan-seekers.

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