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Education Loan

IDBI Bank is a government owned financial service bank. Previously known as Industrial Development Bank of India, IDBI Bank is headquartered in Mumbai. At present, it is the tenth largest development bank in the world in terms of reach with 1,853 branches including one international branch in Dubai, 1,382 centres and 3,350 ATMs.

IDBI Bank endows the scheme of education loans to all those candidates who are worthy to study further be it in India or outside India. The student loan scheme from IDBI bank aims to provide financial stability to students aspiring for higher studies from recognized educational institutions in India or abroad. The bank takes care of the entire financing though various student loan scheme options thereby making the loan an easy option and a strong finance to build up a bright future.

There are basically four types of schemes which are available under IDBI Bank Education Loan which are namely:

  • Loan for non vocational courses
  • Loan for vocational education/ courses
  • Loan for other students whose admissions are through management quota.
  • Education loan under Financial Inclusion Programme (FIP).

Let’s have a look into the above IDBI Bank student schemes one by one.

Loan for Non Vocational Courses

The general offer is as follows:

This IDBI Bank education loan is available to Indian nationals who have secured admission through merit based selection or entrance test procedure after finishing the 10+2 higher secondary examination or alike. Additionally, students who have secured extra marks above the standard marks under the management quota requirement for merit based examinations for the general/girls/ST/SC or OBC specifications of that institution are also eligible for the IDBI Bank student education loan.

Eligible Courses

The following professional degree courses of India can be considered:

  • Courses which are approved for Graduation or Post Graduation and PG Diplomas by educational institutions in India such as universities or colleges which are accepted by the Government, UGC, AICTE, AIBMS, IMCR, etc.
  • After 10th standard, for technical diploma which are being offered by polytechnic institutions for 3 years.
  • Job based courses for professional or technical degree, post graduate and diploma in approved institutions.
  • Courses which are approved and offered by renowned foreign schools and universities of India.
  • Cases where the course needs to be done in India and abroad as well, finance will be offered for the part done in India.

Outside India- The following courses, available outside India, are eligible for an IDBI Bank student education loan:

  • Graduation courses (particularly job based) for professional or technical degree from approved institutions.
  • Courses which are offered by CIMA London.
  • Post Graduation for MCA, MS, MBA etc.

Special Course: The loan for courses is also provided by IDBI Bank for diplomas or degrees for pilot training, shipping, aeronautical by recognized bodies for the purpose of employment in India or outside India.

Amount of education loan

This is based on the repaying capability and income of the parents and students, however the maximum loan amount that can be given for studying in India is Rs. 10 lakhs and outside India, it is Rs 20 lakhs.

Repayment

The moratorium period as per IDBI rule is duration of the course plus 1 year or 6 months post getting a job, whichever is earlier.

The repayment period for loans till Rs. 7.5 lakhs is up to 10 years and above Rs. 7.5 lakhs it’s up to 15 years.

Security

  • Loan amount above Rs. 4 lakhs do not require any security.
  • IDBI Bank education loans between Rs. 4 lakh - Rs. 7.5 lakh require a third party guarantee.
  • Loans above Rs. 7.5 lakh:-
  1. Land or building and not agricultural - The minimum value should be 1.33 times of the loan amount.
  2. Units of KVP, NSC, LIC, UTI , Government Securities, mutual funds, debentures, gold, share, bank deposit in parent’s or student’s name- minimum value is to be 1.1 times as per the margins set by the bank.
  3. Bank will or might accept other concrete or substantial security as well with proper margin if they find it suitable

Expenses Covered

The expenses which will be covered under IDBI Bank education loan are:

  • The fees which are payable to the school, hostel or college.
  • Fees for library, exams and laboratory.
  • Expenses for uniforms, books, instruments, equipments.
  • Expenses incurred for travel during course time.
  • Expenses for laptops and computers.
  • Insurance Premium for student if there is any.
  • Caution deposit which should be less than 10% of the entire tuition fees.

Margin

 For loan amounts above Rs. 4 lakh, 5% would be the margin.

Balance Transfer is allowed under this scheme but subject to certain terms and conditions.

Premier Institutions

Under Non Vocational Courses, comes the other segment where the students of premier education institutes who are doing full time courses are also eligible. Here the amount of education loan offered is up to Rs. 30 lakhs or 95% of the total cost of the course whichever is lower. Security is not required for amount up to Rs. 20 lakhs , however above Rs. 20 lakhs tangible security like land which is not agricultural, building, the value of which has to be 1.33 times of the sanctioned loan amount. Units of KVP, NSC, LIC, UTI , Government Securities, mutual funds, debentures, gold, share, bank deposit in parent’s or student’s name etc. having a minimum value of 1.1 times will be accepted. The repayment period for loans till Rs. 7.5 lakhs is up to 10 years and for above Rs. 7.5 lakhs it is up to 15 years. Balance transfer is accepted. Under this, all expenses are covered as mentioned above general category, additionally passage money for travelling abroad and travelling expenses are also covered.

ICAI Courses

For all Indian nationals who are pursuing chartered accountancy course after having cleared entrance exam. The maximum loan amount is Rs. 3 lakhs. Balance transfer is not permissible. There is no repayment holiday under this and the repayment period is 84 months.

Special Courses

This is basically for students who have enrolled themselves for special courses which are being conducted by renowned private companies or agencies. The maximum loan amount is Rs. 2 lakhs. There is no repayment holiday under this and the repayment period is 84 months.

Balance transfer is not allowed.

Expenses for the following reasons are considered:

  • Course tuition fee, hostel fee.
  • Fees for library, exams and laboratory.
  • Expenses for uniforms, books, instruments, equipments.
  • Purchase of computers.
  • Caution deposit.
  • Any other related expenses.
  • Insurance premium if any.
  • Travel expense or passage money for travelling outside India.

Loan for Vocational Education and Training Courses

With the current focus of converting “scam India into skill India” one needs to pay attention towards the financial feasibility of our country for creating a talent pool of 500 million skilled youth by 2022 as envisaged. The most significant step taken in this direction by all the banking institutions of our country including IDBI Bank is financing the vocational education and training courses required by the student by providing a vocational education loan or vocational training loan.

This new IDBI Bank vocational education and training loan enables loans for duration of 2 months (which is the minimum) to 3 years with no age limit and no collateral. The parents can act as joint borrower in availing this loan for vocational education. This IDBI Bank loan for vocational education and training not only help students but also training providers who give financial barriers as a reason for low enrolment.

Under this category, the loan is offered to Indian Nationals who have secured admission in a particular course which is conducted by the department or any organization which is supported by State Skill Corporations, National Skill Development Corporation or State Skill Mission who issues a certificate, degree or a diploma and which is recognized and approved by the Government Organization itself or the Government.

Balance Transfer is not allowed under this scheme.

Type of courses considered

Vocational education and training course or skill development courses which are usually for 2 months to 3 years. State Level Banker’s Committee or State Level Coordination Committee may add various other courses related to skill development as well.

Expenses Covered

The expenses which will be covered under the loan for vocational education are:

  • Course Tuition Fee.
  • Fees for library, exams and laboratory.
  • Expenses for uniforms, books, instruments, equipments.
  • Insurance Premium for student if there is any.
  • Caution deposit.
  • Any other related expense.

 Loan amount

Till 3 months

Upto Rs. 20,000/-

3 months to 6 months

Upto Rs. 50,000/-

6 months to 1 year

Upto Rs. 75,000/-

Above 1 years

Upto Rs. 1,50,000/-

 

Repayment Period

The moratorium period as per IDBI rule for courses of 1 year is 6 months from the conclusion of the course and above 1 year it’s 12 months.

The repayment period for loans till Rs. 50,000 is up to 2 years, for loans in the range of Rs. 50,000 – Rs. 1 lakh, it is up to 2-5 years and for the ones above Rs. 1 lakh, it is 3 to 7 years.

Security

Under this IDBI Bank loan for vocational education and training, the loan documents can be jointly executed by the parents. Sometimes bank may ask the applicants to produce educational documents before sanctioning the IDBI Bank student loan scheme.

Loan for other students who have secured admission using management quota.

This particular vocational education and training loan is given to those students in India whose admissions are confirmed under the management quota and has secured admission under this as he or she has not qualified under merit based quota selection process.

Type of courses.

Courses applicable in India (only job based courses) which are being offered by educational institutions approved and recognized by UC, AICTE etc.

Eligibility

There is no minimum age limit; however, the maximum age should be 50 years at the time of maturity of the loan. And for the co-applicant, below is the age requirement:

Type

Minimum Age

Maximum Age

Salaried

21 years

65 years

Self employed

21 years

70 years

Agriculturists.

21 years

70 years

Amount

The maximum loan amount is Rs. 10 lakh.

Repayment

The moratorium period as per IDBI rule is duration of the course plus 6 months.

The repayment period for this IDBI Bank education loan type is 120 months which excludes the moratorium period.

Security

Under this IDBI Bank student loan scheme, there is no need for any guarantee; however, the primary security is compulsory. And the primary security can be in the form of tangible security like land which is not agricultural, building, the value of which has to be 1.33 times of the sanctioned loan amount. In case of mortgaging immovable property then process of home loan is to be followed.

Cases where the primary security falls short, collaterals like FDs, NSCs, LIC Policies can be taken to be at 1.33 times.

Margin & Processing Fee

15% of the total cost needs to be paid beforehand before each and every disbursement. A processing fee of 1% of the loan amount subject to a minimum of Rs. 1,000/- is charged.

Penal Charges

2% of the overdue amount and period is to be charged.

Under this student loan scheme, balance transfer is not permissible.

Educational Loan under Financial Inclusion Program (FIP).

Under this IDBI Bank education loan, the category of customers are covered which are being selected by RBI to IDBI.

Under this student loan scheme, one has to pass the 10th standard with a bare minimum  of 45% marks with an age of 15 years. The co-applicant must have a savings account or an account under Bio Metric Smart Card. Unique feature here is to note that no security is required.

Type of courses.

Following are the type of courses which are available under this IDBI Bank student loan scheme:

  • Engineering Diploma
  • Certificate courses from ITI
  • Teacher Training/ Nursing courses and Bed
  • Computer Certificate Courses
  • Veterinary Diploma
  • Data entry operator course
  • Agri diploma
  • Any job based diploma or certificate course

Loan Amount

The loan amount is Rs. 2 lakhs.

Repayment

The Moratorium period as per IDBI rule is for courses of 1 year is 6 months from the conclusion of the course and above 1 year its 12 months.

The repayment period is for loans till Rs. 50,000 is up to 2 years, Rs. 50,000 – Rs. 1 lakh it is up to 2-5 years and loans above Rs. 1 lakh, it is 3 to 7 years.

Expenses Covered

The expenses which will be covered under the loan are:

  • Course Tuition Fee.
  • Fees for library, exams and laboratory.
  • Expenses for uniforms, books, instruments, equipments.
  • Insurance Premium for student if there is any.
  • Caution deposit.
  • Any other related expense.

IDBI Bank provides educational loan to physically handicapped students up to the extent of 40%.

There is no minimum amount; however, the maximum amount is Rs. 10 lakhs in India and Rs. 20 lakhs outside India. No security is required for this scheme.

IDBI Bank education loan scheme for specialised courses:

This student loan scheme is specifically designed for students who have secured admission in some specialised or professional courses.

  • Granted to students who are Indian Nationals and enrolled for degree/diploma/certification courses in India offered by reputed Institutes/ Private Agencies / Companies including part time courses / part time executive programmes
  • Customised programmes for employees by employers jointly with institutions like ISB / IIMs, other reputed management institutions, open and central universities, IITs, NITs / franchises / IT-related OEMs
  • Hardware and software specific courses  which result in significant enhancement in job opportunities or career growth for the student
  • Such courses may or may not be approved by any Indian agency. However, they are promoted / designed by industry / companies considering market / business requirements and have significant standing in the job

 

Education loan eligibility:

  • Must be an Indian citizen residing in India.
  • Candidates must have enrolled themselves in skill enhancement, job oriented courses, career advancement courses like SAP, NET, C-DAC, management programmes for executives and professionals.

Loan amount:

Maximum loan amount is restricted to Rs. 15 lakhs.

Security/collateral:

  • Up to Rs. 4 lakh: No security is required
  • Parents to be joint borrowers above Rs. 4 lakhs and up to Rs. 7.5 lakhs: Third Party Guarantee besides parents being joint borrowers above Rs. 7.5 lakhs
  • Corporeal collateral security, along with the assignment of future income of the student for payment of instalments
  • Tangible Security: In the form of immovable property in the name of parent/ student/ guardian / co-applicants which should have value of 1.33 times the amount of loan sought. Such security should not be an open plot or agricultural land engaged in cultivation activities

Or

  • Any fixed income security, viz. Govt. securities / public sector bonds, NSC, KVP, LIC policy, debentures, fixed deposits with IDBI bank, etc. having fixed returns / surrender value in the name of student / parent/ guardian/ co-applicants. The minimum value of such security shall be 1.1 times of the loan sought after considering the margin requirement applicable for the loan against respective security instrument.

 Interest rates offered by IDBI Bank:

Non Vocational Courses

 

Amount upto Rs. 10 lakhs

10.45%

Above Rs. 10 lakhs

11.45%

Vocational Courses

10.45%

Loans for students in Premier Institutes

9.45%

Loans for students under Management Quota

12.35%

Applying for education loan online

Loan application forms can be given online for IDBI Bank educational loan. You can do this with the help of Paisabazaar portal, where in you need to enter a few personal details to have a look at the list of suitable loan options. You can then choose the most suitable one and proceed further. Online portal saves you from the hassle of visiting banks and comparing rates and does it all for you.