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Education Loan

Education is fundamental to the development of human abilities and talent. There is a tremendous demand of a professional tag in today’s competitive world. Unfortunately, there is a simultaneous rise in tuition fee as well. However, now with education becoming the national priority, banking institutions are coming up with scheme for education loans to make professional course study in India and abroad hassle free for students.

Central Bank of India, established in 1911, is one of the largest banks in our country in terms of customers and branch networks with pan India presence of 4,741 branches all of which are engaged in core banking activities. The bank has already completed 105 glorious years of its existence and caters to a diverse clientele by offering banking and financial services including, MSME services, agri banking, deposits, NRI banking, and various loans. Student loan scheme offered by the bank entitles meritorious students to pursue higher education from recognized educational institutions in India or abroad. These are four different types of Central Bank of India education loans:

  1. Cent Vidyarthi
  2. Cent Vidyarthi-Vocational Education and Training
  3. Central Bank’s Special Education Loan for IIMs
  4. Vidyarthi Scheme for IDA members & their children

Cent Vidyarthi

Features of student loan scheme:

  • A Central Bank of India education Loan scheme for deserving candidate for higher studies within India and abroad.
  • The Central Bank of India student education loan is available only for students of Indian nationality.
  • The candidates should have got admission to any course for higher education in recognized educational institutions in India or overseas through Merit Based Selection or Entrance Test post completion of higher secondary.
  • For admission secured on the marks and there is no entrance test/merit based selection process. A minimum achievement of 50% marks in the qualifying examination is mandatory to avail this Central Bank of India student scheme.
  • The maximum loan amount for studies in Indian institution is Rs. 10 lakhs.
  • The maximum amount of education loan for overseas education is Rs. 20 lakhs.
  • The maximum amount cap is fixed as per the regulation of Government of India and RBI.
  • In case of 100% collateral security against the loan amount there is no maximum ceiling.
  • Interest concession of 1% can be offered on loan during the period of course, provided interest is paid during the study tenure and succeeding moratorium period earlier to commencement of repayment.
  • Interest is computed on simple interest during Repayment Holiday or moratorium Period.
  • Compounded Interest will be calculated from the due date of 1st instalment on monthly rests.
  • The loan amount is paid directly to college in appropriate cases.
  • The loan disbursement is made available to the borrowers post submission of original receipts & other satisfactory evidences.
  • Repayment period starts after 12 months of course completion or 6 months post securing any job, whichever is earlier.
  • The repayment period can be stretched up to Maximum 10 years for loan amount up to Rs. 7.50 lakhs.
  • For Central Bank of India education loans beyond Rs. 7.50 lakh, the repayment period can be offered up to maximum 15 years.
  • The loan is repaid on EMI basis.
  • A life insurance policy is mandatory for the student borrowers availing Central Bank of India Educational Loan.
  • The insurance sum assured and policy tenure should be equivalent to loan amount and tenure of loan including moratorium period and repayment period.
  • The insurance should be assigned in the bank’s favour.
  • Nil Processing fee or upfront charges are levied on Central Bank of India education loans for studies within India under the scheme.
  • For studies overseas charge of Rs. 500/- for loan amount till Rs. 10 lakh and Rs. 1,000/- for loan amount above Rs. 10 lakh is charged while processing the applications. However, the same is refunded back when loan is availed by the borrower.
  1. Eligible Expenses to be covered under Central Bank of India education loan:
  1. College/ school and hostel Fee
  2. Fees payable as Examination/ Laboratory/ Library fee
  3. Relevant Travel expenses including passage money required for studies overseas
  4. Expenses towards Insurance premium applicable in case of student borrower.
  5. Other deposits such as Caution deposit or any other refundable deposit should be duly supported by the Institution receipts or bills.
  6. Cost towards the purchase of books/ uniforms and equipment's or instruments.
  7. Other relevant expenses required for course completion such as study tours or project/thesis work etc.
  8. Scholarships and fee waiver etc. are taken into account while sanctioning the loan.
  1. Margin

Amount

Studies In India

Studies in overseas

Up to Rs. 4 lakh

Nil

Nil

More than Rs. 4 lakh

5 %

15%

  1. Security

Amount

Joint Borrowers

Security/Collateral

Income assignment

Up to Rs. 4 lakh

Parents/Guardians

No

Yes, Student borrowers needs to assign future income for the payment of instalments

Above Rs. 4 lakh to Rs. 7.5 lakh

Parents/Guardians

Suitable / acceptable third party guarantee

Yes, Student borrowers needs to assign future income for the payment of instalments

Above Rs. 7.5lakh

Parents/Guardians

Tangible collateral security with appropriate value

Yes, Student borrowers needs to assign future income for the payment of instalments

2. Cent Vidyarthi Scheme for Vocational Education & Training.

  • A financial assistance scheme for Vocational Education and Training to such deserving candidates who have achieved the minimum educational qualification as per the prerequisites of the institution / organization offering the course.
  • The candidate should be a resident Indian National.
  • The loan for vocational education scheme is available for courses conducted by either Union or state Ministry / Department or Organization affiliated to the Government or a company or society supported by National Skill Development Corporation or State Skill Missions & Corporations,
  • The vocational education and training course should provide students with a degree / diploma or certificate etc. issued by a Government organizations or any other affiliated bodies
  • No explicit restriction on the minimum age for the loan eligibility. However, for minor students, the parent will have to provide all necessary documents for the processing of vocational education loan and vocational training loan.
  • The bank will further obtain a ratification letter from the student post attaining majority.

Eligible Expenses

  1. College/ school and Hostel fee
  2. Fees payable as Examination / Laboratory / Library fee
  3. Relevant Travel expenses including passage money required for studies overseas
  4. Expenses towards Insurance premium applicable in case of student borrower
  5. Other deposits such as Caution deposit or any other refundable deposit should be duly supported by the Institution receipts or bills
  6. Cost towards the purchase of books/ uniforms and equipment's or instruments
  7. Other relevant expense required course completion such as study tours or project / thesis work etc.
  8. Scholarships and fee waiver etc. are taken into account while sanctioning the loan

Quantum of finance

Nil

Margin

Amount

Studies In India

Studies in overseas

Up to Rs. 4 lakh

Nil

Nil

More than Rs. 4 lakh

Nil

Nil

Loan Repayment

  1. The Loan is repaid in the form of Equated Monthly Instalment
  2. The Repayment will start post the moratorium period is over.
  3. The moratorium period is 6 months post completion of courses having duration up to1 year.
  4. The moratorium period is 12 months post completion of courses having duration more than 1 year.

Loan Amount

Repayment Tenure

Up to Rs. 50,000/-

Max. 2 Years

Rs. 50,000/- to Rs. 100,000/-

2 years to 5 years

Above Rs. 100,000/-

3 years to 7 years.

3. Central Bank’s Special Education Loan to IIM Students

  • A special Central Bank of India education loan initiative for those students who have secured admission in the reputed courses offered by Indian Institute of Management.
  • The student loan scheme covers 4 more reputed institutes apart from IIMs.
  • Available to students who have secured admission through the Common Admission Test to IIMs for 2 year full time management course.
  •  The Central Bank of India student loan scheme is also pertinent to students enrolled under full time management course by qualifying XAT/CAT in 4 other reputed institutes.
  •  This Central Bank of India student loan scheme is not available for any part-time or distance learning courses or 1 year courses.
  • The maximum loan amount is Rs. 20 lakh. However higher amount may be sanctioned subject to bank’s discretion and 100% tangible liquid collateral equivalent to the loan amount.
  • Zero margin percentage is applicable on this loan scheme.
  • There is no requirement of collateral Security or third party guarantee for loan amounts up to Rs. 20 lakhs.
  • However assignment of future income is required and the salary of the student needs to be credited in the account maintained with Central Bank branch.
  • A life insurance policy is mandatory for the student borrowers availing this Central Bank of India educational Loan.
  • The insurance sum assured and policy tenure should be equivalent to loan amount loan term including moratorium period and repayment period.
  • The insurance should be assigned in the bank’s favour.
  • Nil Processing fee or upfront charges are levied on education loans for studies within India under the scheme.

Eligible Expenses

  1. College / school and hostel Fee of the educational institutions
  2. Fees payable as Examination / Laboratory / Library fee
  3. Relevant Travel expenses including passage money required for studies overseas
  4. Expenses towards Insurance premium applicable in case of student borrower
  5. Other deposits such as Caution deposit or any other refundable deposit should be duly supported by the Institution receipts or bills
  6. Cost towards the purchase of books / uniforms and equipments or instruments
  7. Other relevant expense required for course completion such as study tours or project / thesis work etc.
  8. Scholarships and fee waiver etc. are taken into account while sanctioning the loan

The Central Bank of India student education loan is available to below mentioned institutes,

1

IIM, Ahmedabad, Gujarat

2

IIM, Bangalore, Karnataka

3

IIM, Kolkata, West Bengal

4

IIM, Indore, Madhya Pradesh

5

IIM, Kashipur, Uttarakhand

6

IIM, Kozhikode, Kerala

7

IIM, Lucknow, Utter Pradesh

8

IIM, Raipur, Chhattisgarh

9

IIM, Ranchi, Jharkhand

10

IIM, Rohtak, Haryana

11

IIM, Shillong, Meghalaya

12

IIM, Trichhy, Tamil Nadu

13

IIM, Udaipur, Rajasthan

 

Other 4 Reputed Institutions

1

XLRI, Jamshedpur

2

XIMB, Bhubaneswar

3

SPJMR, Mumbai

4

MDI, Gurgaon

4. Cent Vidyarthi (IDA members & their children)

  • Central Bank offers a special educational loan scheme to the IDA members and their ward for pursuing higher studies, in India or Abroad.
  • The student loan scheme is exclusively available for certified members of IDA and their children who are Indian national and have secured admission in courses either through entrance examination or merit based selection process.
  • The original and photocopy of the membership certificate is required with loan application. Post verification, the original certificate shall be returned.

Eligible Expenses

  1. College / school and Hostel fee
  2. Fees payable as Examination / Laboratory / Library fee
  3. Relevant Travel expenses including passage money required for studies overseas
  4. Expenses towards Insurance premium applicable in case of student borrower
  5. Other deposits such as Caution deposit or any other refundable deposit should be duly supported by the Institution receipts or bills
  6. Cost towards the purchase of books / uniforms and equipments or instruments.
  7. Other relevant expense required course completion such as study tours or project / thesis work etc.
  8. Scholarships and fee waiver, etc. are taken into account while sanctioning the loan.

Loan amount

  1. Maximum loan amount is Rs. 10 lakhs for studies in India and Rs. 20 lakhs for studies overseas.

Margin

Amount

Studies In India

Studies in overseas

Up to Rs. 4 lakh

Nil

Nil

More than Rs. 4 lakh

5%

15%

Security

Amount

IDA Members

Children of IDA member

Up to Rs. 4 lakh

  1. No Collateral
  2. IDA member needs to assign future income for the loan repayment.

 

  1. No Collateral
  2. Co-obligation from IDA member
  3. Assignment future income of the student for the loan repayment.

 

Above Rs. 4 lakh to Rs. 7.5 lakh

  1. Suitable/ acceptable third party guarantee.
  1. Suitable/ acceptable third party guarantee.
  2. Co-obligation from IDA member
  3. Assignment future income of the student for the loan repayment

Above Rs. 7.5 lakh

  1. Tangible collateral security with appropriate value.

 

  1. Tangible collateral security with appropriate value.
  2. Co-obligation from IDA member
  3. Assignment future income of the student for the loan repayment

 

Central Scheme of Interest Subsidy on student loan scheme to students belonging to economically weaker sections of society:

This Central Scheme of Interest Subsidy has been announced by the Ministry of Human Resource and Development for granting interest on education loans to students for professional and technical course study in India under IBA model education loan scheme. The scheme is meant for students from economically weaker sections of society whose annual parental income is less than or up to Rs. 4.50 lakh per annum. The scheme is applicable from the academic year 2009-10 onwards.

  • Applicability of subsidy scheme: This subsidy scheme available on Central Bank of India education loan is applicable only for study programmes from reputed educational institutions or some professional degree courses in India. The interest subsidy is linked with the educational loan plan of IBA and is limited to student who are enrolled in job oriented courses from the educational institutions established by an act of Parliament or recognised by other statutory bodies or is affiliated to state or central government.
  • Criteria for interest subsidy scheme: The advantage of this scheme would be restricted only to students who belong to economically weaker sections of the society with an annual gross family income with upper limit of Rs. 4.5 lakh annually from every source.

Eligibility: Listed below are the criteria for education loan eligibility in Central Bank of India:

  • The student must be an Indian national to avail this loan for course offered by the bank
  • The student must have secured admission to a higher education course in alleged educational institutions in India or overseas through any kind of entrance test held by the institution or has been selected on basis of merit.
  • Student must be able to produce all the educational documents and other loan documents as demanded by the bank

Rate of Interest

  1. The interest rate for male students is MCLR +2%, whereas the interest rate for female borrower or candidates from SC / ST categories is MCLR +1.50%.
  1. Interest concession of 1% can be offered on loan during the period of course, provided interest is paid during the study tenure and succeeding moratorium period earlier to commencement of repayment.
  2. Interest is computed on the basis of simple interest during Repayment Holiday or moratorium Period.
  3. Compounded Interest will be calculated from the due date of 1st instalment on monthly rests.
  4. The loan amount is paid directly to college in appropriate cases.
  5. The loan disbursement is made available to the borrowers post submission of original receipts & other satisfactory evidences.

Applying for education loan from Central Bank of India:

Now you can also apply online for student loan scheme from the bank. The old conventional method of applying from the branch is always available. It is the choice of the customer to choose whether to apply for loan online or from the branch directly. As a customer, all you have to do is  log on to ww.paisabazaar.com, choose the relevant  tab and fill up a loan application form with all the necessary details and produce all the loan documents asked by the bank for verification. Once the verification process is done and bank is satisfied with the details and documents, your Central Bank of India student loan scheme will be sanctioned.