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Education Loan

Considering the tough competition the current generation is facing to gain employment, higher education has become highly important to enable students achieve their dream jobs. Thankfully, the youth have the option to avail the necessary funds for their education by opting for education loans. State Bank of Hyderabad caters to the rising need of education for youth and therefore provides education loans for studies in India and abroad. These loans are specially offered to meritorious students to offer them the necessary help required for pursuing their dreams.  
 

Types of Education Loans offered

State Bank of Hyderabad offers two types of education Loans for different needs and requirements of the students availing the loan. The following types of loans are offered by the bank:

State Bank of Hyderabad Education Loan

Features:

  • The loan process which involves sanction and disbursal is very easy, simple and fast and also it requires minimal documentation.
  • A co-applicant is required for availing of this loan. The co-applicant could be the student’s parents, siblings, spouse or family relative.
  • The loan process is very transparent and does not involve any type of hidden charge. As soon as the applicant reaches out to the bank with the loan application, all the applicable charges are mentioned upfront.
  • The maximum loan amount that can be availed by students for studies within India is Rs. 10 lakhs. The maximum loan amount that can be availed by students for studies abroad is Rs. 20 lakhs.
  • The limit for availing an unsecured loan is  Rs.4 lakhs. This means that for loan amounts upto Rs 4 lakhs no collateral or security is required. However, for loan amounts higher than Rs. 4 lakhs and up to Rs.7.5 lakhs, collateral security in the form of a third party guarantee must be provided
  • For amounts higher than Rs.7.5 lakhs, tangible collateral is required and the bank offers a wide range of valid collaterals which can be secured against the loan. The bank  has an approved list of collaterals which  include residential property, Government securities, Public Sector Bonds, Units of UTIs/ NSC/ KVP/ Life insurance policy, Gold, shares/debentures, bank deposits in the name of the student or parent. Along with the tangible security that should be of suitable value, the bank will accept assignment of the future income of the student for the payment of installments.
  • The repayment period for the loan extends up to 7 years post completion of the moratorium period. The moratorium period also referred to as repayment holiday is a period where the applicant need not pay any of the EMIs. The EMI payments starts, once the moratorium period is over, and in case of education loan, the repayment holiday extends for the total course duration and an additional 6 months or 1 year after the student gets a job whichever is earlier.
  • For loan amounts of up to Rs. 4 lakhs there is no margin on the loan. For loans that are above Rs. 4 lakhs, the margin is 5% when the studies are within India, while it is 15% when the studies are outside India.
  • Under the Section 80E of the Income Tax Act, the interest which is paid for the education loan is exempted from the tax computation process.
  • Once the loan is sanctioned, the loan amount is directly disbursed to the Institution as per the fee structure concerned, thus eliminating the need for the student to worry about the fees. Hence, the tuition and hostel fee will be disbursed directly by the bank to the institute.
  •  There are various methods by which an education loan can be repaid. It can be done via Electronic Clearing Systems (ECS) or by post-dated cheques. Also the banks may be instructed to debit the EMI amount from the specified Savings Account as and when they fall due.
  • Payment of interest during the study period is not mandatory with the State Bank of Hyderabad education Loan. However, if the loan applicant does choose to pay the interest during the study period, then he or she is eligible for a 1% rebate in interest rate, which will be reduced when the repayment of the principal amount commences. If the loan applicant chooses not to pay any interest during the study period then the outstanding interest for the moratorium period will be added to the loan amount at the time of commencement of repayment. The moratorium period is also called repayment holiday where the loan applicant does not pay any EMIs. After the moratorium period, the EMI payments start.
  • The loan applicant may apply and avail another education loan for further studies after completing the first course. For example, a student who took a loan for a Masters degree may approach the bank for a second loan for pursuing a PhD.
  • Education loan from the State Bank of Hyderabad considers the quality of the course or institution, requirements for studies and future income prospects of the loan applicant. The income of the parents or guardians is not a criterion while applying for this loan.

SBH Education Loan – Gyan Shakti

This new education loan scheme is offered by the State Bank of Hyderabad. This loan is offered to those meritorious students who want to pursue their courses in reputed institutions such as IIMs, IITs, NITs, AIIMs, etc.


Features:

  • The maximum loan amount available under this scheme is 30 lakhs.
  • For up to Rs. 10 lakhs, the bank does not require any  tangible security to be provided.
  • The repayment period is flexible.
  • The courses that are covered are regular/full-time Degree or Diploma courses from reputed institutions.
  • Under this loan scheme, there is an option available where the loan amount may be transferred to a branch of State Bank of Hyderabad that is closer to the borrower.
  • The rate of interest is 1.05% above the MCLR (11.75% per annum).
  • There are concessions on interest rates available under this loan scheme. They are as follows:
  • Girl students receive a 0.50% concession on the interest rate
  • There is a 0.50% concession for loan applicants who provide collateral security that is equal to or more than the loan amount
  • There is a 0.25% concession for loan applicants who have two or more years of work experience.
  • A co-applicant is required and that person may be parents, spouse or siblings and secondary co-applicants can be father-in-law, mother-in-law, brother-in-law, paternal/maternal uncle/aunt.
  • While computing the education loan amount, any scholarships, fees waiver, etc that is available to student borrower, will be considered and taken into account
     
  • The expenses covered in the State Bank of Hyderabad Education Loan are as follows:
    • Fees payable to the university/college/school/hostel
    • Examination/Library/Laboratory fees
    • Travel Expenses/passage money for students who are going out of the country on studies
    • Insurance premium for the student borrower, if applicable
    • Caution deposit/Building Fund/refundable deposit that are supported by Institution bills/receipts
    • Purchase of books/equipment/instruments/uniforms
    • Purchase of computer at reasonable cost, if required for the completion of the course
    • Any other expense related to the course – for example, study tours, project work, thesis, etc.
    • While computing the education loan amount, any scholarships, fees waiver, etc that is available to student borrower, will be considered and taken into account

Eligibility


The following people are eligible to apply for an Education Loan for Indian Education:
 

  • A person who is an Indian Resident which means that he has been residing in India.
  • He or she should have secured admission via entrance test/ selection process into a professional/technical course within the country, or to a university or institution outside of the country.

Eligible courses for State Bank of Hyderabad Educational Loan
 

  • For studies in India:
    • Graduation, Post-graduation – including technical and professional Degree/Diploma courses that are conducted by colleges or universities that are approved by the UGC/AICTE/IMC/Government, etc.
    • Regular courses that are conducted by autonomous institutes like IIMs, etc.
    • Teacher’s training/Nursing courses that have been approved by the Central Government or the State Government.
    • Regular Degree/Diploma courses like pilot training, aeronautical, shipping, etc as approved by the Director General of Civil Aviation/Shipping.
  • For studies abroad:
     
    • Graduation/Post graduation for job oriented professional/technical courses that are offered by reputed universities.

Rate of Interest

The rate of interest that is charged with the State Bank of Hyderabad Education Loan is 12.00% per annum for an education loan that is below Rs. 4 lakhs, whether the course is within the country or outside. The rate of interest charged on an education loan amount that is above Rs. 4 lakhs and up to Rs 7.5 lakhs, it  is 12.25% per annum; above Rs.7.5 lakhs the interest rate charged is 12.75%.This interest rate is the same for both within India and abroad.


Documentation
 

Category

Applicant (Student)

Academic

Proof of admission to the course (Admission Letter)

 

Applicant’s mark sheet of his or her last qualifying examination for school and graduate studies in India

 

Schedule of expenses for the course

 

Copies of letter confirming the applicant’s scholarship, etc

KYC (Know Your Customer) – If the loan applicant is not an existing bank customer, they will have to produce these documents. Existing customers do not have  to provide fresh documents and may skip the KYC process.

Age Proof, Signature Proof, Identity Proof, and Residence Proof - Copy of Passport / Voter ID card / Driving License. Any one of these documents can be submitted as a valid Identity Proof because all the listed documents have the individual’s photograph along with his or her name against the photograph proving the identity of the applicant

Income Documents

Salaried

 

Last 2 years’ ITR with computation of Income

 

Last 6 months’ bank statements of the Salary Account

 

Brief statement of assets and liabilities of the borrower

Others

Completed Application Form

 

Two Latest photograph (signed across)

 

Documents related to the property that is being offered as security

 

Copies of foreign exchange permit, if it is applicable

Post Sanction Documents

Loan agreement

Completed Loan Agreement signed by applicant and co-applicant

Stamp Duty as per applicable laws