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Education Loan

The economy in today’s world is very tough and consequently competition is extremely intense. What sets an individual apart from the rest is good education. The need for good education is paramount for any youngster who wants to succeed in life. In today’s world of hyper competitiveness and rising prices, parents face with the challenge of providing the best education to their children. And good education comes at a price. Higher education is expensive; therefore the need of the hour is an education loan with favourable terms and conditions. Rising cost of colleges and post-graduate education in India and abroad makes the case of availing an education loan a practical necessity. To cater to the growing need of affordable educational loans, State Bank of Bikaner and Jaipur is offering customers with education loans which help parents and students fulfil their dream of quality education to achieve their goals in life.
 

Features of the SBBJ Education Loan

  • Customers of SBBJ education loans find the loan process including application, sanctioning and disbursal to be one that is efficient, quick and in short, hassle-free.
  • SBBJ representatives and loan agents take care and ensure that they explain all the charges and fees related to SBBJ education loan at the outset to students applying for education loan. The bank takes pride in its total transparent process of offering loans. SBBJ does not charge any hidden fee that the customer is not made aware of.
  • An individual can avail a SBBJ student education loan for a maximum amount of Rs. 10 lakh when studies are going to take place in educational institutions of India. For studies abroad, the borrower can avail a maximum loan of Rs. 20 lakhs under the SBBJ student loan scheme.
  • Margin money is the amount one needs to pay from own funds, while the rest is paid by the bank. State Bank of Bikaner and Jaipur charges no margin for loans amounting up to Rs. 4 lakhs. If the amount of education loan under the SBBJ student loan scheme is greater than Rs. 4 lakhs, the margin structure is – for studies within India, 5% of the loan amount, while for studies outside India, the margin is 15% of the loan amount.
  • One is required to provide security in this case, to the lender bank – State Bank of Bikaner and Jaipur, in the form of deposits, or any other fixed assets so that the bank is assured that the borrowed amount will be repaid. For a SBBJ education loan of up to Rs. 4 lakhs, the loan applicant is not required to provide any security. For an education loan with loan amount between Rs. 4 lakhs to Rs. 7.5 lakhs, the bank requires a third party guarantee as security. For educational loans greater than Rs. 7.5 lakh, the bank requires equitable mortgage of landed property or some other tangible security to protect its interests.
  • Borrowers are permitted to not pay any interest during the period of study. However, if the borrower does choose to pay the interest during the study period, then he or she will be eligible for a rebate of 1% on the interest rate when he or she starts paying back the principal amount. In case the borrower does not pay interest during the study period, the outstanding interest is automatically added to the loan amount. The time period when the borrower does not pay any EMIs is known as the moratorium period or repayment holiday.
  • The repayment period starts after one year of course period or 6 months after getting a job, whichever is earlier. The repayment of the education loan under the SBBJ student loan scheme takes place in Equated Monthly Instalments or EMIs. For loan amount up to Rs. 7.5 lakh, the EMIs are for a maximum period of 10 years. For loans greater than Rs. 7.5 lakh, the EMIs have to be paid over a maximum period of 15 years. The repayment period of the loan begins after the completion of the moratorium period.
  • Borrowers are eligible for tax exemption under the Indian income tax laws on the interest paid on the education loan.
  • The borrower can choose to repay the education loan by Electronic Clearing System (ECS) or by submitting post-dated cheques or by giving standing instructions to State Bank of Bikaner and Jaipur to debit the required EMI amount from their savings account whenever the EMI is due for payment.
  • If required, borrowers who have an existing education loan from State Bank of Bikaner and Jaipur can avail a second education loan for another course, once they have completed their first course. This can be done at the same branch from where the borrower availed his or her first education loan from State Bank of Bikaner and Jaipur.
  • State Bank of Bikaner and Jaipur sanctions the education loan to the applicant on the basis of a number of factors such as the reputation of the educational institution and quality of the course, future income prospects of the loan applicant and requirements for studies. The scheme for educational loans does not factor in the income of the loan applicant’s parents or guardians.
  • State Bank of Bikaner and Jaipur provides an interest subsidy on SBBJ education loans. The subsidy is applicable for courses pursued in recognised technical and professional educational institutions in India. The bank offers this subsidy only to those students who wish to pursue their diploma or degree from professional courses of India. The subsidy offered by the bank is also available for integrated courses. The interest subsidy claims are disbursed on an annual or semi-annual basis. The interest subsidy on education loans is also offered to economically weaker sections of society i.e. for those students whose parents or guardians have an annual gross family income of Rs. 4.5 lakhs a year.
  • State Bank of Bikaner and Jaipur charges interest on educational loans at the rate of 11.55% for loans, regardless of the location of the course of study – within India or abroad. Again, the interest rate is the same whether studies take place within the country or outside of it.Loan applicants who are girls get an additional concession of 0.50% under the student loan scheme.
  • The education loan under the SBBJ student scheme provides coverage for the following expenses:
    • Fees to be paid to the university, school, college and hostel
    • Fees, the borrower may have to pay towards examinations and use of the educational institution’s library and laboratory
    • For borrowers who will be studying abroad, the education loan will also cover their travel expenses or passage money
    • The education loan will even cover the insurance premium if the student takes insurance
    • It will cover any caution deposit, building fund and refundable deposits as long as these are supported with corresponding bills or receipts issued by the institution
    • The loan covers expenses the student will incur for purchase of books, instruments, equipment and uniforms
    • If the student borrower requires a computer to complete his or her course, then the education loan will cover the expenses towards purchase of the computer at a reasonable cost
    • The loan also covers miscellaneous expenses incurred by the student borrower to complete the course such as expenses for study tours, project work, thesis, etc.
  • Scholarships and fee waivers received by the borrower will be considered and accounted for when State Bank of Bikaner and Jaipur computes the loan amount required by the applicant.

SBBJ Loan for Vocational Education and Training

State Bank of Bikaner and Jaipur also offers loans for vocational education and training to students who are desirous of pursuing craft vocations and skilled trades such as carpentry, plumbing, blacksmithing, repairing, nursing, accounting etc.

Eligibility Requirements for the SBBJ Education Loan

  • The loan for vocational education helps provide financial support to those who are eligible under the scheme and have the minimum educational qualifications required by the institution or organisation conducting the course
  • The bank provides loan for courses on a need-based basis to cover course expenses. The vocational training loan amount differs based on the duration of the course:
    • The loan amount is Rs. 20,000 for courses of duration up to 3 months
    • The loan amount is Rs. 50,000 for courses of duration between 3 to 6 months
    • The vocational education loan amount is Rs. 75,000 for courses of duration between 6 months to 1 year
    • For course span above 1 year, the loan for vocational education is Rs. 1,50,000
    • Under the loan scheme for vocational education and training, the bank may even sanction loans of higher amounts for specific courses, having duration more than 1 year which are offered by reputed institutions with better employment prospects
  • State Bank of Bikaner and Jaipur does not charge any margin money for SBBJ vocational education and training loans
  • No collateral or third party guarantee is required under the loan scheme for vocational education and training. However, the bank requires the parent to execute the loan document along with the student borrower as a joint borrower.
  • The SBBJ loan for vocational education and training has to be repaid in Equated Monthly Instalments (EMIs) after the moratorium period. The loan has to be repaid in 2 to 5 years for courses whose duration is up to 1 year, whereas courses whose duration is greater than 1 year have to be repaid in 3 to 7 years.
  • The interest rate for loan for vocational education and training is determined by the bank from time to time. The bank offers a discount of 0.50% in the rate of interest for girl students to encourage girls to take up higher education in vocational fields.
  • The bank does not charge any processing fee towards the loan scheme for vocational education and training
  • Other terms and conditions of the ‘IBA Model Educational Loan Scheme for pursuing higher education in India & Abroad’ apply to the ‘Model Loan Scheme for Vocational Education and Training’

SBBJ Education Loan Eligibility Requirements

  • The student applicant should have Indian nationality.
  • The applicant should have got admission to a higher education course in a recognised educational institution in India or abroad by way of an entrance test or merit based selection process after completing his or her higher secondary (HSC) i.e. 10+2 or its equivalent.

Documentation Required for the SBBJ Education Loan

  1. Student Eligibility
  • The student should be an Indian national.
  • The applicant should have got admission into a course run/supported by a government ministry / department / organisation or a society / company / organisation supported by the National Skill Development Corporation (NSDC) or State Skill Missions / State Skill Corporations. It will be preferred if the course leads to a certificate, diploma or degree, etc. which is issued by an organisation recognised/authorised by the government or a government organisation itself.
  1. Courses Eligibility
  • Skill development or vocational courses having duration starting from 2 months to 3 years and  run/supported by a government ministry / department / organisation or a society / company supported by the National Skill Development Corporation (NSDC) or State Skill Missions / State Skill Corporations. It will be preferred if the course leads to a certificate, diploma or degree, etc. which is issued by an organisation recognised/authorised by the government or a government organisation itself. State Level Coordination Committee (SLCC)/ State Level Bankers Committee (SLBC) are authorised to add other skill development courses or programmes which offer good employment prospects.
  1. Age Requirements
  • There is no specific age restriction for the student to be eligible for the loan. However, if the student is a minor while the parent executes documents for the loan, the bank will require a letter of ratification from the student upon attaining majority.

List of Charges

Fee

Education Loan

Loan Processing Charge

There is no additional charge or loan processing fee

No Dues Certificate/No Objection Certificate (NOC)

Nil

Duplicate of No Dues Certificate/NOC

Nil

Solvency Certificate

Not applicable

Credit Assessment Charges

Not applicable

Non-standard Repayment Charges

Not applicable

Legal/Incidental Charges

At applicable rates

Loan Cancellation Charges

Nil

Loan Documents Required for SBBJ Education Loan

Category

Applicant (Student)

Academic/Educational Documents

The loan applicant has to provide proof of admission to the course in the form of the admission letter he or she has received

 

The loan applicant has to furnish the mark sheet received from his or her last qualifying examination for school and graduate studies in India

 

The loan applicant has to provide the bank, a complete schedule of expenses that will be incurred during the course

 

The loan applicant has to provide the bank with photocopies or scanned copies of the letter received by him or her confirming scholarship, etc.

KYC (Know Your Customer) – These documents are required in case the loan applicant is not an existing customer of State Bank of Bikaner and Jaipur. If the applicant is already an existing customer with the bank, he or she may skip this as his/her details and records will already be with the bank.

The loan applicant has to establish his or her identity by providing proof of his/her age, signature, valid identity and residence proof. For this purpose, he or she may give photocopies or scanned copies of his/her passport, voter ID card or driving license.

Income Documents

Salaried

 

The loan applicant has to provide the previous 2 year’s Income Tax Returns (ITR) with computation of the borrower’s income

 

The loan applicant has to provide the salary account bank statements for the last 6 months

 

The loan applicant/borrower has to provide a brief statement mentioning his or her assets and liabilities

Others

The loan applicant has to submit a duly filled and attested loan application form

 

The loan applicant has to provide 2 latest passport sized photographs that have been signed across

 

The loan applicant has to provide supporting documents related to property if the borrower is offering property as security

 

If the loan applicant is going abroad, then he or she will have to submit copies of a foreign exchange permit

Documents required post sanctioning of the education loan

Loan Agreement

The loan applicant has to give the bank, a copy of the duly filled loan agreement signed by him or her

Stamp Duty

Documents for subsequent disbursements

Subsequent Disbursement Request Letter from applicant and co-applicant

University Fee Demand Letter

Applicant’s Academic Progress Report of previous semester

Revised Repayment Instructions – Post-dated Cheques (PDCs)/ Electronic Clearing System (ECS)/Standing Instructions (SI) plus 3 security PDCs in case of ECS or SI mode of repayment

EMI Calculator

  • Anshul has secured admission into a highly reputed engineering institute of the country. His fee is approximately Rs. 10 lakhs. In order to fund his education, Anshul approaches State Bank of Bikaner and Jaipur for an education loan. After meeting the bank officials and providing necessary documents, it is decided that he will receive an education loan of Rs. 10 lakhs with a repayment period of 15 years and an EMI of Rs. 12,163 at an interest rate of 12.25%.
  • Reena has got admission into a reputed university in America. She needs Rs. 18 lakh to cover her fees and living expenses. She visits the nearest State Bank of Bikaner and Jaipur branch for an education loan, which she receives after providing all the necessary documents. An education loan of Rs. 18 lakhs is provided to Reena at an interest rate of 11.75%. After the moratorium period, she will have to pay an EMI of Rs. 21,314 for 15 years.

 

Applicant

Loan Amount

Interest Rate

Tenure of Loan

Equated Monthly Instalment (EMI)

Anshul

Rs. 10 lakhs

12.25%

15 years

Rs. 12,163

Reena

Rs. 18 lakhs

11.75%

15 years

Rs. 21,314