The KVB Educational Loan offered by the bank has the following features:
- It is a term loan which is repayable within a specified tenure
- Loan is given to students for higher studies either in India or Abroad
- KVB education loan is available to students who are Indian Nationals and who have availed admission to professional or technical courses in India through a Common Entrance Test or have secured admission to a Foreign University or Institution
- In case of individual applicants, the father or guarantor of the student will have to act as a guarantor. A guarantor is someone who guarantees to pay the loan himself/herself if the applicant fails to repay the loan himself. Under the Educational Loan scheme, the bank requires a guarantor who should undertake to guarantee the loan repayment.
- The maximum loan amount that an individual can avail for studying in India is Rs. 10 lakhs. For studying abroad, the maximum limit is extended and students can avail a loan of Rs. 20 lakhs at max for studying abroad.
- The bank does not keep any margin requirement for loans up to the value of Rs. 4 lakhs. For loans above the value of Rs. 4 lakh, a margin of 5% is required in case of loans availed for studying in India and a margin of 15% is required in case of loans availed for studying abroad
- The loan should be repaid within 5-7 years after the repayment holiday is completed. A repayment holiday is granted under the loan which includes the total course duration plus 1 year or 6 months after the student gets a job whichever is earlier
- If the loan amount is used to buy equipment or instruments, the corresponding equipment or instruments should be hypothecated to the bank as primary security.
- A collateral security is also required under the loan scheme which depends on the amount of loan availed.
- The bank also provides KVB vocational education and training loan to students pursuing vocational education and training courses from educational institutions.
- Loan for vocational education was started by the bank under the name KVB loan for vocational education and training after the modal scheme loan for vocational education and training was launched by the RBI.
- For loans up to Rs. 4 lakhs, no collateral is additionally required. Only the parent or guardian should act as a co-applicant
- For loans above Rs. 4 lakhs and up to Rs. 7.5 lakh, parents are required to act as co-applicants and a collateral security will also be required. The collateral security will be in the form of a third-party guarantee to undertake the repayment of the loan. The bank may waive off the requirement of a third party guarantee if the net worth of the parents as co-applicants or the means of parents acting as joint borrowers is satisfactory as per the bank’s standards
- For loans above the value of Rs. 7.5 lakh, parents will have to act as co-borrowers and a tangible security will be required as collateral the value of which should be sufficient to cover the loan. Moreover, the future income of the student should be assigned to the bank as for repayment purposes
- Students eligible under the Management quota are also eligible for the loan but they have to comply with other norms or guidelines with regard to the education loan eligibility criteria laid down by the State or Central Government.
- There are no processing charges under the KVB student loan scheme.
- All the expenses related to further studies are covered under the loan which include fees payable to the college, school or hostel, examination / library or laboratory fees, purchase of books / equipment / instruments or uniforms, caution deposit / building fund / refundable deposit if supported by the bills or receipt of the institution, travel related expenses or passage money for studying abroad, purchase of computers if it is essential in completing the course, any other expenses required to complete the course like project work, study tours, thesis, etc.
Rate of Interest:
The interest rate card on KVB student loan scheme is based on segregation by sector and gender. Interest rate may vary based on the course taken from educational institutions and the loan amount undertaken.
The bank charges the following rates of interest for its Educational Loan scheme:
Interest rate for boys
Interest rate for girls
Loans up to Rs. 7.5 lakh
One year MCLR+ 3.10%
One year MCLR + 2.60%
Loans above Rs. 7.5 lakhs and up to Rs. 10 lakhs for studying in India and up to Rs. 20 lakhs for studying abroad
One year MCLR + 2.85%
One year MCLR + 2.30%
Loans above Rs. 10 lakhs for studying in India and above Rs. 20 lakhs for studying abroad
One year MCLR + 2.60%
One year MCLR + 2.10%
As noted above, the actual interest rate on KVB education loan is a blend of MCLR (common of lending products) and a fixed constituent on the basis of the type of loans. Do inquire from the nearest branch for periodic offers and campaigns for specific degrees / programmes.
The KVB education loan has its own terms and conditions regarding collateral security. A snapshot of the slabs has been provided below for citation:
Security / Co-Applicant Details
Up to Rs. 4 lakh
From Rs. 4 lakh to Rs. 7.50 lakh
Over Rs. 7.50 lakh
Students undertaking vocational education and training and students who have secured admission using management quota are also eligible for KVB education loan on the basis of state, central or government norms.
A KVB education loan has a flexible repayment option and tenure ranging from 5 years to an upper limit of 7 years. The payment can be made in the form of monthly instalments. The repayment holiday period comes to an end upon completion of 1 year after the course or 6 months after getting a job, whichever is earlier. A student loan scheme generally has three repayment options available:
- Education loan with option of repayment holiday as explained in above lines.
- Only interest is paid during the loan tenure. Once you complete your studies, you start paying the EMIs that is principal + interest.
- Apart from this bendable repayment options, KVB education loans also provide insurance cover on the amount of education loan.