Education loans made easy
Educational expenses are increasing these days. Even people with a sound background at times face difficulties in assisting their children pursue their dream-career. Most of the nationalised banks introduced education loan schemes way back in the '70s. But only recently the public has become aware of it. It was the rigid terms and conditions associated with these schemes that made the public hesitant about availing this facility. With a change in the approach of the banks, more and more people are showing interest in dealing with nationalised banks.
"We are more customer-friendly these days. Though we provide other loans such as agricultural loans, housing loans and industrial loans, we always give preference to education loans as part our social obligation," said sources in the Indian Bank.
All the nationalised banks provide loans as per the norms laid down by the Reserve Bank of India (RBI). Invariably these banks give loans for education from higher secondary to doctorate level, but a few banks such as the Bank of Baroda offer the same right from kindergarten. Only Indian nationals are eligible for the same.
The loans will be sanctioned only if the courses are offered by recognised universities and approved by the State or the Central Government. The loan amount is not inclusive of capitation fee, donation or external coaching fee. A few banks offer loans even for part-time courses and diplomas as well. Funds are granted for computer courses conducted by DOEAC Society, an autonomous body of the Department of Information Technology, Government of India. Only bright students who excel in the qualifying examinations will be preferred for such loans. Once the application is submitted along with relevant documents such as bonafide certificate from the concerned institution, proof for fee structure and proof of marks, the loan will be sanctioned within a few days.
The amount provided for domestic loans fall under two categories; up to Rs. 4 lakhs and Rs. 4 to 7.5 lakhs.
No bank insists on security when the ceiling amount is Rs. 4 lakhs and no margin is demanded.
Within this limit almost all the banks' rate of interest ranges from 10.75 to 11.5 per cent. There is a slight increase in the interest rate for amount above Rs. 4 lakhs, which ranges from 10.5 to 12.25 per cent. The banks demand third party guarantee in addition to securities for the amount sanctioned. The margin is 5 per cent for the loan.
Overseas education loans
The maximum amount provided for education abroad is usually Rs. 15 lakhs, but the Indian Bank offers up to Rs. 25 lakhs. The interest rate ranges between 10.5 and 12.25 per cent with a margin of 15 per cent.
The repayment starts once the holiday period (one year after the completion of the course or six months after securing a job, whichever is the earliest) is over. Almost all the banks provide five to seven years for repayment. The debts can be repaid on a monthly basis.
Mini K, Sowmya B, Safa Abdul
Razak and Janani Rajeshwari S.
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Education Plus
Karnataka
Chennai
Coimbatore
Hyderabad
Madurai
Tiruchirapalli
Vijayawada
Visakhapatnam
