Education has always played a crucial role in moulding a generation. It lays the foundation for creating a new future for a youngster and thereby helps secure his or her life. To meet with the rising cost of education, Abhyudaya Bank offers schemes for education loans to suit every need. Be it pursuing higher education from recognized educational institution in India or overseas, Abhyudaya Bank offers them all.
Abhyudaya Bank is an urban muti-state bank based in Maharashtra, India and has been in operation as a cooperative bank since 1965. Abhyudaya Co-operative Bank Limited offers two types of student loan scheme to students. One loan is for higher studies taken in India or abroad while the other one is for Vocational courses and training. Let us discuss both the schemes in detail:
- The Abhyudaya Bank education loan can be taken to fund studies undertaken either in India or abroad
- The eligible courses for Indian studies include approved courses which result in graduation, post-graduation degree or diploma courses which are conducted by universities or colleges recognized by UGC, Government, AICTE, AIBMS, ICMR, etc., specialized courses like CA, CS, CFA, etc., courses conducted by known institutes like IIMs, IISc, NITs, IITs, NIFT, NID, XLRI, etc., a regular degree or a diploma course in fields like aeronautical, pilot training, shipping, etc. if the courses are approved by the Director General of Civil Aviation or Shipping and the course is taken in India, approved courses in Indian which are offered by reputed foreign institutes.
- For studying abroad, the courses which are covered under the scope of the Abhyudaya Bank education loan include job-oriented professional or technical courses in graduation which are offered by reputed educational institutions in India or abroad, post-graduation courses like MBA, ACA, MS, etc., courses conducted by known institutes like CIMA, London or CPA, USA, degree or diploma courses in specialized fields of aeronautical, pilot training, shipping, etc. which are recognized by competent authorities in India or abroad and are conducted with a purpose of granting jobs in India or abroad.
- The expenses which the loan for courses covers include the college, school or hostel fee, any examination, laboratory or library fee, related travel expenses or passage money required for studying abroad, cost of books, equipment, instruments or uniforms, any insurance premium for the student borrower, any sort of Caution Deposit, Refundable Deposit, Building Fund, etc. if it is supported by the institute’s bills and receipts, cost of the computer which may be required to complete the course, other course related expenses like undertaking study tours or thesis work, etc.
- For studying in India, the maximum allowable limit of Abhyudaya Bank student scheme is Rs.10 lakh and for studying abroad, the loan amount is extended to Rs. 20 lakh
- There is a repayment holiday when the Abhyudaya Bank education loan is not required to be serviced. This period is called the moratorium period and is equivalent to the course year plus one year or 6 months after getting a job, whichever is earlier.
- The student loan scheme if taken up to the value of Rs. 7.5 lakh should be repaid within 10 years and loans above this value should be repaid within a maximum period of 15 years. However, the total repayment period of the loan including the moratorium period must not exceed 20 years.
- There will be a concession of 1% in the interest on education loans chargeable if the student services the interest part of the loan during the moratorium period
- For loan amount up to Rs.4 lakh, the bank does not require any margin. For loans higher of this value, 5% margin for Indian education and 15% margin for foreign education is required
- Regular membership would be required for the applicant and the co-applicant and the charge would be 1% of the amount of education loan sanctioned with a minimum of Rs. 1,000 and a maximum of Rs. 2,500. sureties can make do with nominal membership of Rs. 100
- For loan amount up to Rs.4 lakh, parents would act as co-borrowers. Loans above this amount would require a security. Loans above Rs. 4 lakh and up to Rs. 7.5 lakh would require an additional collateral security in the form of two outside sureties acceptable to the bank. For loans higher than Rs. 7.5 lakh, the security would be a tangible collateral security of a value equal to the student loan scheme, two outside sureties and the assignment of future income of the student to the bank. Parents would have to act as co-borrowers in all cases above.
- There is no service charge on this Abhyudaya Bank education loan
There is no prepayment penalty for prepaying the student loan scheme
- Expenses covered for Abhyudaya Bank student loan scheme:
- Tuition fee payable to private colleges, central government educational institutions, institutes affiliated to state government etc.
- Passage expenses for studies abroad / travel expenses
- Insurance premium for student borrower, if applicable
- Caution deposits, refundable deposits supported by institutions bills / receipts and building funds
- Cost incurred in purchase of books, equipment, uniforms, instruments, etc.
- Cost of acquiring computers, tablets, etc. at acceptable cost, if required for completion of the course
Any other expense required to complete the course such as study tours, project tours, thesis work, etc.
The student should comply with the following eligibility criteria to successfully avail the Abhyudaya Bank education loan:
- He or she should be an Indian National
The student should have obtained admission in a college or a university based on a merit-based selection process or examination.
- Rate of interest :
The rate of interest charged on the Abhyudaya Bank education loans depend on the gender of the student and the amount of loan availed:
For loan amount up to Rs. 10 lakh charge an interest rate of 12.50% per annum and loans above Rs. 10 lakh charge an interest rate of 13.50% per annum.
Abhyudaya Bank student education loan of up to Rs. 10 lakh would charge an interest rate of 12.00% and loans of higher values would charge an interest rate of 12.50% per annum
Abhyudaya Bank Vocational Education and training Loan
- Features of vocational education and training loan:
- This loan for vocational education from Abhyudaya Bank is granted for vocational education and training courses or skill development courses
- The course could be of any duration ranging from 6 months to 3 years
- The course should be conducted by a recognized State or Central Government educational institute, any statutory or technical body or any training department of the Government. Courses conducted by IITs, ITCs and Polytechnic institutes of the country come under this eligibility purview.
- The vocational education and training course related expenses which are considered for the loan for vocational education include the tuition or the course fee as fixed by the Government or any authority appointed by the Government, any examination, laboratory or library fee, caution deposit, cost of purchase of books, equipment, instruments, any other reasonable course related expenses.
- If the course is taken in a private institute, the course fee payable by the Abhyudaya Bank loan for vocational education and training would be 125% of the course fee stipulated by the Government.
- Vocational education and training courses having durations up to a year could avail a maximum of Rs. 50,000 as loan while courses whose durations are higher can avail a maximum loan of Rs. 1.5 lakh
- This maximum limit of loan can be increased to Rs. 75,000 and Rs.2 lakh respectively as per the discretion of the bank
- The moratorium period under this loan scheme would depend on the course duration. For courses up to 1 year, the period would be 6 months post course completion while for courses above 1 year, the period would be 12 months post the course completion of 6 months post getting a job, whichever is earlier
- The repayment tenure of loan granted for courses up to 1 year is 3 years to 5 years while courses of higher durations would result in a repayment period of 5 years to 7 years
- Margin is not required to be maintained for the vocational training loan and vocational education loan
- A regular membership would be required for the applicant and co-applicant of the Abhyudaya Bank student education loan which would be 1% of the loan taken or Rs. 2,500 whichever is lower. The sureties would have to pay a nominal membership of Rs. 100
- The loan would require the parents of the student to act as co-borrowers or joint applicants of the loan
- The vocational education and training loan has no service charges required to be paid
Prepayment can be done anytime without any penalty.
- Expenses considered for Abhyudaya Bank loan for vocational education and training:
- Course fee / tution fee which is fixed by government or other authorities as appointed by the government
- Examination fee / laboratory fee / library fee
- Caution deposit
- Purchase of books, instruments and equipments related with the course
- Any other feasible expenditure found necessary by the bank for completion of the course
- In respect to tuition fee of the private institutes, the expense to be limited is up to 125% of the fees prescribed by the government for similar education programmes, if they are not fixed by government or authorities appointed by the government
Maximum amount for vocational education and training loan: Only need based finances will be considered under this Abhyudaya Bank student loan scheme subject to the following ceilings:
- For courses up to 1 year- Rs. 50,000
- For courses of duration above 1 year - Rs. 1,50,000
Bank at its vigilance shall consider the amount Rs. 75, 000 for courses with duration up to 1 year and limits up to Rs. 2 lakh for courses with span above 1 year for specific courses offered by good and reputed educational institutions having regard to the nature of such programmes and employability considering the eligibility of loan amount.
The following criteria are laid down for Abhyudaya Bank’s education loan eligibility:
- The student must be an Indian National
- The student must have passed Class X examinations conducted by the State or Central Boards
- The student must have obtained admission in a Government recognized vocational training course or some professional course study in India which would result in him getting a job.
The parents of the student must act as joint borrower. If the student is married, the spouse, parents or the parents-in-law can act as a joint borrower.
- Rate of Interest
The Vocational Education Loan would charge a 12% rate of interest for boy students and a 12.50% rate of interest for girl students.
Documentation required for Abhyudaya Bank education loan:
The following documents should be submitted for availing an Abhyudaya Bank education loan:
- Latest photograph of the applicant and co-applicants
- A valid Photo identity proof
- A valid Address proof
- PAN Card
- Parents and guardians having regular source of income so that they can pay the monthly interest
- A declaration or an affidavit stating that no other Education Loans have been availed from anywhere else
- An offer letter from the university, college or institution stating the course details and the procedure of admission
- Passport copy for seeking admission abroad
- Latest mark sheets
Every Abhyudaya Bank education loan can be calculated to give the payable instalment through the bank’s EMI calculator facility which calculates the EMIs payable for the Abhyudaya Bank student loan scheme. One would have to provide the loan amount, the repayment tenure and the rate of interest in the required fields and the instalment would be calculated. For example:
- An Abhyudaya Bank education loan for higher education in India taken by a male student for Rs. 10 lakh and repayable within 10 years would attract a rate of 13% and the corresponding EMI would come to Rs. 14,932. If the loan would have been availed by a girl child, the equivalent EMI would have come to Rs. 14,638 at a rate of interest of 12.50%
- If the loan is taken for vocational education to the tune of Rs. 1 lakh and payable in 5 years, the rate of interest for a boy would have been 13% with an EMI of Rs. 2,276. For a girl, the EMI would have reduced to Rs. 2,250 at an interest rate of 12.50%.
- Applying via branch:
Whether it is a loan for higher studies in India or abroad or a loan for vocational studies, the student can apply for the loan through the branches of the bank. The applicant would have to visit the bank’s branch and apply for the loan by filling up a loan application form with all the fundamental details. The banks representatives designated for dealing with all queries related with student loan scheme and processing the Abhyudaya Bank education loans will provide complete assistance to its customers.