Education Loan
  1. State Bank of India Profile

The importance of higher education and a professional degree from reputed educational institutions is growing in India. Along with the increasing awareness of significance of education to succeed in the knowledge economy, the cost for it is also rising enormously. In spite of this high expense, parents are still ready to bear the cost to fund their children’s education. The best way to go about it is through an education loan that funds their children’s learning and brightens their future. It is the most effective means to finance the higher education of your child.

Most of the banks in India provide a scheme for education loans, but its public sector banks and especially State Bank of India, is at forefront in giving education loans with maximum benefits to the borrower. State Bank of India is a government owned multinational financial service institution that was founded in 1921. The bank has a functional presence of over 14,000 branches in India, serving huge number of customers. It is one of the most trusted banks in the country. The bank has an assorted portfolio and apart from providing services in personal and international banking it also offers its very popular SBI education loan.

SBI education loan is divided into three different categories, offering three types of education loan to students, scholars and also for vocational training. The loans are designed to help students pursue higher studies both in India and abroad without having to worry about the necessary finance required for such studies since the bank takes care of the fees and other relevant course related expenses through the education loan.

2. Types of Education Loans Provided by State Bank of India

  1. SBI Student Loan Scheme: A kind of term loan offered to students who are Indian Nationals to pursue higher studies in India or abroad. The features of the loan are as follows:
  • No processing fee is required to be paid up front for SBI Student loan scheme. For loans above Rs. 4 lakh for studying abroad, an initial deposit of Rs. 5,000 is to be made with the bank. In case the loan is availed by the applicant, the deposited amount is adjusted towards the margin if applicable and if there is no margin required, the amount is adjusted against the interest payable on the loan. In case loan is not availed within 4 months of loan sanction, the amount deposited by the applicant will be appropriated by the bank.
  • The courses covered include most graduation/ post-graduation course including technical or professional degree or professional course study in India courses conducted by AICTE/UGC approved colleges and universities. Additionally regular degree or diploma courses of leading institutes like IIM, IIT, etc., teacher training or nursery courses approved by the Government and regular degree or diploma courses like pilot training, aeronautical, shipping, etc. that are approved by the respective regulatory body.
  • For studies abroad, courses covered are job-oriented technical or professional graduation/post-graduation courses and diploma courses like MBA, MCA, MS, etc. offered by approved universities and courses conducted by CIMA in London or CPA in USA, etc.
  • The loan covers expenses like fees payable to the college, school or hostel, examination library or laboratory fees, purchase of books, equipment, instruments, uniform or computers which are essential to complete the course subject to a maximum of 20% of the tuition fee, travel expenses or passage fee for studies abroad, cost of a two-wheeler up to a maximum of Rs. 50,000 and cost of other activities like study tours, project work, etc.
  • The maximum amount of loan available for studying in India is Rs. 10 lakh and for studying abroad is Rs. 30 lakh.
  • For loan amount up to Rs. 4 lakh only the parents will be required to act as a co-borrower for security requirements. Above Rs. 4 lakh and up to Rs. 7.5 lakh of loan, parents or guardian should be the co-borrower and a third party guarantee is required as a collateral security. The third party guarantee can be substituted with parent or guardian as the co-borrower if the gross annual income of the parent or guardian as per the latest IT returns is 3 times the availed loan amount. For loans above Rs. 7.5 lakh, the parent or guardian should act as a co-borrower and a tangible security will also be required. If the applicant is married, the co-borrower can be the spouse or the parent(s) or parents-in-law.
  • There is no margin requirement of loans up to Rs. 4 lakh. For loans above this amount, 5% margin is required for domestic studies while loans for overseas studies feature a 15% margin.
  • The repayment period for SBI Student Loan scheme is up to Rs. 7.5 lakh is 10 years and for a higher amount is 12 years. The repayment period will start either 1 year after course completion or 6 months post getting a job whichever is earlier
     
  • Eligibility: Education loan eligibility is very simple and clear.

Loan is issued to Indian nationals for studies in India and abroad if admission is already secured.

  •  Loan documents required
  • Letter of Admission
  • Completely filled Loan Application Form
  • 2 passport size photographs
  • Statement of cost of study
  • PAN card of the parent, student or legal guardian
  • Aadhar Card of the student and parent or guardian
  • Identity proof which may be a copy of Driving License or Passport or Aadhar Card
  • Residence Proof which may be copy of Driving License or Passport or Electricity Bill or Telephone bill
  • Student/co-borrower’s/Guarantor’s bank account statement of the last 6 months
  • IT Returns or IT Assessment Order of the last 2 years of parent or guardian or other co-borrower
  • Brief Assets and Liabilities Statement of parent or guardian or other co-borrower
  • Income proof which can be the salary slip or Form 16 of the parent or guardian
  • And other educational documents listed by the bank for SBI Student scheme.
  • Rate of interest: Listed below is the interest on educational loans offered on SBI education loan.

Loan amount

Interest Rate

Up to Rs. 4 lakh

3.65% above the Base Rate - 13.35%

Above Rs. 4 lakh and up to Rs. 7.5 lakh

3.90% above the Base Rate - 13.60%

Above Rs. 7.5 lakh

1.90% above the Base Rate - 11.60%

The Base Rate is 9.70% per annum for SBI education loan. Girl students are given a concession of 0.50% in interest rates. 1% concession is granted for the full loan tenure if interest is serviced promptly as and when applied during the moratorium period including the total course duration.

  1. SBI Scholar Loan Scheme: The loan is granted to students for pursuing higher studies in a select list of 105 premier Indian Institutes. The features of the loan are as follows:
  • There is no requirement of margin money and 100% financing is available under this SBI Scholar loan scheme.
  • No processing fee is charged from the applicant.
  • This SBI Scholar loan scheme is quickly sanctioned at designated Campus Branch or across 5000 branches in the country.
  • The SBI Scholar loan scheme covers courses which include regular full time degree or diploma course through entrance tests or selection process, full time Executive management courses like PGPX and does not cover certificate or part-time courses
  • The expenses covered under the SBI Scholar education loan include fees payable to college, school or hostel, examination, library or laboratory fees, purchase of books, equipment or instruments, caution deposit or building fund or refundable deposit receipts from institute or receipts which should not exceed 10% of the entire course’s tuition fee, travel expenses or expenses on exchange programs, purchase of computer of laptop, any other expenditure related to the course up to a maximum of Rs. 1 lakh.
  • For list AA category institutes the maximum loan amount is Rs. 30 lakh with the parent or guardian as the co-borrower, for List A category, the maximum loan amount is limited to Rs. 20 lakh with the parent or guardian as the co-borrower and Rs. 30 lakh with the co-borrower and also a tangible collateral security of full value of the loan. For List B category, the maximum loan amount is Rs. 20 lakh with the parent or guardian as the co-borrower. Finally, for List C category, the maximum limit is Rs. 7.5 lakh with the parent or guardian as the co-borrower and Rs. 30 lakh with the parent or guardian as the co-borrower and a tangible security pledged as collateral.
  • The repayment loan tenure is up to 12 years after the completion of the course plus a 6 months’ repayment holiday.
     
  • Eligibility: The eligibility for this SBI student education loan is slightly different from its other SBI education loans.

The loan is granted to students who are Indian Nationals and wish to pursue higher education in one of the Select 105 Premier Indian Institutes.

  • Documents required: Following documents are required for SBI education loans:
  • Letter of Admission
  • Completely filled Loan Application Form
  • 2 passport size photographs
  • Statement of cost of study
  • PAN card of the student and parent or guardian
  • Aadhar Card of the student and parent or guardian
  • Identity proof which may be a copy of Driving License or Passport or Aadhar Card
  • Residence Proof which may be copy of Driving License or Passport or Electricity Bill or Telephone bill.
  • Student / co-borrower’s/Guarantors bank account statement of the last 6 months.
  • IT Returns or IT Assessment Order of the last 2 years of parent or guardian or other co-borrower.
  • Brief Assets and Liabilities Statement of parent or guardian or other co-borrower.
  • Income proof which can be the salary slip or Form 16 of the parent or guardian.
     
  • Rate of interest

Category of Institutes

Interest Rate

List AA

25 bps above the Base Rate i.e. 9.95% p.a. for loans up to Rs. 30 lakh without collateral

List A

25 bps above the Base Rate i.e. 9.95% p.a. for loans up to Rs. 20 lakh and Rs. 30 lakh without collateral

List B

50 bps above the Base Rate i.e. 10.20% p.a. for loans up to Rs. 20 lakh without collateral

 

25 bps above Base Rate i.e. 9.95% if collateral security’s value is greater than loan amount and/or work experience of the applicant is more than 2 years

List C

175 bps above the Base Rate i.e. 11.45% p.a. for loans up to Rs. 30 lakh with collateral and 7.5 lakh without collateral

  1. SBI Loan for Vocational Education and Training: A term loan provided for securing vocational education or training in India where admission is already secured. The features are:
  • There is no requirement of margin money and 100% financing is available under this SBI vocational education and training loan.
  • No processing fee is charged from the applicant opting for vocational education loan and vocational training loan.
  • No third party guarantee or collateral is required to avail SBI loan for vocational education and training. Parents or guardian will act as the co-borrower and execute the loan documents jointly. Spouse may be added wherever applicable
  • This loan is granted to those students who have maximum qualification as required by educational institutions in India running vocational education and training courses.
  • There are no prepayment charges and the applicant can pre pay the loan if he has surplus funds to reduce the interest burden
  • The loan covers expenses like the tuition or course fee, examination, library or laboratory fee, caution deposit, purchase of books, equipment and instruments and any other expenses required for course completion
  • The maximum amount of education loan for vocational education and training courses with duration of up to 6 months is Rs. 50, 000 and for courses with duration of above 6 months, the amount is Rs. 1 lakh.
  • The moratorium period for vocational education and training courses up to 12 months is 6 months post the course completion and for courses above 12 months is 12 months post the course completion.
  • Repayment of the loan will commence 6 months after the course completion or getting a job whichever is earlier and will be up to 3 years for courses up to 12 months and 5 years for courses above 12 months.
  • It is mandatory to have an insurance policy on the life of the borrower and the policy should be assigned in favour of SBI.

Eligibility

The student should be an Indian National and should have secured admission in a course run or supported by a Ministry or a Department or organization of the Government or a company, society or organization supported by National Skill Development Corporation (NSDC) or Skill Missions / State Skill Corporations preferable leading to a Certificate or Degree or Diploma issued by a Government organization recognized or authorized by the Government to do so

Documents required: Listed below are the documents required for vocational education and training loan:

  • Letter of Admission
  • Completely filled Loan Application Form
  • 2 passport size photographs
  • Statement of cost of study
  • PAN card of the student and parent or guardian
  • Aadhar Card of the student and parent or guardian
  • Identity proof which may be a copy of Driving License or Passport or Aadhar Card
  • Residence Proof which may be copy of Driving License or Passport or Electricity Bill or Telephone bill
  • Student / co-borrower’s/Guarantors bank account statement of the last 6 months
  • IT Returns or IT Assessment Order of the last 2 years of parent or guardian or other co-borrower
  • Brief Assets and Liabilities Statement of parent or guardian or other co-borrower
  • Income proof which can be the salary slip or Form 16 of the parent or guardian
     
  • Rate of interest

The interest rate is 3.65% above the Base rate of 9.70% which makes the interest rate 13.35% p.a.

  1. SBI Global ED-Vantage scheme: SBI has launched a new student loan scheme to offer student loans for overseas education. The recent years have seen a stable increase in inquisition of financing studies in foreign universities. Students seeking for global exposures are trying for universities like Harvard, Stanford, and MIT. This student loan scheme provides financial assistance to students who are planning to complete their studies from the top global institutions. Some of its key features are as follows:
    • This is a collateral free loan with very less interest rate.
    • It cover courses both fulltime undergraduate and post graduate courses in the field of mathematics, science, engineering, medicines and management in organisations of USA, UK, Canada, Australia, Europe, Singapore and Japan.
    • The amount of education loan is upwards of Rs. 20 lakh and goes up to Rs. 1.5 crore with at up to 80% of the cost of programme being eligible for financing. There is a 0.5% concession for girl students.
    • Students will be provided 15 years for repayment of the loan, through EMIs after completion of their courses. They can start paying the EMI from the sixth month onwards since the course is completed.
    • Rate of interest is 1.70% above MCLR and currently is 10.85%.
       
  2. SBI Skill Loan Scheme: The bank has begun another student loan scheme for students who wish to gain specialised training in one specific field such as arts and crafts.
    • Rate of interest is 3.90% above MCLR and presently it is 13.05%.
    • Concession of 1% is provided for full tenure of the loan, if the interest charged is serviced promptly as and when applied during the period of moratorium and including during the period of the course.
       
  3. Central Government Interest Subsidy Scheme for Education Loans: This interest subsidy is provided by the Ministry of Human Resource Department and provides a lower interest on education loan during suspension period for professional courses in India. This scheme is especially well suited for students from economically weaker sections of society and whose gross annual parental income is less than Rs. 4.50 lakh.

3. Applying for an Education Loan from SBI through Paisabazaar

It is easy to apply for an education loan from SBI online by logging on to paisabazaar.com. Once on the home page, you can navigate to the education loan section and input some details about yourself to get the best education loan offers available to you. You can easily choose SBI education loan from the list to compare it with the other options and find out how SBI’s offer compares with the others. You may then choose to apply online for a SBI education loan through Paisabazaar by just providing a few additional details. Once your online application has been evaluated, you will be contacted by a State Bank of India representative to get all additional formalities completed.

4. List of Approved Educational Institutions:

  • For SBI Student education loan, educational institutions in India recognised under UGC / AICTE / IMC and are approved by Government of India. Recognized educational institutions in foreign countries and CIMA and CPA courses are approved for SBI education loans.
  • The SBI Scholar loan scheme is available for pursuing education courses in 105 premier educational institutions. You can always contact the bank to know the list of educational institutions which fall under this category.
  • Vocational and skill development courses or any other specialised course offered by the government or an organization which is either approved or certified by the government are the only ones eligible for which students can get a loan for vocational education.
SBI Education Loan
(4.5/5 ) 6 Reviews
Education LoanEducation Loan
5/5

Great services

I applied for a Global Ed-vantage scheme from SBI portal my loan got approved instantly and within few days I received my disbursal amount. I am very happy as a SBI customer.. My family has been using SBI services since the beginning. And I also have..Read more...

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Posted on: Jan 10 , 2017
Education LoanEducation Loan
5/5

Very Good

The loan scheme provided by SBI to help me pursue my Post Grads has very low interest rate of 9.55% only.  The bank has very good loan processing system and they require minimal documents. I also got a concession of 0.50% as a female student. Very..Read more...

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Posted on: Jan 10 , 2017
Education LoanEducation Loan
3/5

Good Bank

SBI is a very good bank and they have well trained professionals to solve any issue. My loan scheme from SBI got quick approval with very easy documentation process. Great services by SBI!

Male Profile Pic
Posted on: Jan 6 , 2017
Education LoanEducation Loan
4/5

Very low interest rate!!

My SBI Scholar loan scheme got approved at a very low interest rate and lowest processing fee. I am very eagerly waiting for my loan money so that I can quickly pay my first course fee installment. It was the first time I took any loan from SBI and i..Read more...

Male Profile Pic
Posted on: Jan 6 , 2017
Education LoanEducation Loan
5/5

Excellent loan scheme

I applied for this loan scheme to study in US for my PG in management. I got my loan approved at a very low interest rate of 10.75% p.a. I am already using SBI debit and credit card and I am very happy with the services of this bank. The bank has ver..Read more...

Male Profile Pic
Posted on: Jan 6 , 2017
Education LoanEducation Loan
5/5

Very low interest rate!!

My SBI Scholar loan scheme got approved at a very low interest rate and lowest processing fee. I am very eagerly waiting for my loan money so that I can quickly pay my first course fee installment. It was the first time I took any loan from SBI and i..Read more...

Male Profile Pic
Posted on: Jan 5 , 2017
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