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Education Loan

Education is the most important platform for all of us to reach higher goals. Education makes you a better person. It not only helps you to raise your living standard but also contributes to the growth of nation. If the youth of country is literate the nation will eventually grow and flourish. However, the omnipresent hike in tuition fee makes it difficult for students to pursue their dreams. Higher studies from recognized educational institution are becoming expensive making parents and students wonder how to achieve their dreams. However, banking institutions in our country continue to come to the rescue of students. These banks are coming up with scheme for education loans to fund the expense of higher education from educational institutions in India and abroad.

Allahabad Bank is a nationalised bank which was established in 1865. Over the years, the bank has forayed into several areas of banking offerings products and services under various categories like personal loans, corporate banking, social banking, MSME banking and a host of loan options which have enabled it to cater to a diverse clientele. Under its loan category, one of its most popular products is its student loan scheme. This Allahabad Bank education loan has been designed especially to meet the different levels of academic needs of the individual.

Allahabad Bank currently offers three types of Education Loans to students to pursue higher studies either in India or abroad or to complete their school education or to do any vocational courses. The first type of Allahabad Bank education loan offered is for higher studies and the second types of loan offered is designed exclusively for students pursuing vocational courses from premier institutes, third type of loan is given to Parents of the student to complete their school education . However, before you opt for one of these Allahabad Bank education loan, you must be aware of few reasons which makes Allahabad Bank one of the most preferred banks in India:

  • Transparency: Before you become a customer of Allahabad Bank and choose products and services which fulfil all your needs, the bank will guide you through all its policies and guidelines and give you clear and transparent information explaining the features and key benefits of the products and services.
  • Privacy: Your Allahabad Bank student loan scheme application form or any other application is kept private. It is not checked or verified by non-banks representatives and is never disclosed to any other person.
  • Customer first: The primary objective of the bank is to build a trust-based relation with their customers. The bank provides all the information regarding customer’s right and responsibilities. It has a highly proficient and responsible customer care team to deal with all your complaints and grievances and guide you through any difficult or lengthy banking procedure.
 Let us take a detailed look at the type of loans on offer and their respective features.
  1. Loan for Higher studies (Educational loan):
Objective:
Any meritorious student who wants to pursue higher education whether in India or outside India can take financial support with the Allahabad Bank student educational loan. Meritorious student who are under the management quota can also avail this student loan scheme. This is the main objective Allahabad Bank education loan. The education loan eligibility criteria are somewhat similar for each education loan from the bank.

Student Eligibility:
1. To avail a Allahabad Bank student loan scheme, the student must be an Indian Citizen in order to become eligible and should have got admission to the higher education course in a recognized institution either in India or outside India through Entrance exam or merit selection process after completion of HSC (10 plus 2 or equivalent).
2. In case admission is based on the marks scored by the student in the qualifying examination then the cut off marks is 60% for Allahabad Bank student loan scheme.
3. Meritorious student who are under the management quota are also eligible to avail this Allahabad Bank education loan.

Eligible Courses
For studying in India: The following professional course studies in India are eligible for the Allahabad Bank education loans.
1. Approved courses which are conducted by renowned universities or colleges which are recognized either by UGC or Government or AICTE or AIBMS or ICMR, etc., courses leading to graduate or post graduate degree and PG diplomas.
2. Loan for courses are given for academic programmes like CA, CFA, ICWAI, etc.
3. Courses conducted by NIFT, IITs, IIMs, XLRI, IISc, NID etc.
4. Regular Degree or Diploma courses like, shipping, pilot training, Aeronautical etc., which are approved by Director General of Civil Aviation or Shipping. Loan can be taken only if this course is pursued in India.
5. Courses like Teacher training, Nursing courses and B.Ed. are also eligible for Education loan only if Training Institutions area approved either by Central Government or by State Government and such courses must be a Diploma or Degree Course and not to a Certification Course.
6. Reputed foreign universities offering approved courses offered in India are also eligible

For studying Abroad:
Students studying at reputed overseas universities offering job oriented professional / technical courses are eligible for this course.

Post-graduation:
1. If the student wishes to pursue courses like MBA, MS, MCA, etc. he or she is eligible for availing loan.
2. If the student wishes to pursue Courses which are conducted by CPA in USA, CIMA in London, etc. they can take Education loan from Allahabad Bank.
3. Regular Degree or Diploma courses like pilot training, aeronautical, shipping etc., which are approved by Director General of Civil Aviation or Shipping. Loan can be taken only if this course is pursued in India.

Age:
As per Allahabad bank’s policy persons of any age can take student loan scheme for studying if he or she meets all the stated criteria. There is no restriction on age for taking the loan from the bank

Quantum of Finance:
Quantum of loan offered by the bank will be considered taking in to account margins subject to the following ceilings:
If a student wants to study in India – Maximum loan amount that can be taken is Rs.20 lakh. Institutes are graded and loan amount depends upon the grading of the institute.
If student wants to study in Abroad -Maximum loan amount available is up to Rs.50 lakh.

Expenses considered for Loan:
Following are some expenses which are covered under the Allahabad Bank education loan.
1. College fees or hostel rent or fees.
2. Fees relating to Exam or Library or Laboratory
3. Passage money in case of study abroad.
4. Purchasing of books or equipment or uniforms.
5. Purchase of computers, in case it is required for completion of the course.
6. Reimbursement of fee paid at the time of counselling (If the student applies for loan within 60 days of such payment).

Margin:
The bank requires the following margin criteria for issuing the Allahabad Bank student education loan:
1. In case the student takes the loan for amounts up to Rs.4 lakh, then no margin is required by the Bank.
2. In case the loan is taken for more than Rs.4 lakh, then:
For studying in India: 5% of the loan amount
For studying outside India: 15% of the loan amount.

Rate of Interest:
 (MCLR- 9.55%)
For studying in India For studying in abroad
For IIMs and IITs MCLR Loan amount up to Rs.4 lakhs MCLR+2.00%
For NITs MCLR+ 1.50 Loan amount from 4 lakhs to Rs.7.50 lakhs MCLR+2.00%
other institutes MCLR+2.00 Loan amount above Rs.7.50 lakhs MCLR+ 1.50
 
Simple interest is charged during the course & moratorium period. For girl students the bank provides 0.50% rebate in Rate of Interest to encourage Girls’ education. Bank also gives 1.00% concession during moratorium period if interest is serviced during the moratorium period.

Moratorium:
Moratorium period as per banks policy and under this student loan scheme is earlier of the course period i.e. time period till the course continues or period till which study continues, plus one year; or six months after getting Job.

Repayment Period:
As per the Allahabad Bank education loans following are the repayment period of loan, i.e. time by which the loan should be repaid:
In case the amount of education loan is taken up to Rs.7.5 lakh – up to 10 years,

Which means if the loan is taken by an applicant which is less than or equal to Rs.7.5 lakh then the loan amount plus interest should be paid within 10 years from the date of loan taken.

In case, loan amount is more than Rs.7.5 lakh – up to 15 years

That means if the loan is taken by an applicant which is more than Rs.7.5 lakh then the loan amount plus interest should be paid within 15 years from the date of loan taken.

The interest which is accrued during the repayment holiday period should be added to the Principal Amount. Accordingly, Equated Monthly Instalments (EMI) should be fixed.

Bank does not charge any prepayment penalty if prepayment of loan is made at any time during the repayment period.

Processing Fee/ Mortgage Charges:
In case of Processing Fees/ Documentation Charge:
There are no processing fees for the student who studies in India.

Mortgage Charges:
The Student/Parent or Guardian will have to bear the Actual expenses, if any.
  1. AB Vocational Course Loan:
Objective:
  • Vocational education and training courses help to prepare for a skill based career for different categories such as technicians, craftsmen, etc. They also help you in attaining a professional career in the fields of medicine, accountancy, engineering, pharmacy, law and nursing.
  • These vocational education and training courses are different from fully fledged academic courses and are attached to specific occupation and trade.
  • Vocational education loan and vocational training loan is given to deserving candidate so that they can acquire the expertise in a specific technology, set of procedures or vocation of their choice.
  • The trend of vocational education and training loan has been adopted by all the banks in India after the Indian Banks Association came up with a modal scheme of loan for vocational education for students aspiring to take up vocational education and training courses.
Eligibility: Listed below are the eligibility criteria for an Allahabad Bank loan for vocational education and training:
1. The student availing the Allahabad Bank vocational education and training loan should be a resident of India.
2. The student should have secured admission in a certificate / diploma / degree course run or supported either by Ministry/Department/ National Skill Development Corporation supported organisations or State Skill Corporations / State Skill Missions.
Course duration:
An applicant can take the loan for vocational education for a minimum period of 2 months and a maximum period of 3 years.
Age:
As per Allahabad Bank policy person of any age can take loan for vocational education for studying if he or she meets all the stated criteria. There is no restriction on age for taking loan under Allahabad bank.
Quantum of Finance:
1. A maximum loan of Rs. 20,000 can be taken if the course duration is upto 3 months.
2. A maximum Loan of Rs. 50,000 can be taken if the course duration is more than 3 months but upto 6 months.
3. A maximum Loan of Rs. 75,000 can be taken if the course duration is more than 6 months but upto 12 months.
4. A maximum Loan of Rs. 1,50,000 can be taken if the course duration is more than 12 months.
Margin and Processing fees:
There is no margin and processing fee under this vocational education and training scheme.
Moratorium Period:
Maximum of 12 months of moratorium period is given after completion of the course depending the period of course and tenure of loan.
Repayment Period:
As per the Education loan provided by Allahabad bank following are the repayment period of loan, i.e. time by which the loan should be repaid:
In case the loan is taken for up to Rs. 50,000 – up to 2 years,
In case the loan amount is more than Rs. 50,000 but less than 1 lakh – 2 to 5 years
In case the loan amount is more than Rs. 1 lakh – 3 to 7 years
Security
Future income of the student and obligations of the parents or guardians is required as a security           
  1. Gyan Dipika Scheme:
Target group:
This student loan scheme is for the parents of that student who are in the course of completing their school education, i.e. this scheme provides loans for the students of classes Nursery to Class 12.

Student Eligibility:
The student must be an Indian Citizen in order to become eligible and should have secured admission to courses from Nursery to 12th Standard which is identified/ approved by the respective Zonal Office of the Bank to a Known and Affiliated School, Junior School, High School or College (including State Board /ICSE/ CBSE). They must also produce all the educational documents as required by the bank.
 
Purpose:
Followings are the purposes for which loan amount can be utilized:
1. Admission fees which includes building fund, caution money, refundable or maintenance fees and any other deposits, etc.
2. Annual fees which include, hostel charges examination fees, development fees library or laboratory fees, computer, equipment, uniforms, etc.
3. Tuition Fees has to be paid in advance on yearly, quarterly and half-yearly basis.

Loan Criteria:
Following are the criteria laid down by the Bank for issuing the loan:
1. The loan is issued depending upon the repaying capacity of the parents,
2. Maximum loan amount sanctioned under this scheme as per the bank’s policy is Rs. 1 lakh which includes all kinds of expenses or any of the expenses under the Allahabad Bank student loan scheme.
3. After paying off the EMI of the loan amount, the net income of the guardians or parents should be more than 40% of the gross income,
5. There will be no margin and processing fee for the said scheme.

Rate of Interest:
Rate of Interest for the proposed scheme will be MCLR + 4.00%. (MCLR is 9.55%)

Repayment Period:
A Post Dated Cheque should be used for repaying the loan. Loan should be repaid in 36 EMIs.

Documents required for student loan scheme: Though every bank has their own requirements for loan documents to be submitted along with student loan application form. However, most of the banks will ask for listed below loan documents from student applying for an Allahabad Bank education loan:
  • Admission letter from the educational institution in which you have got admission giving details of year wise fee, boarding and lodging expense and letter conforming scholarship if you have been accorded any.
  • Attested copies of age proof, residence proof and birth date.
  • Self attested passport size photograph of applicant, co applicants and guarantor.
  • Copy of degree certificates and mark sheet of previous qualified course
  • Income proof/latest tax return of co applicants, parents, guarantor (if any).
  • Details of collateral security along with government approved valuation certificate (if any).
  • Bank account statement of applicant, copy of passport and visa in case of abroad.

EMI Calculator
The bank provides the facility of calculating the EMI online by specifying the loan amount, the tenure opted and the applicable rate of interest. The calculated EMI will be displayed to the applicant who can proceed to apply for the loan or decide on affordability.

Applying for education loan online

In keeping with the rising trend of online transactions, the bank offers Education Loan application form online through its website. The process is simple:

Visit Paisabazaar.com and choose the Allahabad loan scheme which suits to your requirements and click “apply” after filling up all the necessary details. The customer does not have to engage in useless hassles to avail a loan. He/she can also visit bank’s official website or nearest bank branch to do the same. The applicant needs to provide his personal details like name, age, address, occupation, income, etc. which the bank uses to match to the eligibility criteria laid down for availing Education Loans.

  • Checking Loan Status

Even after opting for a loan, it takes some time for the loan to be granted and money to be credited in the customer’s account. Meanwhile if the customer wants to check the status of the loan application, the bank also helps in providing the relevant facility. For checking the loan status, the applicant simply needs to visit the bank’s website and on the Loan Application page, there is a ‘I want to check my Application Status’ option which when clicked opens a new page. The Application details are to be provided in the status page and the loan status will be displayed.