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Education Loan

Saraswat Bank is one of India’s largest urban co-operative banks. The bank is primarily situated in Maharashtra, India and has been operating as a co-operative bank since 1918. The year 1988 was a crucial year for Saraswat Bank as it was deliberated with the “scheduled” status by RBI. Ever since then, the bank has never looked back and has gone on to gain widespread recognition for its services to its customers. It became the first co-operative bank to deliver business banking services and also got the authorization to deal in foreign exchange. The bank has now established a national as well as an international presence with correspondent relationships in 45 countries which covers 9 currencies. It has a widespread network of 267 branches across the country and is broadly popular for affordable credit schemes and attractive interest rates.

Saraswat Bank offers scheme of education loans to students intending to pursue their higher education from recognized educational institutes both in India and abroad. The bank offers a comprehensive education loan scheme with flexible repayment options, higher loan amounts, longer tenure of loan, subsidies on interest rates, including special discounts for women. Apart from the regular student loan scheme, the bank also offers loan under the Government’s education scheme which is discussed later below.

Features of Saraswati Education Loan

  • The Saraswat Bank education loan is granted to an individual so that he can pursue higher education from reputed educational institutions in India or abroad
  • For studying in India the maximum loan amount granted is Rs. 10 lakh but for studying abroad, the maximum amount of education loan granted is Rs. 50 lakh
  • Up to 90% of the cost of the education fee and other expenses are granted as loan under this Saraswat Bank education loan
  • There is a moratorium period or repayment holiday under the Saraswat Bank student loan scheme which is equal to three years of the course duration and one year post course completion. So total 4 years is the granted as moratorium period post availing the loan
  • The repayment period of the student loan scheme is limited to 12 years and it is counted from the expiry of the moratorium period
  • There is no provision of a processing fee if the student pursues the professional course study in India but if he opts for a foreign education, 0.5% of the loan amount granted would have to be paid as a processing fee
  • The shareholding requirement for Saraswat Bank education loans up to Rs. 2 lakh is nil. But for loans above this value, there would be a shareholding of 2.5% of the loan amount subject to a maximum of Rs. 25,000
  • Security would be required to avail of the Saraswat Bank student education loan. If the value is limited to Rs. 2 lakh, two guarantors would be required for the Saraswat Bank education loan. Values above Rs. 2 lakh and up to Rs. 5 lakh would require two guarantors and hypothecation of domestic articles. If the loan amount exceeds Rs. 5 lakh, then a pledge of any other tangible security would be required which should be acceptable to the bank or an equitable mortgage of property would be sought as security
  • A life insurance policy on the student borrower’s life would have to be effected

 Education loan eligibility:

Any individual can avail of the Saraswat Bank student scheme provided he or she has secured admission in a recognized graduate or a post-graduate course which is offered by a college, institute or university which is approved by the IBA

Rate of interest for Saraswat Education Loan

The rate of interest for IBA approved courses is the bank’s Prime Lending Rate less 2.50%. Since the bank’s Prime Lending Rate is currently 14.25%, the effective rate of interest becomes 11.75% per annum.

 Loan documents required for Saraswat Bank education loan

  • The prescribed loan application form correctly filled
  • A photo identity and residence proof of the applicant
  • A photo identity and residence proof of the guarantor
  • Income proof which for salaried individuals is salary slip of the preceding 3 months, Income Tax Return and Form 16 of the last 3 years
  • Income proof of businessmen, professionals or self-employed individuals which is Profit and Loss Account and Balance Sheet of the last 3 years and bank statement of the last 3 months
  • A proof showing a confirmed admission
  • An estimate of the required course fee and other related expenses like travelling, lodging or boarding
  • Fee receipts or any other proof of payments made for the course may also
  • If the student is going abroad for the course, copy of the student’s passport, VISA and other related educational documents

PadhoPardesh Scheme for Education Loans

A Saraswat Bank student loan scheme which is implemented by the Government of India and the IBA which provides interest subsidy to students of minority communities when they seek an education loan to pursue higher education abroad from recognised educational institutions. There are certain eligibility criteria which are to be followed for availing of this student loan scheme. They are:

  • The Saraswat Bank education loan should be availed from any co-operative bank for approved post-graduation scheme taken abroad to qualify for the Education Loan scheme of IBA
  • The students should belong to the economically weaker sections of the society and have a parental or a family income from all sources not exceeding Rs. 6 lakh per annum. The Income Certificate to show the income should be issued by the authorized State Government officers and should be duly submitted
  • Students who belong to the minority community which is defined under Section 2 subsection c of the National Commissions for the Minorities Act, 1992 can avail of the loan. They have to submit a certificate or a self-declaration to this effect
  • Interest subsidy is only given during the moratorium period

Central Scheme of Interest Subsidy on Education Loan

One of the major responsibilities of the Government of India is to assure that nobody is denied education from primary level to professional education due to lack of finances. Indian bank association has formulated a far-reaching model of student loan scheme for adoption by all the banks. This Saraswat Bank education loan is designed to support students from low income sections of the society in pursuing higher studies from good educational institutions in India.

This is another subsidy scheme launched by the Government of India for the students of the weaker sections of the society. The Saraswat Bank student education loan scheme has the following criteria:

  • Saraswat Bank education loans should be availed only from co-operative banks for pursuing approved courses post Class XII in technical as well as professional streams from well-known universities in India which are under the Education Loan scheme of IBA
  • The students should belong to the economically weaker sections of the society and have a parental or a family income from all sources not exceeding Rs. 4.5 lakh per annum. The Income Certificate to show the income should be issued by the authorized State Government officers and should be duly submitted
  • Complete subsidy on interest on education loans would be available only during the moratorium period
  • The scheme is applicable for the loan amount which is availed from April 1, 2009 to March 31, 2010 (academic year 2009-2010) and will be made available in future as per notification received from time to time
  • For loan amount sanctioned earlier to April 1, 2009, only amount disbursed during the above period are eligible. Meritorious students can contact the branches of the bank where they have availed or are availing loan for further details

Guidelines of the Central Scheme of Interest Subsidy on Saraswat Bank student loan scheme:

  • Applicability of the scheme: This scheme of interest subsidy on education loans would be available only for courses /studies from reputed professional and technical educational institutions in India. The interest subsidy will be linked with the existing model student loan scheme of the bank and is restricted to students enrolled in the job oriented or professional courses in the universities or colleges established by an Act of the Parliament or recognised by the other concerned statutory bodies, and institutions like IIMs and IITs or other educational institutions set up by the Central or State Government
  • Applicable academic year: The Central Scheme of Interest Subsidy is effective on loans taken in academic year of 2009 to 2010, starting from April 1, 2009. The loan amount taken in the starting year (irrespective of the sanction sanction) will only be considered eligible for interest subsidy plan.
  • Other factors: This Interest Subsidy Scheme on education loans should only be claimed if subsidy is not claimed against another state government scheme. All the eligible borrower students are requested to visit the branches, where they have availed the loan, so that they can enrol themselves to avail the subsidised interest on the amount of education loan. Students must be carrying all the requisite certificates before approaching the respective branch. They must submit the application form claiming subsidy and once verification is done by the bank officials, their claimed subsidy will be approved and granted.

Applying for Education Loan from Saraswat Bank:

Those who wish to apply for the Saraswat Bank education loan of the bank would have to visit the banks nearest branch for making an application. An application form would have to be filled and submitted with the required documents and any processing fee for completing the application process. This is a hassle free process and allows you to apply for a loan for courses from the comfort of your house or office.

Customer care:

The bank has traditionally shown immense support and care to its customers and since the beginning has focused on fulfilling the needs of the common people. This customer centric approach has made the Saraswat Bank mindful of its social responsibility. You can anytime contact the customer care team regarding your complaints and inquiries.