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Education loan
  1. Karnataka Bank – Educational Loan

Karnataka Bank is a major banking and financial institution based in coastal city of Mangaluru in Karnataka, India. It has been designated as A1+ class schedule commercial bank by Reserve Bank of India. The bank has now a widespread national presence with a network of 1,230 ATMs and 765 branches across 21 states and 2 union territories. The bank offers diverse range of financial products and services to its customer with scheme for education loans as top most priority. The primary aim of Karnataka Bank education loan is to provide financial support to aspiring students who wants to pursue professional course study in India from recognised educational institutions.

Karnataka Bank provides its student loan scheme to cater to this need that may be availed for studies within India and overseas to students of merit from reputed educational institutions so that they can pursue their dream careers. Furthermore, Karnataka Bank’s education loan is not limited to just post-graduate courses from the best universities and institutions. Interested students may even avail this loan for graduate courses, technical courses and vocational education and training courses as well, provided these courses are recognized and are offered by valid and recognized institutes with the necessary certifications. The interest rates on educational loans provided by the Bank are highly competitive, and the bank even offers concessions to meritorious students, girl students and even meritorious girl students. With the Karnataka Bank Education Loan, there is a whole world of possibilities that are open to students.

Karnataka Bank student educational loan is for different needs as well as requirements of students who avail the loan. The name of this student loan scheme is KBL Vidyanidhi.

2. KBL Vidyanidhi Education Loan

  1. Features:
  • The Karnataka Bank education loan process is a very swift with quick sanction as well as disbursal of the loan. The Vidyanidhi loan documentation process is also very simple. If all required documents are readily available, then the Karnataka Bank Vidyanidhi Education Loan can be approved and disbursed in a period of seven working days.
  • A co-applicant or joint borrower is necessary if you want to avail this Karnataka Bank education loan. The co-applicant may be the student’s parents or guardian. Both co-applicants and borrowers are held responsible by the bank for the repayment of the Karnataka Bank student loan scheme.
  • You don’t need to worry regarding hidden charges in this loan for courses and processing of this Karnataka Bank education loan is transparent. All applicable charges for loan are mentioned upfront when the applicant approaches Karnataka Bank for an education loan.
  • The max. loan amount sanctioned for domestic studies is Rs. 10 lakhs. A higher amount of Rs. 20 lakh is sanctioned in case of overseas studies.
  • No security required for education loans less than Rs. 4 lakhs. In case the loan amount sanctioned is between Rs. 4 lakh and Rs. 7.5 lakhs, collateral security such as third-party guarantee is mandatory.
  • For education loan quantum in excess of Rs. 7.5 lakhs, bank approved and acceptable collateral such as property documents/securities and bonds, etc. are mandatory.
  • If part of the student loan from Karnataka Bank is used for purchasing a computer, it will be hypothecated to the Bank.
  • Karnataka Bank offers flexible tenure for loan repayment that ranges from 5 years to 7 years. This includes the moratorium period during which no interest charges are added to the education loan.
  • Borrowers of the Karnataka Bank Education Loan on procuring a secure job during the moratorium period or holiday period, have to inform the bank representatives. In this way, the repayment period starts earlier as the borrower has a secured income.
  • Students who avail of the Karnataka Bank Student Education Loan may ask the bank for an extension of an additional two years if they do not complete the course within the stipulated time period. Further extensions will be provided by the bank on the condition that the reasons given for the requirement of the extension are beyond the control of the student.
  • For loan amounts greater that 4 lakhs, bank places no loan margin on education loan. For Karnataka Bank education loans exceeding Rs. 4 lakhs, 5% margin is in effect for domestic courses, while margin is increased to 15% for overseas students.
  • The student borrower’s margin may be paid on a year-to-year footing on a pro-rata basis when Karnataka Bank disburses the loan amount based on requirement.
  • The interest portion of repayment made in lieu of a Karnataka Bank Education Loan is exempt from direct taxation as per Section 80E.
  • The loan when disbursed is paid out directly to the institute where the student is studying.
  • ECS or electronic clearance system of auto debit may be used to pay off the due EMI on Education loan. Otherwise, PDC (post-dated cheques) may be used.  
  • Interest during course duration is optional with the Karnataka Bank Education Loan. However, payment of interest during this period would offer some key benefits like lower interest rate during loan tenure.
  • Interest rate chargeable on the Karnataka Bank Education Loan differs on the basis of factors such as, if the loan applicant is a normal student, if the loan applicant is a meritorious student, if the loan applicant is a normal girl student and if the loan applicant is a meritorious girl student.
  • The bank also offers loan for vocational education so as to bring certain degree of skills and expertise by enabling them to pursue vocational education and training courses.
  • Vocational education loan and vocational training loan is one crucial step taken by major banking institutions to convert non-skilled India to skilled India. Very little workforce in India are documented to have acquired formal vocational skills in India, therefore such vocational education and training courses will encourage students to make more carriers with such courses.
  1. The expenses covered in the Karnataka Bank Education Loan are as follows:
    • Fees to be paid to school/university/hostel/college.
    • Fees for Library/Examination/Laboratory.
    • Travel Expenses for overseas students
    • Building Fund/Caution deposit/refundable deposits if those are supported by proper receipts/bills.
    • Purchase of uniforms/instruments/books/equipment.
    • Price of computer in case necessary for course completion.
    • Additional course-specific expenses related such as project work costs, thesis, study tours, etc.

3. Rate of Interest of the Karnataka Bank Vidyanidhi Education Loan

The rate of interest that is offered by the bank on its student loan scheme is divided into three sections. The interest rate that is charged by the bank is as follows:

 

Education Loan up to Rs. 4 lakh

Effective Rate

Male Student

11.15%

Girl Student

11.10%

 

Education Loan up to Rs. 4 lakh

Effective Rate

Male Student

13.95% (normal)

13.45% (meritorious)

Girl Student

13.45% (normal)

12.95% (meritorious)

 

 

Education Loan for Vocational Courses/Skill Development loans (under CGFSEL)

Effective Rate

Male Student

10.65%

Girl Student

10.60%

4. Education loan eligibility required for applying for the Karnataka Bank Vidyanidhi Education Loan

The following people are eligible to apply for the student loan scheme offered by Karnataka Bank:

  • An Indian Resident with permanent address in India. 
  • Applicant must have confirmed admission in an institute of higher studies through applicable selection process or qualifying test.
  • The applicant if over 18 years may represent himself/herself, otherwise parent or legal guardian will be the representative.

5. Documentation required for the Karnataka Bank Vidyanidhi Education Loan

The following loan documents are required to be submitted for availing the Karnataka Bank Education Loan:

 

Category

Necessary Documents

Academic /Educational documents

Copy of admission letter

 

Mark/grade sheet of qualifying exam

 

Course fee breakdown

 

Copy of letter that confirms applicant’s fee waiver, scholarship information etc.

KYC (Know Your Customer) Requirement for New Customer

Address, identity and signature proof documents.

Income Documents

Salaried Applicant

 

Previous 2 years’ ITR

 

Bank statement of Salary account for last 6 months

 

Statement of borrower’s assets/liabilities

Others

Application Form duly filled out

 

Two photographs (cross signed)

 

Documents of property/securities provided as collateral

 

Foreign exchange permit information copies, if applicable

Post Sanction Documents

Loan agreement

Completed filled out Loan Agreement with signatures of applicant and co-applicant.

Stamp Duty at actuals

6. Eligible courses for Karnataka Bank Student Education Loan

  • For studies in India:
  • Graduation and Post-graduation – Degree and Diploma courses like B.A, B.Com., B. Sc., B.B.M., Master and Ph.D., that are conducted by UGC/AICTE/IMC/Government, etc. approved institutes.
  • Regular courses conducted by deemed/autonomous educational institutions like IIMs, XLRI, NIFT, reputed foreign universities that offer courses within India, etc.
  • Degree and Diploma courses for pilot training, shipping, aeronautics, etc. as approved by the DGCA (Director General of Civil Aviation/Shipping).
  • Professional Degrees – including courses such as Engineering, Agriculture, Medical, Dental, Law, Computer, Physiotherapy, Hotel Management, ICWA, CFA, CA
  • For studies abroad:
    • Graduation and Post graduation course for a range of job oriented professional as well as technical courses offered by well-known universities, such as MBA, MS degrees and courses by CIMA and CPA.

7. Repayment Tenure of Loan

Generally, the bank keeps 5 to 7 years as the loan repayment tenure. If student who has taken the loan secures employment during the gestation period, the repayment schedule must be advanced to commence immediately. The completion of the course you are pursuing includes apprenticeships and internships if compulsory for award of degree. If student fails to complete the course within the anticipated time, a maximum time limit of 2 years is permitted. If the student is not able to complete the course for reasons beyond his/her control then extension may be granted if believed to be necessary for course completion. The total interest accrued during the moratorium period would be added to the loan principal amount payable and paid off in the form of equated monthly instalments.

  1. Security and margin:
  • For Karnataka Bank education loans of up to Rs. 2 lakh, the loan shall be given be jointly with guardian and parents. A guarantor with net worth not less than amount of loan shall join the transaction in addition to parent or guardian.
  • For loans above Rs. 4 lakhs, it should be given jointly to applicant with parents or legal guardian as co-signor. In case, the lands and building are already maintained, the same can be used as security on another one on a charge basis if adequate security cover equal to the loan amount quantum is available. Any technology purchase such as computer purchased with this student loan scheme would have to be deposited to the bank.
  • For loans up to Rs. 2 lakh no margin is required and for loans above Rs. 2 lakh it is 25% for studies in India and abroad.
  • Any other kind of assistance or scholarships may be reckoned as part of margin. Margin may be brought in on year to year basis as and when disbursement takes place on pro rata basis.

8. Security and margin:

  • For Karnataka Bank education loans of up to Rs. 2 lakh, the loan shall be given be jointly with guardian and parents. A guarantor with net worth not less than amount of loan shall join the transaction in addition to parent or guardian.
  • For loans above Rs. 4 lakhs, it should be given jointly to applicant with parents or legal guardian as co-signor. In case, the lands and building are already maintained, the same can be used as security on another one on a charge basis if adequate security cover equal to the loan amount quantum is available. Any technology purchase such as computer purchased with this student loan scheme would have to be deposited to the bank.
  • For loans up to Rs. 2 lakh no margin is required and for loans above Rs. 2 lakh it is 25% for studies in India and abroad.
  • Any other kind of assistance or scholarships may be reckoned as part of margin. Margin may be brought in on year to year basis as and when disbursement takes place on pro rata basis.

9. How to apply for the Karnataka Bank Vidyanidhi Educational Loan

  • While applying for education loan applicant will have to visit the Karnataka Bank branch that is nearest to him or her and meet with a bank representative with the necessary loan documents as mentioned above. The loan applicant will have to present his or her parent or guardian as a co-applicant/joint borrower to avail the Karnataka Bank Vidyanidhi Educational loan. The bank representative may ask you to fill up a form loan application form with all the mandated information for availing Karnataka Bank student scheme.