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Education Loan
  1. IBA Model Education Loan Scheme – Higher Studies in India and Abroad
  • This Canara Bank education loan covers expenses including course fees, cost of books purchased, any necessary equipment or instruments, hostel fees, uniform, examination fees, insurance premium, passage and travel expenses for study overseas
  • This Canara Bank student loan scheme is available to students pursuing courses at the graduate and post graduate level including professional and technical courses having employment potential which are conducted by a recognized educational institution – college or university. Such educational institutions should be approved by the University Grants Commission (UGC)/ All India Council for Technical Education (AICTE)/ Department of Electronics/ IMC or any central/ state government agency. The student loan scheme also covers independent institutions like the Indian Institutes of Management (IIMs), Indian Institutes of Technology (IITs), etc.
  • This Canara Bank student education loan is also aimed at international technical and professional courses (at the graduate and post graduate level) with job orientation
  • This Canara Bank student loan scheme provides need-based finance. The amount of education loan depends on the college and type of course. However, the maximum loan amount for studies within India is Rs.10 lakh and Rs.20 lakh for studies abroad.
  • No margin is charged if the amount of education loan is up to Rs.4 lakh under this Canara Bank student scheme
  • If the size of the Canara Bank student education loan is above Rs.4 lakh, a margin of 5% is applicable for studies in India and 15% for studies abroad
  • The parent/ guardian has to be a joint applicant for such Canara Bank education loans and the assignment of all future salary of the student has to be agreed towards repayment of the loan
  • No collateral is required as security for a Canara Bank education loan up to Rs.4 lakh. However, a suitable and acceptable third party guarantee is mandatory if the loan amount is between Rs.4 and 7.5 lakh.
  • In the absence of a third party guarantee as collateral security, any other tangible asset(s) (either moveable or immoveable) will be accepted. In such cases, those applying for education loan should ensure that the margin on the security covers 100% of the Canara Bank education loan.
  • For Canara Bank education loans over Rs.7.5 lakh, the collateral security should be equal to 100% of the required loan amount
  • The repayment of the loan for courses has to begin 1 year after the completion of the course or 6 months after securing a job, whichever is earlier
  • The repayment of the principal amount along with interest on educational loans is done in equated monthly instalments (EMI). The maximum tenure of loan is 10 years if the Canara Bank education loan amount is up to Rs.7.5 lakh. For loan amounts greater than Rs.7.5 lakh, the loan has to be repaid within a term of 15 years.
  • A Canara Bank education loan can be availed from the nearest branch to permanent residence of the parent/ guardian 
  1. Model Loan Scheme – Vocational Education and Training
  • The Canara Bank loan for vocational education and training is available to students of Indian nationality who have secured admission in a vocational education and training course conducted or supported by a central or state ministry/ government/ department or an autonomous organization recognized by the government
  • Candidates should at least complete class 10th to become eligible for a Canara Bank vocational education and training loan
  • The Canara Bank loan for vocational education and training can be taken from the branch nearest to the permanent residence of the parent/ guardian
  • Vocational education and training courses which have a term of 2 months to 3 years are eligible for financing. Such courses should ideally provide a certificate/ degree/ diploma issued by a government organization or by an organization that is recognized and authorized by the government.
  • The vocational education loan covers expenses including tuition and course fees, caution deposit, cost of books purchased, any necessary equipment and instruments, hostel fees, cost of uniform, examination fees, library and laboratory fees, and any other relevant expenses needed to complete the course
  • Canara Bank vocational education and training loan is offered to deserving students on a need-basis
  • The maximum amount of loan for vocational education is Rs.20,000 for a course whose duration is up to 3 months. With zero margin, there is no requirement of a security/ collateral or third party guarantee. The repayment tenure offered for such a vocational training loan is between 2 to 5 years.
  • The maximum loan amount offered for courses spanning 3 to 6 months is Rs.50,000. There is no margin charged and no requirement of a security/ collateral or third party guarantee. The loan has to be repaid within 2 to 5 years.
  • For courses having a duration of 6 months to 1 year, a loan amounting to up to Rs.75,000 is offered. With nil margins on the loan, there is no requirement of a security/ collateral or third party guarantee. The repayment tenure for such a loan is between 2 to 5 years.
  • For courses which span over a year, the maximum loan amount offered is to the tune of Rs.1,50,000. There is no margin charged and there is no requirement of a security/ collateral or third party guarantee. Loans for courses above 1 year have to be paid within 3 to 7 years.
  • In all the above cases, the parent/ guardian has to be a co-applicant of the loan for vocational education along with the student borrower. The repayment of loan should begin after 6 months of course completion where the course duration is up to 1 year. For courses which have duration of more than 1 year, the repayment should start after 12 months post course completion. 
  1. Vidya Turant Scheme
  • Vidya Turant is an education loan product offered to students who have secured admission for professional courses in reputed institutions such as the Indian Institutes of Management (IIMs)/ Indian Institutes of Technology (IITs)/ National Institutes of Technology (NITs)/ Indian Institute of Science (IISc)/ Indian School of Business (ISB) – Hyderabad and Mohali, and other institutions of repute
  • The education loan eligibility guidelines for this Canara Bank student loan scheme states that the student should have Indian nationality. He/ she must clear the specified entrance test such as Common Admission Test (CAT), All India Engineering Entrance Examination (AIEEE), etc. conducted by a competent authority and gained admission to a prestigious institute.
  • The purpose of this Canara Bank student loan scheme is to provide financial assistance to needy as well as worthy students who need funds to pursue higher studies in known educational institutions
  • Students of IIMs/ IITs/ IISc/ NITs and other similar institutions are offered finance up to Rs.20 lakh. However, students of ISB can avail a loan of up to Rs.30 lakh.
     
  • The Vidya Turant loan covers the following expenses:
  1. Course fee, hostel fee, examination, library and laboratory fee, insurance premium
  2. Cost of books and uniforms purchased
  3. Any necessary equipment and instruments purchased including computer
  4. Expenses such as building fund, caution deposit, refundable deposit maintained by bills and receipts issued by the institution
  5. Any other expense incurred to complete the course – like project work, study tours, thesis, etc.
  6. Reasonable boarding and lodging charges for outside accommodation if the student chooses or is required to stay outside the campus
  • There is no margin for loans up to Rs.4 lakh. The margin for loans above Rs. 4 lakh is 5%. Scholarship and/ or assistantship is to be included in the margin. The margin is to be brought-in on a YoY basis when pay-outs are made on a pro-rata basis.
  • The interest rate on a Vidya Turant education loan is on the base rate – currently 10%. However, girl students are not given extra discount of 0.5% under this student loan scheme.
  • There is no requirement of security under this Canara Bank student education loan scheme
  • The parent/ guardian has to be joint applicant or a co-borrower in the loan and the assignment of all forthcoming income of the student has to be agreed upon towards repayment of the loan
  • There is zero processing fee and no upfront fee
  • The repayment of the loan is done in equated monthly instalments (EMI). The maximum repayment tenure for loans up to Rs. 7.5 lakh is 10 years and for loans greater than Rs. 7.5 lakh is 15 years.
  • In case the entire loan is repaid during the repayment period, no prepayment penalty is levied
  • This education loan can be availed at the branch closest to the permanent residence of the parent/ guardian. The educational documents have to be submitted as proof along with the loan application form.
  1. Vidya Sahay – Bridge Loan Scheme
  • This education bridge loan scheme is offered to students who are appearing for counselling sessions at CET centres
  • The purpose of this Canara Bank education loan is to provide financial assistance to meritorious students who have appeared for the Common Entrance Test (CET) conducted by the respective state governments, Central Board of Secondary Education (CBSE), Indian Institutes of Technology (IITs) and other such all India examinations. Students should have qualified the examination/ test and selected for a counselling session. They would be in needs of funds to make the down payment at the time of selection/ counselling.
  • The candidate should be an Indian national
  • The address and identity proof have to be provided along with other loan documents at the time of sanctioning of the bridge loan to comply with the Know Your Customer (KYC) norms
  • The finance offered under this scheme is a maximum of Rs.1 lakh or the initial payment proposed by the CET authorities, whichever amount is less
  • The rate of interest applicable for education loans under the Vidya Sahay scheme is 11.50% i.e. (base rate of 10% + 1.5%) with effect from 11th May 2015. The Differential Rate of Interest (DRI) is offered to those who qualify the DRI norms.
  • There is no margin charged under the Vidya Sahay scheme
  • There is no requirement of security or collateral in this education loan scheme
  • There is zero upfront or processing charge
  • The bridge loan is cleared post sanctioning of the regular education loan

Other Incentives on Education Loans

Central Sector Interest Subsidy Scheme for Educational Loans – Economically Weaker Sections

  1. The Central Scheme of Interest Subsidy is an incentive scheme offered by the Ministry of Human Resource Development (MHRD), Government of India to students belonging to the Economically Weaker Sections (EWS) of the society for education loans during the moratorium period for technical and professional course study in India
  2. This scheme is offered to only those students whose annual gross family/ parental income (from all sources) is not more than Rs.4.5 lakh so that deserving person is not denied a funding for professional education because he or she is poor. A certificate to this effect issued by authorized officers of the state government has to be submitted as proof.
  3. This scheme is independent of any other schemes which may also cater to the economically weak sections of society.
  4. The scheme is applicable for only those approved courses in professional and technical streams which are being offered by recognized institutions in India
  5. The funding is provided for the moratorium period which is the course duration plus 1 year or 6 months from the time of securing a job, whichever is before, as given under the Education Loan Scheme of Indian Bank’s Association (IBA)
  6. Once the moratorium period is over, the interest on the outstanding loan has to be paid by the student borrower as per the terms of the existing Education Loan Scheme
  7. The Ministry of Human Resource Development (MHRD), Government of India has issued an advisory to all the state governments requesting them to designate appropriate authority or authorities who are competent to issue income certificates based on the economic index only and not on the social background for the purpose of this scheme
  8. The interest subsidy under the scheme shall be available to the eligible students only once either for the first undergraduate degree course or the post graduate degree/ diploma in India. The interest subsidy shall, however, be admissible for integrated courses (graduate plus post graduate).
  9. The interest subsidy under the scheme is available to eligible students only once – either for their first undergraduate degree course or post graduate degree/ diploma in India. It, however, allows subsidy for integrated graduate plus post graduate courses.
  10. The interest subsidy is not available to students who have discontinued their course mid-way or those who have been expelled from the institutions on disciplinary or academic grounds
  11. The interest subsidy will be available if the discontinuation was due to medical reasons which is to the satisfaction of the head of the educational institution by submitting necessary documents
  12. The scheme is being implemented through Canara Bank which is the nodal bank for the Ministry of Human Resources Development

Padho Pardesh Interest Subsidy Scheme for Educational Loans – Minority Communities

  1. The Padho Pardesh Interest Subsidy Scheme has been formulated to provide interest subsidy to students belonging to the minority communities
  2. It is a Central Sector Scheme which aims to give interest subsidy to the meritorious students who belong communities which have been declared as minority communities as per the terms of Section 2 (C) of the National Commission of Minorities Act, 1995
  3. The scheme is available on the interest payable for the moratorium period for education loans taken for studies abroad at Masters and Ph.D. levels

Other Terms and Conditions

  1. The interest is accrued on monthly basis on simple interest basis during the gestation period or repayment holiday. The increased interest all through the repayment holiday period is to be added to the repayment and principal in fixed EMI.
  2. Penal Interest: For the loans above Rs. 2 lakh, a penal interest at 2% to be charged on the outstanding amount for the overdue period
  3. Educational loans are allowed by all branches of the bank as per guidelines given by the Indian Bank’s Association (IBA) in the Revised Model Educational Loan scheme for studies in India and abroad and New Educational Loan scheme for vocational courses
  4. The details of guidelines and list of accredited educational institutes considered by the bank for allowing educational loans to students are available in this site
  5. Candidates may submit applications at bank branches or through online application
  6. The loan processing i.e. sanction or rejection will be informed within 15 days of receipt of completed application along with supporting documents
  7. In the normal course of loan appraisal, the future earning potential of the course and its exposure to the student is duly considered
  8. Also, the percentage of income available for loan repayment will be taken into account
  9. Loans rejected for any reason will be with the accord of the controlling authority of the bank branch concerned and shall be accordingly informed to the student mentioning the reasons for rejection
  10. Students may apply for educational loans either at the nearest bank branch from residence of parents or nearest to the educational institution
  11. The service area approach is not espoused while sanctioning of the education loan
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