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Education Loan

Oriental Bank of Commerce was established in Lahore in the year 1943. After the Partition, it shifted its registered office to Amritsar. The bank offers projects and services that benefit minorities, rural sectors, backward classes and women. It seeks to alleviate poverty through various grassroots projects. Oriental Bank of Commerce offers its education loan schemes for financing the education of students at different levels of studies and different levels of institutes.  It is to be noted that Oriental Bank of Commerce offers a 0.50% concession on interest rates for girl students, Scheduled Castes, Scheduled Tribes and Disabled students.

Oriental Bank of Commerce Education Loans
Oriental Bank of Commerce has four types of education loans on offer; we will go through the salient features of them below:

 

OBC Education Loan for studying in India and abroad

  • The purpose of this loan is to provide financial support to students who wish to study within India or abroad at reasonable and affordable costs and conditions.
  • Oriental Bank of Commerce ensures that the applicants are informed of all possible charges and fees at the very outset and there are no hidden costs.
  • Oriental Bank of Commerce has three categories of institutions for students who wish to avail this loan. Category A has top rung institutions for management and engineering such as the IIMs, IITs, Symbiosis Centre For Management & HRD, Symbiosis Institute of Business Management, Xavier Labour Relations Institute, etc. Category B has institutes such as the Indian Institute of Foreign Trade, Marine Engineering & Research Institute, Birla Institute of Technology, Institute of Management Technology, etc. The third category has all other institutions that are not mentioned in either the Category A or Category B lists, but are eligible for an education loan. Interested loan applicants may check if their institutes are mentioned in the Category A or Category B lists by checking the webpage.
     

Loan amount and Interest Rates

Oriental Bank of Commerce disburses a maximum loan amount of Rs. 25 lakhs for institutions that fall under Category A and a maximum loan amount of Rs. 10 lakhs for Category B institutions. For all other institutions, the loan amount will be based on the actual fees.

Interest rates also differ according to the category of institutions. Borrowers who have got admittance into Category B institutions will get an interest rate of MCLR + 0.50%, i.e., 10.05%. Borrowers who have got admittance into Category A institutions will have to repay at an interest rate equivalent to the MCLR, i.e. 9.55%. Other applicants will have to pay interest rates that are in keeping with the normal rate for education loans, see the table below:

LOAN AMOUNT

 INTEREST RATE

Up to Rs 4 lakhs

MCLR + 2% = 12.75%

From Rs 4 lakhs to Rs 7.5 lakhs

if credit guarantee coverage provided

MCLR + 3% = 13.25%

From Rs 4 lakhs to Rs 7.5 lakhs

if collateral provided

MCLR + 1.75% = 12.00%

Above Rs 7.5 lakhs

MCLR + 1.75% = 11.30%

  

  • Borrowers whose institutes fall under either Category A or B, no margin, processing fee or collateral security is to be provided by them. However, the other borrowers will have to pay as per normal terms and conditions of education loans. For the borrowers with loan amount above Rs. 4 lakhs, there is a margin of 5% for studies within India and 15% for studies abroad.
  • For borrowers whose institute fall under category A or category B and wish to avail bigger loan amount have to provide 100% tangible security.
  • There is a penal interest of 2% over the normal interest rate on loan above Rs, 4 lakhs on amounts that are overdue.
  • Category A borrowers have to provide a co-obligant who may be their parent/guardian, spouse or parents-in-law. For other borrowers whose loans are up to Rs. 4 lakhs their co-obligant may be their parent/guardian, spouse or parents-in-law. For loan above Rs. 4 lakhs to Rs. 7.5 lakhs, the bank will require one third-party guarantee and a co-obligant in the form of the parent/guardian, spouse or parents-in-law. For loans above Rs. 7.5 lakhs, borrowers may mortgage an immovable property they hold in their name, or provide a tangible security that has a value that is 100% equivalent to the loan amount. They also have to provide a co-obligant in the form of their parent/guardian, spouse or parents-in-law. In all cases, there is assignment of the borrower’s future income.
  • For all students OBC provides life insurance policy.
  • The repayment period of the OBC Education loan is up to 15 years, excluding the moratorium period. The moratorium period is defined as a time when the applicant does not pay EMIs.
  • The interest paid on the OBC Education Loan is eligible for tax exemption under Section 80E of the Income Tax Act.
  • After Oriental Bank of Commerce approves the education loan, the loan amount is directly disbursed to the educational Institution.
  • The Oriental Bank of Commerce Education Loan may be repaid via the Electronic Clearing Systems (ECS), post-dated cheques, by leaving instructions to the bank to debit the EMIs from his or her Savings Account on due date.
  • The loan may be sanctioned at a place that is closest to the residence or native place or nodal branch of the student borrower as per his or her choice and convenience
  • Oriental Bank of Commerce allows for a top-up loan/second education loan to be availed by the students.
  • Oriental Bank of Commerce may sanction an education loan for two dual courses that may be pursued by the student simultaneously.
  • Oriental Bank of Commerce Education Loan covers the following expenses:
  • Fees that are to be paid to the borrowers’ university/college/school/hostel
  • Examination/Library/Laboratory fees that the borrower will have to pay
  • Insurance premium for the borrower
  • Travel Expenses/passage money for those borrowers who are going out of the country on studies and bus fare for those borrowers who are studying in India
  • Insurance premium for the student borrower, if applicable
  • Caution deposit/Building Fund/refundable deposit that are supported by Institution bills/receipts
  • For buying books/equipment/instruments/uniforms
  • For buying computer at reasonable cost, if required for the completion of the course
  • Any other expense that the borrower may face that is related to the course.  

Eligibility

  • A student who is an Indian national
  • A meritorious student
  • He or she should have got admission into an institute for higher education that is recognized by a statutory body in India or abroad, by appearing in a entrance exam or via a merit based selection process
  • Eligible courses for the Oriental Bank of Commerce Education Loan

For studies in India: 

  • Approved courses for Graduation/ Post-graduation degrees and diplomas: including professional or technical Degree/Diploma courses that are conducted by colleges or universities that are approved by the UGC/ IMC/AICTE/ Government, etc.
  • Courses that are conducted by the IITs, IIMs, XLRI, etc
  • Courses such as the C.A., I.C.W.A, C.F.A., etc 
  • Regular Diploma or degree courses such as pilot training, aeronautical, shipping, nursing, etc., that are approved by the regulatory authority

For studies abroad:

  • Professional and technical graduation courses that are job-oriented and that are offered by reputed universities
  • Post graduate courses offered by reputed universities such as MCA, MBA, etc
  • Courses that are conducted by CPA in USA, or CMA in London, etc
  • Degree or diploma courses such as pilot training, aeronautical, shipping etc., that are conducted by institutes that are recognized by competent regulatory bodies abroad or in India
  • Oriental Bank of Commerce Education Loan - Tie-Up With NIIT Limited
  • The maximum loan amount that can be availed is Rs. 1.75 lakhs
  • There is no margin in this loan
  • The rate of interest in this loan is set at MCLR + 1.50% = 11.30%
  • There are zero processing fees/documentation charges/prepayment penalty
  • As security, Oriental bank of Commerce accepts the parents/guardians, spouse or parents-in-law to be the co-obligants

 

Oriental Bank of Commerce Education Loan - Tie-Up With NIIT Limited

This education loan offered by Oriental Bank of Commerce is offered with a tie-up with NIIT Limited for students who have got admission into NIIT.

  • There is no margin in this loan
  • The rate of interest in this loan is set at 12.20%
  • There are zero processing fees/documentation charges/prepayment penalty
  • As security, Oriental bank of Commerce accepts the parents/guardians, spouse or parents-in-law to be the co-obligants
  • The loan has to be repaid within ten years, which is inclusive of the moratorium period
  • The Moratorium Period is the course period plus twelve months grace period, which is 12 months after completing the course or six months after getting a job, whichever is earlier

Oriental Education Loan Scheme for Vocational Education & Training

  • The purpose of this loan is to provide financial support to students who are pursuing courses that are employment and skill development oriented
  • Oriental Bank of Commerce ensures that the applicants are informed of all possible charges and fees at the very outset and there are no hidden costs.
  • Oriental Bank of Commerce has certain tabs in place for issuing the maximum loan amount.
  • Courses that have a duration of upto three months, the maximum loan amount is Rs. 20000
  • Courses that have a duration of three to six months, the maximum loan amount is Rs. 50000
  • Courses that have a duration of six months to one year, the maximum loan amount is Rs. 75000
  • Courses that have a duration of more than a year, the maximum loan amount is Rs. 150000
  • Collateral security or a third party guarantee is not expected by Oriental Bank of Commerce for this loan.
  • The students’ parents / guardian, spouse or parents-in-law will have to stand as co-obligant.
  • No loan margin
  • No processing fees / documentation charges / prepayment penalty
  • The rate of interest on this loan is set at MCLR + 1.50% = 11.30%
  • The Oriental Bank of Commerce allows a 1% concession in the interest rate when the borrower pays interest during the moratorium period. The 1% concession is applicable only after the end of the moratorium period.
  • The moratorium period for courses that are up to one year is six months after the completion of the course. The moratorium period for courses that are over one year is twelve months after the completion of the course.
  • Borrowers have to repay a loan of up to Rs. 50,000, within two years. For loans above Rs. 50,000 to Rs. 1 lakh, the loan has to be repaid in two to five years. Loans that are above Rs. 1 lakh, the loan has to be repaid in three to seven years.
  • Oriental Bank of Commerce Education Loan Scheme for Vocational Education & Training covers the following expenses:
  • Fees payable as tuition or course fees
  • Examination/Library/Laboratory fees that the student will have to pay
  • A caution deposit
  • For buying books/equipment/instruments/uniforms
  • Life insurance premium
  • Any expense that may be related to the course

Eligibility Criteria

  • A student who is an Indian national
  • The student should have minimum qualifications as required by the institution
  • The student should have got admission into courses that are either run or supported by Central or State Government institutions
  • Eligible courses for the Oriental Bank of Commerce Education Loan
  • Certified skill development or vocational courses by a recognized Central or State Government institution or technical / statutory body or training department of the Government, etc.

Oriental Education Loan Scheme for Working Professionals

  • Provides financial support to individuals who are pursuing part time professional courses that enhance their career prospects
  • Oriental Bank of Commerce ensures that the applicants are informed of all possible charges and fees at the very outset and there are no hidden costs.
  • Oriental Bank of Commerce will provide the loan amount as per the fee structure of the institution.
  • Loan margin of 25%
  • The Oriental Bank of Commerce will accept the personal guarantee of a person as a form of security.
  • The moratorium period is up to the study period only
  • Repayment tenure is up to 15 years
     

The rate of interest is set at the rates mentioned below:

LOAN AMOUNT

INTEREST RATE

Up to Rs 4 lakhs

MCLR + 2% = 11.55%

From Rs 4 lakhs to Rs 7.5 lakhs

if credit guarantee coverage provided

MCLR + 2% = 11.55%

From Rs 4 lakhs to Rs 7.5 lakhs

if collateral provided

MCLR + 1.75% = 11.30%

Above Rs 7.5 lakhs

MCLR + 1.75% = 11.30%

  • Oriental Bank of Commerce charges a 2% penal interest over the normal interest rate on overdue amounts
  • There is zero prepayment penalty and processing fees.
  • Oriental Bank of Commerce Education Loan Scheme for Working Professionals covers the following expenses:
  • Fees that are to be paid to the borrowers’ university/college/school/hostel
  • Examination/Library/Laboratory fees that the borrower will have to pay
  • Insurance premium for the borrower
  • Travel Expenses/passage money for those borrowers who are going out of the country on studies and bus fare for those borrowers who are studying in India
  • Insurance premium for the student borrower, if applicable
  • Caution deposit/Building Fund/refundable deposit that are supported by Institution bills/receipts
  • For buying books/equipment/instruments/uniforms
  • For buying computer at reasonable cost, if required for the completion of the course
  • Any other expense that the borrower may face that is related to the course: for example, thesis, study tours, project work, etc.
     

Eligibility Criteria

  • The borrower should be an Indian national
  • The borrower should be at below 55 years old
  • The borrower should have passed graduation
  • The borrower should be working in a public/private or defense enterprises, etc
  • The student should have got admission into a part time course run by a recognized institution