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Education Loan

Dhanlaxmi Bank offers Education Loan to students so that they might pursue higher education without having to worry about the necessary finance requirement. A loan is provided to students to pursue higher studies either in India or abroad as the case may be. The Dhanlaxmi Bank education loan is one of the best schemes for students to pursue their dreams of higher education from the best educational institutions in India and abroad without any financial obstacle. The student loan scheme also focuses on customising their services and personalising their relationship with the customers. Before, we dive down into what Dhanlaxmi Bank offers for students; let us try to understand why an education loan from Dhanlaxmi bank makes sense.

Let us take a look at the features and benefits of Dhanlaxmi Bank Education Loan Scheme offered by the bank:

Education Loan – a loan granted to individuals for pursuing higher education either in India or abroad. The features of the loan are as follows:

  • The loan covers expenses for admission or tuition fees payable to school or college, examination / library / laboratory fee, hostel fees and boarding expenses, purchase of books /equipment / instruments / uniforms or study material, personal computers or laptops required to complete the course, caution deposit or building fund or refundable deposits supported by institution bills or receipts up to a maximum of 10% of the total tuition fees, insurance premium for student borrower,
  • For studies abroad, expenses on air travel, incidental charges, purchase of outfits like clothing and other equipment are also covered under the scope of loan
  • For loans up to Rs. 4 lakh, there is no requirement of pledging a collateral security. But for loans above Rs. 4 lakh, security is required by the bank. For loans above Rs. 4 lakhs, collateral security in the form of a satisfactory guarantee is accepted. Approved shares or insurance policies with surrender value, National Savings Certificates (NSCs), IVP, Bank Deposits, etc. or collateral security like land or building which should be equivalent to the loan amount is accepted as collateral security by the bank.
  • Courses opted for in India should be for a maximum duration of 5 years and courses opted abroad should have a maximum duration of 3 years to be eligible for the loan. A loan is not granted for courses whose durations increase the maximum specified limit as prescribed by the bank.
  • The repayment holiday or the moratorium period applicable for Education Loan is the total duration of the course plus 6 months or getting a job whichever is earlier. After the moratorium period, the repayment shall start and the borrower would be required to pay off the regular Equated Monthly Instalments payable under the loan.
  • There is no processing fee which is required to be paid upfront for availing of the loan and the loan is sanctioned easily without the extra expense or charge.
  • Dhanlaxmi Bank vocational education and training started recently after the Indian Bank’s Association came up with model loan scheme for vocational education and training.

For studying the India, the following are the education loan eligibility criteria that should be met by the student:

  • The student should be of Indian Nationality whether he is a minor or major at the time of loan application.
  • Parents can also act as co-borrowers and apply for the loan with the student to make the repayment easier through their existing source of income
  • The eligible courses for which loan can be availed include graduation or post-graduation degree or diploma courses in medical, engineering, agriculture, veterinary, dental science, pharmacy, computer science, etc. P.G courses in science, arts, management and general commerce from recognised universities and colleges and a post-graduate diploma in computer application from recognised colleges having a good reputation like APTECH, NIIT, SSI, BIOTECH etc.
  • The applicant or the student should have passed the qualifying examination securing a position eligible for admission to the course opted for studying.

For studying abroad, the following criteria should be met by the student:

  • The student should be an Indian National over 18 years of age.
  • The applicant or the student should produce a copy of the Result of the qualifying or mandatory examination such as TOEFL, GRE, SAT, AGRE, GMAT, etc. along with a copy of the valid passport, proof of admission to the college or university and a copy of the Visa or Form I-20.
  • The eligible courses for which loan can be availed for foreign education include undergraduate courses in biological and natural sciences, computer sciences, engineering, post-graduate courses in the above disciplines and business administration. The applicants are required to submit a brief report on the prospect of the course.

Rate of interest
An interest rate on education loan is slightly higher than a home loan but lower than a personal loan. Interest on education loan is generally fixed, though some banks do offer a floating interest rate on the education loan amount. The rate of interest for the Dhanlaxmi Bank Education Loan scheme is one year MCLR + 3.75% at a floating rate. The current MCLR is 10.35% which results in a floating rate of 10.35% + 3.75% = 15.10%.

Education Loan Rates of Interest: Which rate works better - fixed or floating?

Many banks do not offer absolute fixed interest rate, i.e. when the interest remains fixed during the tenure of the loan. They generally offer a fixed rate loan with a reset clause. This indicates that bank will have the right to revise the interest rate after 2 or 3 years or whenever they feel the necessity to increase interest rate. These details vary from bank to bank. So, remember to check the details and make sure that you take right decision between fixed and floating interest rate loans. Also, the decision between a fixed and floating interest rate depends upon the risk appetite of a loan taker. If you are totally risk hostile and do not want to face the prospect of your repayment tenure shooting up in the event of an upward movement of interest rates, then opt for genuine fixed rate education loans. They may charge a slightly higher interest rate than the education loan that offers a mix of both, but you will have better control of the outgo and your overall expenses. Dhanlaxmi Bank education loans are among the best in the market and provide the most customer-friendly interest rates.

Fees and Charges

The following fees and charges are applicable under the Education Loan scheme offered by Dhanlaxmi Bank:



No Due Certificate / No Objection Certificate (NOC)


Duplicate No due Certificate or NOC


Capability Certificate

Rs.250 for studies abroad

Charges for late payment of EMIs

24% p.a. on the outstanding amount from the date of default

Cheque Swapping Charges

Rs.500 per instance

Loan Re-booking Charges or Loan Re-scheduling charges

Not applicable

Loan Cancellation Charges

Not applicable

Cheque bounce Charges

Rs.500 per cheque

Legal / Incidental Charges

At actuals


Documents required

The following loan documents are required to be submitted at the time of applying for the loan:

  • Photocopies of all certificates from the previous examinations from SSC onwards.
  • To ensure that the loan amount is not being used for unnecessary purposes, a certificate from the recognised college or university must be issued after every year stating that the student is continuing his/her education with the college.

Why choose an education loan?

An education loan is the most convenient way of supporting a student’s career. With the scheme for education loans, you can now easily fund the expenses of educational institutions including tuition fees, boarding and lodging, travelling expense and insurance premium, etc. The versatility and advantages of education loan is discussed below:

  • Education is expensive: The cost of education is growing at a fast pace as institutions try to offer the best education possible for students to compete and succeed in the knowledge economy.A comprehensive amount of education loan frees you from the task of accumulating enough money to fund your children’s education. A Dhanlaxmi Bank student education loan works accordingly to help you make a smarter decision and give your children the best education possible in this competitive world.
  • Functional help for different fees: The expenses incurred due to a standard education programme are many, especially if the course is from recognised educational institutions. The list of expenses includes caution deposits, building deposits, library fee, lab fees, and maintenance fee, among others. With the Dhanlaxmi Bank student scheme, the individual aspect of the course can be better addressed as it also provides loan for courses without the risk of running out of money.
  • Easily available and accessible to all: RBI guidelines have classified student loan schemes as a part of priority sector lending for banks. The education loan now is one of the top products among the many products and solutions offered by the bank. Conforming to some basic requirements and your ability to repay the loan amount is all that it takes to get a loan for your child’s education.
  • Timely and stress-free payouts: A good banking system with an excellent educational loan system offers timely help when it comes to building the crucial foundation of education that promises a successful life. An education loan removes the worry that accompanies the need to build up the requisite amount for your children’s education. It puts you at ease. It also ensures all payments are done on time. You do not have to worry about semester fees, annual fees, exam fees, or the many other fees that need to be paid at certain intervals. The bank releases the payments on time without you having to worry at all.

Dhanlaxmi Bank introduced a scheme for educational loan with the purpose of providing financial assistance to students and enabling them to pay their admission fee and take care of other educational expenses.

Education loan: Some details to check and ask before you apply

Processing fee: Some banks do not charge a processing fee for an education loan. So if your bank is asking for it, you can talk to your bank and check if t they can remove it, give a discount or defer it.

Prepayment fee: Again in almost all cases, bank allow foreclosure or pre-payment of the loan amount without charging a penalty if the borrower makes the payment from his or her sources. If your bank has a charge for prepayment, then it may make sense to have a talk with the bank before you apply. You can also make part payments during the tenure of loan.

Applying Online

To keep up with the increasing trend of online transactions, the bank offers Education Loan application online through its website and also through Paisabazaar portal. The procedure of applying for education loan is quite simple:

Visit www.paisabazaar.com and use their eligibility calculator tool to check the range of suitable education loan options for you. You will need to enter a few details like loan amount, tenure for repayment and possibly name of the institution, you are seeking admission into. After filling up the necessary details you will be redirected to another page having the available options. You can then choose Dhanlaxmi education loan and proceed further after the concerned official will contact him/her.

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 using the internet banking facility check the status of the Education Loan availed by him or her.

Customer Care

The bank also has a systematic approach to deal with the customer’s Loan related queries. Customers can call the bank on their toll free number. The customers can also use the website of the bank to connect with the bank online by filling up and sending an online form depicting the queries, requests or feedbacks. Lastly, the customers can also write to the bank at its registered office in Kerala.

Dhanlaxmi Bank Student Loan Scheme FAQs:

  1. How to apply for a Dhanlaxmi Bank student scheme?

Applying for an education loan from Dhanlaxmi Bank is very simple and easy process. All you have to do is go to the bank website and fill up a loan application form online and provide all the mandatory details required.

  1. Does the bank have prepayment charges?

No prepayment charges are applicable on Dhanlaxmi Bank student loan scheme.

  1. What are the processing charges applicable with the bank?

The scheme for educational loans with Dhanlaxmi Bank does not charge anything as processing fee.

  1. Does the bank provide vocational education loan and vocational training loan?

Dhanlaxmi Bank loan for vocational education and training is given to students pursuing professional course study in India. The courses include programmes offered by ITIs, ITCs, Polytechnics and other technical and vocational training institutes. Anyone planning to study in such a recognized educational institution can apply for a Dhanlaxmi Bank vocational education and training loan.

  1. What is the eligibility criterion of applying for loan for vocational education?

The eligibility criteria for these Dhanlaxmi Bank education loans are similar to that of a standard Dhanlaxmi Bank education loan. The student must be a resident of India and must produce all the educational documents and proof of qualifying entrance exam conducted by universities.

  1. What are the repayment options available with the bank?

Mostly repayment of the education loan is based on future earning potential of the student. Going by the bank policy, the limit of Rs 4.0 lakh collateral fee loan is not family specific but student specific. However, there is no restriction on giving a second and third collateral free loan to other siblings when one of the siblings has already taken a loan from the bank.

  1. Whether bank can extend the repayment as per the request of a borrower?

Extension of repayment beyond the time specified for the sanction would result in restructuring of the loan and will be governed by RBI guidelines. However, in the case where student takes up higher studies shortly after completing the course, the initiation of repayment will be extended to six months from the employment or one year from the completion of the course. This rule will be applicable with all the banks irrespective of whether the student had taken fresh loan for higher studies or not.

  1. Whether any special incentive is available for female students?

Generally, the banks provide 0.5% or sometimes more concession in the interest on educational loans to female students pursuing higher education in India or abroad. Talk to a bank executive to know the incentives offered under the Dhanlaxmi Bank student scheme.