State Bank Of India Education Loan

State Bank of India (SBI) Education Loans

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 SBI

The State Bank of India, founded in 1806 is one of the largest and oldest commercial banks in Asia. It is a major banking and financial services public sector company with more than 24,000 branches and 59, 000 ATMs. It is the largest bank in India which has a 20% market share in deposits and loans among commercial banks, truly being a bank for every Indian.

An Introduction to SBI 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, SBI understands the needs of the students and offers extremely competitive education loans at better interest rates. Every year, many students secure admissions in top universities and colleges in India and abroad with SBI education loans.

Advantages of SBI Education Loan

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

• Low interest rate
• No hidden costs and administrative charges
• Less paperwork
• No processing fees
• No security required for up to 4 Lakhs
• 0.50% concession for girl students

Features of SBI Student Loan Scheme

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

Quantum of Loan: For studies in India, up to INR 10 Lakhs and for studies in abroad INR 20 Lakhs

Margin: No margin for up to INR 4 Lakhs and for above that limit, 5% of margin for studies in India and 15% for studies in abroad

Repayment Period: The tenure is up to 15 years after completing the course with 12 months of moratorium period.

Security: No security is required for up to INR 7.5 Lakhs and parents or a guardian can be a co-borrower. Tangible collateral is required for a loan above INR 7.5 Lakhs with parents or a guardian as a co-borrower.

Processing Fees: Nil

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
• Purchase of Books/Equipment/Instruments/Uniforms, Purchase of computers- essential for completion of the course (maximum 20% of the total tuition fees payable for completion of the course)
• Caution Deposit/Building Fund/Refundable Deposit (maximum 10% of tuition fees for the entire course)
• Travel Expenses/Passage money for studies abroad
• Cost of a Two-wheeler up to INR 50,000

Eligibility Criteria: Who Can Apply?

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

Interest Rate of SBI Student Loan Scheme:

Features of SBI Scholar Loan Scheme

Objective: To provide a loan to Indian students for pursuing higher education in select premier institutions

Quantum of Loan: Up to 35 Lakhs

Margin: No margin for up to INR 4 Lakhs and for above that limit, 5% of margin for studies in India and 15% for studies in abroad

Repayment Period: The tenure is up to 15 years after completing the course with 12 months of moratorium period.

Security: No security is required for up to INR 7.5 Lakhs and parents or a guardian can be a co-borrower. Tangible collateral is required for a loan above INR 7.5 Lakhs with parents or a guardian as a co-borrower.

Processing Fees: Nil

Courses Covered

• Regular full time Degree/ Diploma Courses through entrance test/ selection process.
• Full time Executive Management Courses like PGPX
• No Certificate/ Part time courses

Expenses Covered

• Fees payable to College/School/Hostel
• Examination/ Library/ Laboratory fees
• Purchase of Books/Equipment/Instruments
• Caution deposit / building fund/ refundable deposit supported by Institution bills/ receipts [not to exceed 10% of the tuition fees for the entire course].
• Travel expenses/expenses on exchange programme
• Purchase of computer/laptop
• Any other expenses related to education

Eligibility Criteria: Who Can Apply?

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

Interest Rate of SBI Student Loan Scheme:

Features of SBI Global Ed-Vantage Scheme

Objective: To provide loan to Indian students who wish to pursue education overseas

Quantum of Loan: From INR 20 Lakhs to INR 1.5 Crore

Margin: Scholarship and assistantship can be included in the margin.

Repayment Period: The tenure is up to 15 years after completing the course with 6 months of moratorium period.

Security: Tangible collateral required, and third party’s collateral also accepted

Processing Fees: INR 10,000 per application

Courses Covered

Regular Graduate/ Post Graduate/ Doctorate Courses in any discipline offered by foreign Institutes/ Universities in USA, UK, Canada, Australia, Europe, Singapore, Japan, Hong Kong and New Zealand

Expenses Covered

• Fee payable to college/school/hostel.
• Examination/Library/Laboratory fee.
• Travel expenses/passage money for studies abroad.
• Purchase of books/equipments/instruments/uniforms/ computer at reasonable cost, if required for course completion and any other expense required to complete the course– like study tours, project work, thesis, etc. can be considered for loan subject to the condition that these should be capped at 20% of the total tuition fees payable for completion of the course.
• Caution deposit /building fund/refundable deposit supported by Institution bills/receipts the amount considered for loan should not exceed 10% of the tuition fees for the entire course.
• Premium of ‘RiNn Rakhsha’ (IRDA License No: UIN: 111N078V01): Finance for ‘RiNn Rakhsha’ will improve insurance-coverage of the loan

Eligibility Criteria: Who Can Apply?

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

Interest Rate

Features of SBI Skill Loan Scheme

Objective: To provide term loan to Indian students for pursuing skill development courses in India

Quantum of Loan: Up to INR 1.5 Lakhs

Repayment Period: The tenure is up to 7 years after completing the course with 12 months of moratorium period for above 1-year courses and 6 months for up to 1-year course.

Security: No security is required, and third-party guarantee will be taken.

Processing Fees: Nil

Courses Covered

• Training Institutes/ Courses: Courses run by Industrial Training Institutes (ITIs), Polytechnics, training partners affiliated to National Skill Development Corporation (NSDC)/ Sector Skill Councils, State Skill Mission, State Skill Corporation, preferably leading to a certificate / diploma / degree issued by such organization as per National Skill Qualification Framework (NSQF) are eligible for a Skilling Loan.
• Schools recognized by Central or State Education Boards or Colleges affiliated to recognized university leading to a certificate / diploma / degree issued by such organization as per National Skill Qualification Framework (NSQF) is eligible for a Skilling Loan.

Expenses Covered

• Tuition / Course Fee
• Examination / Library / Laboratory fee
• Caution deposit
• Purchase of books, equipments and instruments

Interest Rate

Documents Required

• Letter of admission
• Filled in Loan Application Form
• 2 passport size photographs
• Statement of cost of study
• PAN Card of the student and Parent/ Guardian
• AADHAR Card of the student and Parent/ Guardian
• Proof of identity (Driving Licence/Passport/Aadhar/ any photo identity)
• Proof of residence (Driving Licence/Passport/Electricity bill/Telephone bill)
• Student/Co-borrower/ guarantor's bank account statement for last 6 months
• IT return/ IT assessment order, of previous 2 years of Parent/ Guardian/ other co-borrower (if IT Payee)
• Brief statement of assets & liabilities of Parent/ Guardian/ other co-borrower
• Proof of income (i.e. salary slips/ Form 16) Parent/ Guardian/ other co-borrower

EMI Payment Methods

SBI education loan can be repaid in following three ways.

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

Electronic Clearing Service (ECS): This mode can be used if you have a non-SBI account and would like your EMIs to be debited automatically at the end of the monthly cycle from this account.

Post-Dated Cheques (PDCs): You can submit post-dated EMI cheques from a non-SBI account at your nearest SBI Loan Centre. A fresh set of PDCs will have to be submitted in a timely manner. Please note Post Dated Cheques will be collected non-ECS locations only.

It is recommended that you opt for either the SI or ECS mode of payment for faster and less prone to error than the use of PDCs.

How to Apply for SBI Education Loan?

You can either apply online or visit a nearby SBI branch for the application. You can also download the education loan application form from the SBI 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.

SBI Education loan FAQ