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Education Loan
  1. HDFC Bank Educational Loan

Education has emerged as the cornerstone of human society and as the demand for education in order to gain a competitive advantage has increased, so has the cost of education both within India and overseas. With the view of providing today’s and future generations with the means of pursuing higher studies so that they can achieve their dreams, HDFC Bank has introduced its range of educational loans that aim to satisfy the requirements of every type of young individual who desires to pursue further studies.

2. Types of Educational Loans offered by HDFC Bank

HDFC bank offers 3 types of Educational Loans to suit the varying requirements of students who avail the education loan. The following are 3 major types of HDFC bank student education loans currently on offer:

  1. Education Loan for Indian Education
    Features:
  • The loan process is very fast with respect to sanction/disbursal. The documentation process is simple and the bank also provides for doorstep services for a hassle-free experience.
  • You need not worry about hidden education loan charges and the procedure is completely transparent. The charges are all mentioned in detail at the time of loan sanction.
  • Loans up to Rs. 7.5 lakhs may be obtained without any collateral or security requirements.
  • For higher amounts not exceeding Rs. 10 lakhs, collateral is required to be secured against the loan. The bank approved list of collaterals include property (residential), HDFC Bank Fixed Deposits, Life Insurance Policy, National savings Certificates, Kisan Vikas Patra to name a few.
  • Repayment period of HDFC education loan does not exceed 15 years after moratorium period completion. During the moratorium period or repayment holiday, no EMIs need to be paid by the borrower. The scheduled EMI payments are started subsequently.
  • Education Loan’s interest component is tax exempt under Section 80E of India’s Income Tax Act.
  • Once sanctioned, the bank disburses the loan directly to the Educational Institution according the fee structure that was submitted. The scheme thus focuses on the borrower’s further studies.
  • Along with the loan, the bank also provides additional services like a Savings Account.
  • The student can also opt for insuring themselves under the product Credit Protect which is offered by HDFC Life Insurance because you are a customer of HDFC Bank.
  • If the university or institute in which the student secures admission is among the top-rated universities or institutes, the bank allows preferential rates for such students availing the loan.
  • Loan repayment is supported through ECS as per standing instructions provided to the borrower’s bank/by direct account debit/by post-dated cheques.
  • A bank acceptable co-applicant is required while availing a loan for full-time courses.
  • An HDFC Bank loan for vocational education and training provides financial support to those who have minimum educational qualification.
  • The HDFC Bank vocational education and training loan decides on financing the students based on their employability and ability to repay the loan after they have completed the course, among others.
  • Eligibility

Education loan eligibility is almost same across all the banks. The following people are eligible to apply for an HDFC bank Education Loan for Indian Education:

  • The borrower needs to be an Indian resident in the age group of 16 years to 35 years
  • Collateral requirement would depend on the loan amount requested.
  • In case of full-time courses, a bank acceptable co-applicant is required.
     
  • Documentation

When applying for education loan, you should submit all the educational documents. These following documents are required to be submitted for availing the Education Loan:

Category

Applicant (Student)

Academic

Admission Letter from institute with Fee break-down along with SSC, HSC, Graduation Mark sheets.

KYC Documents

Age, Signature, Identity and Residence Proof

Income Documents

Salaried

Last 2 months’ salary slips showing joining date

Last 6 months’ bank statements of Salary Account

  •  

Last 2 years’ ITR with income computation

Last 2 years’ P/L Account and Balance Sheet

Last 6 months’ bank statements

Proof of Qualification

Others

Completely filled Application Form

Self-attested photograph

Post Sanction Documents

Loan agreement

Completed loan agreement signed by applicant as well as co-applicant

Repayment Instructions

ECS/PDCs or SI mandate

For ECS & SI modes of repayment, 3 Post Dated Cheques are required

Stamp Duty as applicable

Additional Documents for further disbursements:

 

 

  • Subsequent Disbursement Request Letter from applicant and co-applicant
  • Fee Demand Letter
  • Progress Report of applicant from the previous Semester
  • In case of Repayment Instruction revision – 3 security post dated cheques required plus ECS instruction for revision

 

  • List of charges

Fee

Education Loan

Loan Processing Charge

Maximum up to 1% of the loan amount as applicable

Pre-payment Charges

Up to 4% of outstanding balance prepaid in case of loan foreclosure or part-prepayment during the moratorium period. No charges will be applied if loan is part prepaid or foreclosed post moratorium period

NOC/ No Dues Certificate

NIL

Duplicate  “No Dues” Certificate or NOC

NIL

Solvency Certificate

NA

Late EMI payment charges

24% per annum on outstanding amount from the default date onwards

Charges for Cheque Swapping

Rs. 500 each time

Duplicate Repayment Schedule Charges

Rs.200

Loan Rebooking or Rescheduling Charges

Up to Rs.1000

EMI Return Charges

Rs.550 each instance

Legal / Incidental Charges

As per Actuals

Loan Cancellation Charges

NIL/Stamp Duty is retained

 

  1. Education Loan for Foreign Education

Education loans are issued in association with Credila which is India’s first dedicated Education Loans Company. Loans are offered for students pursuing studies abroad.

  • Loans are delivered to the student’s doorstep and they can find their eligibility before applying to universities.
  • Interest paid on education loan is exempt from tax under Section 80E of the Income Tax Act.
  • Loans with amounts of 20 lakhs and higher value are also available with the bank.
  • The loan processing and sanctioning process is one of the quickest and the bb
  • documentation involved is simple and convenient
  • The collateral terms are flexible so that the borrowers can avail up to 100% of the tuition fee as loan without any margin money requirements
  • The bank allows loan sanctions even before admission is granted so that the financial aspect of the studies can be planned in advance preventing last minute hassles.
  •  A professional course study in India from a reputed institution is more expensive as compared to others.  HDFC Bank education loan granted form Credila covers tuition fees, living expense, cost of books, laptop, travel, etc.
  • Co-borrowers who are from different cities are also accepted thereby breaking down geographical barriers in loan application
  • The bank also gives vocational education loans and vocational training loans to the students based on eligibility of the candidate and courses. The loan application form for this type of loan is also similar to other loan facilitated by the bank.
  • If the university or institute in which the student secures admission is among the top-rated universities or institutes, the bank allows preferential rates for such students availing the loan.
  • A co-applicant is required for full-time courses where the primary co-applicants can be parents, spouse or siblings and secondary co-applicants can be father-in-law, mother-in-law, brother-in-law, paternal/maternal uncle/aunt.
  • HDFC Bank student education loan is a pioneer in enabling students to have financial assistance so that they can make better choices with the educational institutions they want to study in.
     
  • Eligibility Criteria

The applicant must meet the following eligibility criteria to successfully avail an Education Loan:

  • He or she must be an Indian Resident residing in India.
  • The age of the applicant should be between 16-35 years
  • Collateral security may be required and co-applicant is also required for full-time courses.
    • Documentation

Category

Applicant (Student)

Academic

Institute Admission Letter with Fee break-up. USA Applicant I-20 Form and UK applicant CAS Letter

 

SSC, HSC, Graduation Mark sheets and also mark sheets of entrance exams like GRE/GMAT/TOEFL/IELTS

KYC (Know Your Customer)

Age Proof

 

Signature Proof

 

Identity Proof

 

Residence Proof

 

Signature verification – student /co-applicant like PAN Card, Aadhar Card, Passport, Credila’s completed Signature Authentication Form authenticated by bank or 10th / 12th or equivalent mark sheet with signature for student below 21 years

Income Documents

Salaried

 

Latest 3 Salary Slips showing date of joining details

 

Last 6 months’ bank statements of the Salary Account

 

Latest 1 year’s Form 16 from the employer with 1 year ITR

 

  •  

 

Last 2 years’ ITR with computation of Income

 

Last 2 years’ audited Balance Sheet and P/L Account

 

Last 8 months’ bank statements

 

Proof of Turnover (latest sales/Service Tax Returns)

 

Proof of Qualification for self-employed Professionals

Others

Completed Application Form

 

Latest photograph (signed across any document establishing relationship between student and co-applicant viz. ration card, marriage certificate, birth certificate, etc.

Post Sanction Documents

Loan agreement

Completed Loan Agreement signed by applicant and co-applicant

Repayment Instructions

ECS

 

7 security PDCs in case of ECS

Stamp Duty as per applicable laws

Documents for subsequent disbursements

Subsequent Disbursement Request Letter from applicant and co-applicant

University Fee Demand Letter

Applicant’s Academic Progress Report

Revised Repayment Instructions for ECS mode with 8 security cheques

 

  • List of charges

Fee

Education Loan

Charges for Loan Processing

Not over 1.5% of education loan amount sanctioned

Pre-payment Charges

Zero

NOC/ No Dues Certificate

Zero

Duplicate of No Dues Certificate / NOC

Zero

Certificate of Solvency

NA

EMI late payment penalty

2% additional every month on the unpaid EMI amount.

Credit Assessment Charges

NA

Non -standard repayment charges

NA

Cheque or ECS mandate or Direct Debit Swapping Charges

Rs.500 each time

Cheque/ECS/direct debit bouncing charges

Rs. 400 each time

Legal/Incidental Charges

As per actual

Loan Cancellation Charges

1% of unveiled sanctioned loan amount plus applicable taxes thereon

Manual cheque/payment collection charge

Rs.200 per visit

Loan a/c handling and updating charges

Rs.1500 per customer request

Document storage/Retrieval Charges

In case of non-collateral documents Rs.2000, otherwise Rs.4000

 

  1. Central Government Interest Subsidy Scheme
    • Features:
  • The loan is specifically designed for education needs of the weaker sections of the society. The Department of Education, Ministry of Human Resource Development, and Government of India launched an interest subsidy scheme with Canara Bank as the nodal bank. The scheme offers education loans to the weaker sections of the society at lower rates.
  • The loan processing and sanctioning process is one of the quickest and the documentation involved is simple and convenient
  • The charge structure is completely transparent in the sense that all the relevant charges are mentioned in writing upfront with no hidden charges anywhere in the loan sanctioning and disbursal process.
  • It also offers loan for vocational education, the purpose for which is to provide financial support to students for pursuing employment oriented skilled development programmes at an affordable price and with suitable terms and conditions.
    • Eligibility

The following individuals are eligible to avail a loan under the Central Government Interest Subsidy Scheme:

  • The scheme applies only to Educational Loans availed form Scheduled Banks for pursuing approved courses after Class 12th in technical and professional areas from recognized institutes in India under the Education Loan scheme of the IBA.
  • The recognized institutes in India consist of Educational Institutes established by Acts of Parliament, other institutions recognized by concerned Statutory Bodies, Indian Institute of Management (IIMs) and other institutes set up by the Central or State Government.
  • The annual gross income from all sources including those of the family and parents should be at an upper limit of Rs.4.5 lakhs. A certificate to this effect must be submitted issued by authorized officers of the State Government.
  • Full interest subsidy is allowed during the moratorium period.
    • Documentation

The following list of loan documents is required to be submitted under the scheme:

  • An original income certificate from a competent authority under the scheme.
  • An interest subsidy agreement
  • An original bonafide student letter issued by the institute
  • Stamp Duty / Franking Charges
  • Additional Interest Subsidy Details required 

3. Education loan interest rates:

The effectiveness and acceptability of a standard loan amount cannot be defined alone by just a single factor. There are many factors which affect the HDFC Bank student loan scheme and a competitive interest on educational loans is one of the more important factors with regards to such a loan. Generally in India, an education loan commands an interest rate from anywhere between 12% and 16% depending upon the bank’s base lending rates and various other factors.As directed by RBI, the base lending rates for banks in India is around 9-10%. Some private financial institutions offer interests on education loan based on their own base lending rates and the calculation for interest rate in such cases is done on case to case basis.

4. HDFC Bank Education Loan repayment options:

Like all other loan amounts, you have to pay an interest on your education loan as well. But unlike other loans, HDFC Bank education loans provide the option of a moratorium period. In simple words, it means a ‘repayment holiday’ where the borrower can suspend repayment of a loan until his or her education programme for which the loan was taken is completed. Not only this, but with an HDFC Bank student loan scheme you can also take loan for courses which means that you can take a loan for specific non-regular courses which you want to pursue.

Standard education loans usually provide three types of repayment alternatives:

  • Moratorium on Repayment: In this case, the bank provides a holiday for repaying the loan. This means that students can pay off the education loan after they have completed their studies. The banks ask for repayment of the amount of education loan within a period of 12 months after the student has finished his or her studies or within six months after he or she has got a job.
  • Moratorium on Principal Repayment: In this case, the bank asks the student to pay only the interest during the tenure of loan disbursement. He or she starts repaying off the principal with the interest only after they have completed their education.
  • Discounted Interest Rates: In this case, the student receives a discount on the interest rate if they begin repaying the loan amount immediately after the education loan disbursement. The discount varies from bank to bank and the student can do well to ask for the best rate from the bank.

Apart from these flexible repayment options, an HDFC bank student scheme also provides the option to avail insurance cover on the amount of the education loan if the student so wishes. The student loan scheme of HDFC Bank is excellent in customising the solutions, thereby facilitating quick and unique banking services for the bank’s customers.

HDFC Bank Education Loan
(4.3/5 ) 4 Reviews
Education LoanEducation Loan
3/5

Alright

The education loan scheme by HDFC bank is really good and it has very low interest rate of 9.60% only. The bank agents helped to me till the end of the whole loan process and to get my disbursal amount as soon as possible.. However, the loan document..Read more...

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Posted on: Jan 12 , 2017
Education LoanEducation Loan
5/5

Highly recommendable

The bank and its education loan schemes are highly recommendable. I applied for my education loan which was being offered at an interest rate of 9.55% only. The bank maintains transparency with all its charges and information. I would recommend HDFC ..Read more...

Male Profile Pic
Posted on: Jan 12 , 2017
Education LoanEducation Loan
5/5

Good schemes

I applied for my HDFC education loan and this was my first experience with HDFC and they have very good loan schemes. I applied for an education loan for my daughter for her graduation and the interest rates are very low. I also checked their other l..Read more...

Male Profile Pic
Posted on: Jan 10 , 2017
Education LoanEducation Loan
4/5

My dream came true with HDFC Education Loan

This bank helped me in pursuing MS from United states. I always wanted to continue studying even after my masters but financial shortage had always been a hurdle. I applied for HDFC Bank education loan and now I am super happy. Very happy with the se..Read more...

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Posted on: Dec 9 , 2016
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