IDBI Education Loan

IDBI Education Loan

What Is an Education Loan?

An Education loan is the loan or funds acquired by an individual to pursue higher studies in India or abroad. The loan repayment commences for the student after completing the education and a period of 6 months is given as grace period to students to get or join a job.

The repayment amount will be determined by your choice of interest, you need to decide how you want to repay the loan. That is if you want to start paying during the time of moratorium period itself or after the moratorium period. The Moratorium period is the time of your education plus 6 months or 1 year given to get a job. It is only after this time that you are expected to pay the loan.

The loan interest starts to accrue at the time of dispersal of funds, so at the time of your graduation you have a huge amount to repay. The other option is your parents or guardian can start paying the loan during the moratorium period itself where it is calculated as a simple interest.

This way your loan amount at the time of graduation is drastically reduced.

There are 4 types of education loans in India

1. Under Graduate education loan - These are given to students who have completed their secondary education and looking to do higher studies in the form of under graduation. It can be done in India or abroad.

2. Post graduate education loan - These are education loans given to individuals who want to pursue post-graduation after completing under graduation course from a reputed university/college. Here also the loan can be for studying in India or abroad.

3. Parents availing education loan - This is the case where the parents take loan for the education purposes of their children. This is an unsecured loan and need not be for graduate or post-graduation courses but also for elementary and higher secondary courses.

4. Career growth education loans - These are loans provided to young people who want to pursue courses or trainings, certifications that will benefit their career growth.

About IDBI

IDBI Bank is an Indian government-owned financial service company, formerly known as Industrial Development Bank of India, headquartered in Mumbai, India. It was established in 1964 by an Act of Parliament to provide credit and other financial facilities for the development of the fledgling Indian industry. IDBI is currently the 10th largest development bank in the world in terms of reach, with 3700 ATMs, 1995 branches, including one overseas branch at Dubai, and 1382 centers.

An Introduction to IDBI Education Loans

Education is one area where everybody is willing to spend a lot of money to live a prosperous life in the future. Being one of the major education loan providers, IDBI understands the needs of the students and offers extremely competitive education loans at better interest rates. Every year, a large number of students secure admissions in top universities and colleges in India and abroad with IDBI education loans.

Advantages of IDBI Education Loan

Following are some of the advantages of applying for an educational loan with IDBI.

• Low interest rate
• No hidden costs and administrative charges
• Less paperwork
• No processing fees
• No security required for up to 4 Lakhs

Features of IDBI Student Loan Scheme

Objective: To provide term loan to Indian students for pursuing higher education in India and abroad where admission has been secured. This loan is granted to students who are Indian nationals and having secured admission to a higher education course in recognized institutions in India or Abroad through Entrance Test /Merit Based selection process after completion of HSC (10 plus 2 or equivalent).

OR

Having secured admission under Management Quota although he/she was eligible to secure admission under the merit quota, i.e. having secured marks above the cut-off level required for admission on merit basis as specified for General / SC / ST / OBC / Girl students, for that educational institute/program.

Quantum of Loan:

Need based finance subject to repaying capacity of the parents/students with margin and the following ceilings:

a. Studies in India – Maximum Rs.20 Lakh

b. Studies abroad – Maximum Rs.30 Lakh

Note: In case of Executive programs in India and Abroad maximum finance should not exceed Rs.20 Lakh.

Repayment Period:

Moratorium period: Duration of the course period + 1 year

Repayment tenor: Repayment of the loan will be in equated monthly installments for a period of up to 15 years after completion of the moratorium period.

Security:

Up to Rs. 4 lakh: No security. Parent(s) to be joint borrower(s)

Above Rs. 4 lakh and up to Rs. 7.5 lakh: Third Party Guarantee besides Parent(s) being joint borrower(s)

Above Rs. 7.5 lakh: Parent(s) to be joint borrower(s). Tangible collateral security, along with the assignment of future income of the student for payment of installments.

Tangible Security:

In the form of immovable property in the name of student/ parent/guardian/ Co-applicant(s) which should have value of 1.33 times the amount of loan sought. Such security should not be an open plot or agricultural land engaged in cultivation activities.

OR

Any Fixed Income Security viz. Govt. securities/ Public Sector Bonds, NSC, Sr. No. Parameters Features KVP, LIC policy, debentures, Fixed Deposits with IDBI bank, etc. having fixed returns/ surrender value in the name of student/ parent/ guardian/Co-applicants). The minimum value of such security shall be 1.1 times of the loan sought after considering the margin requirement applicable for the loan against respective security instrument.

Courses Covered

Studies in India: 

• Graduation, Post-graduation including regular technical and professional Degree/Diploma courses conducted by colleges/universities approved by UGC/ AICTE/IMC/Govt. etc
• Regular Degree/ Diploma Courses conducted by autonomous institutions like IIT, IIM etc
• Teacher training/ Nursing courses approved by Central government or the State Government
• Regular Degree/Diploma Courses like Aeronautical, pilot training, shipping etc. approved by Director General of Civil Aviation/Shipping/ concerned regulatory authority

Studies Abroad:

•  Job oriented professional/ technical Graduation Degree courses/ Post Graduation Degree and Diploma courses like MCA, MBA, MS, etc offered by reputed universities
• Courses conducted by CIMA (Chartered Institute of Management Accountants) - London, CPA (Certified Public Accountant) in USA etc.

Expenses Covered

• Fees payable to college/school/hostel
• Examination/Library/Laboratory fees
• Caution deposit, Building fund / refundable deposit supported by
• Institution bills/receipts.
• Travel expenses/ passage money for studies abroad.
• Purchase of books/ equipment/ instruments/ uniforms.
• Purchase of computer at reasonable cost, if required for completion of the course.
• Any other expense required to complete the course - like study tours, project work, thesis, etc.
• Insurance premium for student borrower, if applicable.

Eligibility Criteria: Who Can Apply?

• Must be an Indian Resident
• Applicant should have secured admission with the educational institution

Education Loans for students studying in Premier Education Institutes

Objective: Granted to Students who are Indian Nationals studying in premier educational institutes like IIMs & ISB (Full time executive and regular programs only), IITs (full time engineering and management courses only) and, Top Medical Institutes, Indian Institute of Foreign Trade (IIFT), Top Management Colleges

Quantum of Loan:

Rs.30 Lakhs or 100 % of the total cost of the program (Inclusive of insurance cover) whichever is lower.

Security:

Co-applicant is mandatory in each case, irrespective of loan amount.

Collateral security:

No security for loans up to Rs. 30 lakhs for students who have secured admission to Indian School of Business (ISB)-Hyderabad and Mohali Campus and the following Indian Institutes of Management (IIMs): Ahmedabad, Bangalore, Kolkata, Kozhikode, Indore and Lucknow provided the loan applicant provides satisfying net worth/ means of the parent who is the joint borrower.

For other Premier Institutes:

Loans up to Rs.20 Lakhs: No security provided the loan applicant provides satisfying net worth/ means of the parent who is the joint borrower.

Loans exceeding Rs.20 Lakhs:

• Parent(s) to be joint borrower(s)
• Tangible collateral security, along with the assignment of future income of the student for payment of installments.

Repayment Period:

Moratorium period: Course period + 1 year. Repayment tenor: Repayment of the loan will be in equated monthly installments for a period of up to 15 years after completion of moratorium period.

Expenses Covered

• Fees payable to college/school/hostel
• Examination/Library/Laboratory fees
• Caution deposit, Building fund / refundable deposit supported by
• Institution bills/receipts.
• Travel expenses/ passage money for studies abroad.
• Purchase of books/ equipment/ instruments/ uniforms.
• Purchase of computer at reasonable cost, if required for completion of the course.
• Any other expense required to complete the course - like study tours, project work, thesis, etc.
• Insurance premium for student borrower, if applicable.

Education Loan for Chartered Account Course offered by ICAI, courses offered by ICWAI and ICSI

Granted to Students who are Indian Nationals pursuing Course offered by The Institute of Chartered Accountants of India (ICAI), the Institute of Cost and Works Accountants of India courses (ICWAI) and Institute of Company Secretaries of India (ICSI).

Quantum of Loan: Maximum Rs.3 Lakhs

Security:No security. Parent(s) to be joint borrower(s)

Repayment Period

Moratorium period: Course period + 1 year

Repayment tenor: Repayment of the loan will be in equated monthly installments for a period of up to 15 years after completion of moratorium period.

Expenses Covered

• The Loan will be available for initial registration fee payable to institute/examination fee/library fee for each course/stage
• Private Coaching fees will not be covered under the said EL.
• Purchase of Computers/ Laptop/ tablet, essential for completion of the course, will be allowed only after passing CPT. The loan amount for computer/ laptop not to exceed Rs. 40,000/-.
• Loan Amount for books, conveyance, etc. should be maximum up to total course registration fee.
• No finance for private tuitions. However, expenditure on Live Virtual
• Classes supported by institution bills/ receipts and cost of tuitions conducted by ICAI would be allowed.
• Charges paid to hostel/PG charges to be restricted to maximum up to total course registration fee

Education Loan Scheme for Students Secured Admission through Management Quota

Objective: To provide term loan to Indian students for pursuing higher education in India where admission has been secured

a. The applicant should be an Indian citizen and residing in India.

b. Confirmed admission through Management Quota.

c. Secured admission under management quota since he/she has not qualified for admission under merit quota.

Quantum of Loan: Maximum loan amount to be restricted up to Rs.10 Lakh

Moratorium period: Duration of the course plus 1 year. Simple interest to be charged during the period of moratorium.

Repayment period: Maximum up to 120 months excluding moratorium period

Security:

Tangible Security is mandatory irrespective of the loan amount.

The details of the security to be obtained are as under:

Tangible Security:

In the form of immovable property in the name of student/parent/ guardian/ Co-applicant(s) which should have value of 1.33 times the amount of loan sought. Such security should not be an open plot or agricultural land engaged in cultivation activities.

OR

Any Fixed Income Security viz. Govt. securities/ Public Sector Bonds, NSC, KVP, LIC policy, debentures, Fixed Deposits with IDBI bank, etc. having fixed returns/ surrender value in the name of student/ parent/ guardian/ Co-applicants). The minimum value of such security shall be 1.1 times of the loan sought after considering the margin requirement applicable for the loan against respective security instrument.

• In case of creation of mortgage of Immovable property such as Land/Building, the process for creation of security needs to be followed as per the Home Loan.
• In case of LIC policy, the surrender value at the time of sanctioning the facility to be considered for assessing the value of security.
• The residual maturity period of the policy should be equal to repayment tenure.
• In case of Fixed Deposit (FD), deposit has to be with IDBI Bank only. The residual tenor of such FD/ NSC should be equivalent to repayment tenor of the loan and lien created thereon. The NSC/ FD should be in the name either of the applicant/ co-applicant.
• In case of other securities, guidelines for loans against respective security shall be applicable.

Margin

15 % of the total cost of the program irrespective of the loan amount and place of study to be paid upfront before each disbursement. The disbursement may be in full or in stages as per requirement/ demand.

Processing Fees

1% of the loan amount applied subject to minimum of Rs.1,000/- plus taxes as applicable.

Penal charges: 2% on the overdue amount and overdue period.

Age Limit

Applicant: Minimum: No minimum age bar Maximum: 50 years at the time of loan maturity.

Co-applicant:

• Salaried – Minimum - 21 years and Maximum – 65 years (at the loan maturity);
• Self-employed – Minimum - 21 years and Maximum - 70 years (at loan maturity).
• Agriculturist – Minimum 21 years and Maximum - 70 years at the time loan maturity

Education Loan for Specialized Courses

Objective: Provide term loans for Indian nationals enrolled in job oriented courses/Skill enhancement courses/Career Advancement courses e.g. SAP, .net, C-DAC, Management programs for executives, professionals etc.

Quantum of Loan: Maximum: Rs.15 lakhs

Security:

Up to Rs.4 lakh: No security. Parent(s) to be joint borrower(s)

Above Rs.4 lakh and up to Rs. 7.5 lakh: Third Party Guarantee besides Parent(s) being joint borrower(s)

Above Rs.7.5 lakh:Parent(s) to be joint borrower(s). Tangible collateral security, along with the assignment of future income of the student for payment of installments.

Tangible Security:

a. In the form of immovable property in the name of student/ parent/ guardian/ Co-applicant(s) which should have value of 1.33 times the amount of loan sought. Such security should not be an open plot or agricultural land engaged in cultivation activities.

OR

Any Fixed Income Security viz. Govt. securities/ Public Sector Bonds, NSC, KVP, LIC policy, debentures, Fixed Deposits with IDBI bank, etc. having fixed returns/ surrender value in the name of student/ parent/ guardian/ Co-applicants). The minimum value of such security shall be 1.1 times of the loan sought after considering the margin requirement applicable for the loan against respective security instrument.

Repayment Period

• There will be no moratorium period/ repayment holiday.
• Repayment of the loan will be in equated monthly installments for a period of maximum 7 years.
• Interest servicing (Pre-EMI) option during course period available. In such cases the Pre-EMI period is restricted to Course period or 24 months whichever is earlier and EMI repayment period will be in 7 years after completion of Pre-EMI period.

Expenses Covered

• Fee payable to college/ school/ hostel*
• Examination/Library/Laboratory fees
• Caution deposit, Building fund / refundable deposit supported by
• Travel expenses/ passage money for studies abroad.
• Purchase of books/ equipment/ instruments/ uniforms.
• Purchase of computer at reasonable cost, if required for completion of the course.
• Any other expense required to complete the course - like study tours, project work, thesis, etc.
• Service Tax & Cess if applicable.
• Insurance premium for student borrower, if applicable.

General Terms & Conditions

Prepayment charges

For Management Quota Students:

Prepayment norms: Any number of times subject to minimum of Rs. 25,000/- 2% on the amount of prepayment to be charged if prepaid before 6 months from the date of commencement of EMI.

For all other variants:

Prepayment allowed anytime during repayment of the disbursed amount without prepayment/foreclosure charges.

Processing Fees:

For studies in India: NIL

For studies abroad: 1% of the loan amount subject to a maximum of Rs. 5000/- plus applicable taxes to be collected for studies abroad and refunded at the time of disbursement

Charges

a) Mortgages charges, Documentation/ Stamp charges: Actual expenses if any to be borne by the customer.

b) Charges for change of institution: Rs. 500/- + taxes

c) Enhancement in Loan Amount: Rs.500/- + taxes

Penal charges: Penal interest @ 2% p.a. to be charged for loans above Rs 4 Lakh for the overdue amount and overdue period (in terms of the repayment rules).

Co-applicant

Co-applicant is mandatory for all the loans. The loan documents should be executed by both, the student and the co-applicant/s. Parent (if parents deceased, grand-parents) should mandatorily join the loan as a co-applicant. In case parent/s are unable to join the loan as co-applicant due to genuine reasons, guardian or any relative (i.e. any member of the family such as brother, sister, grand-parents, spouse, father-in-law, mother-in-law, uncle and aunt (both maternal and paternal) or any other relative may join the loan as co-applicant, provided applicant submits sufficient proof of relationship.

Margin

• Scholarship /assistantship to be included in margin
• Margin may be brought in on year on year basis as and when disbursements are made on pro rata basis.

Disbursement

• Applicant’s contribution in terms of the margin to be paid upfront before each disbursement. The disbursement may be in full or in stages as per requirement /demand.
• Payment in favor of the Institute/ vendor of books/equipment /instruments (to the extent possible)

Documents Required

1. Completed application Form

2. A declaration/ affidavit from the borrower confirming that, no educational loans have been availed from other banks.

3. DPN

• For Applicant:
• Age Proof
• ID proof
• Address Proof
• Mark sheets of last qualifying examination
• Proof of admission (before disbursement), scholarship, etc.
• Schedule of expenses for the specified course

• For Co-applicant:
• Age Proof
• ID proof
• Signature proof
• Address Proof
• Employment or Business or Income Proof

• Income proof

Salaried (Any one of below)

i) Last 3 month salary slip

ii) Salary Account statement for last 3 months with salary credits.

If Income in addition to salary like pension, rent, etc. Is considered - documentary evidence viz. ITR or bank account statement or rent agreement, etc. To be obtained.

SEP and SENP – Audited/ CA Certified P & L and BS for last 2 years. Others –

Income Certificate by Competent Authority (Tahasildar and above, BPL Card issuing authority, etc.)

In case of education loan for studies in abroad, following documents are mandatory –

a) Self attested valid passport;

b) Self attested I 20 form (wherever available or any other document issued by the institute to the student for visa purposes)

Interest Rate of IDBI Student Loan Scheme:

EMI Payment Methods

Standing Instruction (SI): If you are an existing account holder with IDBI, Standing Instruction is the best mode of repayment. Your EMI amount will be debited automatically at the end of the monthly cycle from the IDBI account you specify.

How to Apply for IDBI Education Loan?

You can either apply online or visit a nearby IDBI branch for the application. You can also download the education loan application form from the IDBI official website, complete the form and submit it the bank representative.

You can also check your eligibility for an education loan through CreditMantri and apply for it.

IDBI Education loan FAQ