SBI STUDENT LOAN

Saturday, March 10, 2012

Interest Free Student Loan

According to Press Information Bureau, Government of India, Cabinet Committee on Economic Affairs (CCEA) published on 27-August-2009 14:9 IST that a full interst subsidy will be provided during the period of moratorium on loans taken by students belonging to economically weaker sections from scheduled banks under the Student or Educational Loan Scheme of the Indian Banks’ Association, for pursuing any of the approved courses of studies in technical and professional streams, from recognized institutions in India

The Cabinet Committee on Economic Affairs (CCEA) has sanctioned a system to allow for full interest grant during the period of postponement on loans taken by students belonging to economically weaker sections from scheduled banks under the Student or Educational Loan schema of the Indian Banks’ Association, for following any of the approved courses of studies in technical and professional fields, from recognized institutions in India. The Indian Banks’ Association (IBA) had devised a comprehensive model student or educational loan scheme for adoption by all Banks, aimed at providing financial support from the banking system to eserving/meritorious students for pursuing higher education in India and abroad.

One of the prime concerns of the Government is to make sure that nobody is refused professional education because he or she is poor. The Hon’ble Prime Minister in his Independence Day Speech on 15th August, 2009 had, among other things, announced that “a new scheme will be started to help students form economically weaker sections of society by way of reduced interest rate on their education loans. This will benefit about 5 lakh students in getting technical and professional education”.

The broad parameters of the Scheme are:

(i) The scheme would be relevant for studies in technical and professional courses in India. The interest grant shall be linked with the existing Student or educational Loan Scheme of IBA and restricted to students enrolled in recognized professional courses (after Class XII) in India in Educational Institutions established by Acts of Parliament, other Institutions recognized by the concerned Statutory Bodies, Indian Institutes of Management (IIMs) and other institutions set up by the Central Government.

(ii) Under this system, interest payable by the student who is already availing of the Student or Educational Loan Scheme of the Indian Banks’ Association for the period of moratorium (i.e. course period, plus one year or six months after getting job, whichever is earlier) as dictated under the Student or Educational Loan Scheme of the Indian Banks’ Association, shall be carried by the Government. After the period of moratorium is over, the interest on the undischarged loan amount shall be paid by the student, in accordance with the plannings of the existing Educational Loan Scheme and as may be modified from time to time.

(iii) The benefits under the Scheme would be applicable to those students belonging to economically weaker sections, with an annual income upper limit of Rs. 4.5 lakh per year.

(iv) The interest grant under the Scheme shall be usable to the eligible students only once, either for the first undergraduate degree course or the post graduate degrees/diplomas. Interest subsidy shall, however, be admissible for combined undergraduate and post graduate courses.

(v) Interest grant under this scheme shall not be available for those students who either discontinue the course in the middle of the course undertaken , due to any reason except on medical grounds, or for those who are expelled from the Institutions on disciplinary or academic grounds.

(vi) The National Minorities Development & Finance Corporation (NMDFC) has an Student or Educational Loan Scheme for individual beneficiaries, which is enforced through State Chenelizing Agencies (SCAs). The national Safai Karamcharis Finance and Development Corporation under the Ministry of Social Justice and Empowerment also provides educational loan to the students of the target group for higher education. Interest on Educational Loan provided under these two schemes shall also be subsidized for the period of moratorium.

(vii) Sense modality for carrying out and supervising mechanism shall be finalized in consultation with the Canara Bank. There would be a tag/marker on the degree course or student indicating his repayment liabilities.

(viii) The scheme shall be applicable from the academic year 2009-2010.

The Scheme is anticipated to ease the financial load on the target group of students to go after technical and professional studies (after Class XII) in recognized institutions in India and thereby increase their admittance in these streams of education. This Scheme will benefit about 5 lakh students in getting technical and professional education.

You can read the Press Information Bureau HERE

Thursday, December 22, 2011

SBI Student loan -Tax benefit

I am welcoming all the Students and their parent and guardians who have taken Student or Education loan or proposing to avail the same from any bank in India for their child's higher studies in India or abroad to my this post and happy to inform all of you that you can get Income Tax rebate. It will be great help to those who are not aware of this benefit. Many of us may not be aware of the fact that the Tax exemption on the interest amount paid for the education loan can be availed. This can reduce the overall burden of cost on education or student loan.

You can refer to the section 80 E of Income Tax Act where detailed about this exemption has been explained. Once you have taken the education loan, you can claim deduction under section 80E of Income tax Act for the sum of interest paid on the loan amount. The amount of interest paid is eligible for deduction and you can deduct the whole interest from your taxable income.

Previously there was a restriction on the tax benefit to be deducted from the income. Only Rs.40,000.00 per year or the total amount including the principal and the interest paid during the year, which is less, was allowed as a tax benefit.

But the tax deduction is only available, if the purpose of loan is to pursue higher education to complete full time studies in graduate or post graduate course.This tax benefit on education or student loan are only available when you start the repayment and they are available only upto eight years. For example, if your loan repayment exceeds eight years, you cannot claim for deduction beyond eight years.

Hence it is wiser that the education or student loan is repaid within eight years. Unless the loan amount is very high and it is very hard to afford a high amount of equated monthly installment (EMI), one should not opt for education or student loan with longer period.

It may be noted that, this benefit is only available if the loan is taken from a financial institution or from a bank. Loan taken from friends or relatives will not be considered for tax benefits.

As per the provision in section 80E of Income Tax Act, any amount paid by you in the previous year, out of your taxable income, by way of repayment of loan, taken by you from any financial institution or any approved charitable institution for the pupose of pursuing higher education or interest on such loan, provided that the amount which may be so deducted shall not exceed Rs. 25,000.00.

The deduction mentioned in sub-section(1) shall be allowed to calculate the total income in respect of the initial assessment year and seven assessment years immediately after the initial assessment year or until loan referred to in sub-section (1) together with interest there on is paid by the assessee in full, whichever is earlier.

Monday, November 21, 2011

Online Student Loan

Online Student Loan:
Some of the banks in India has initiated to provide financial support as an Education Loan to needy students to pursue technical and professional courses. To provide “Education Loan” hassle free and without delay, all Indian Banks has simplified the process and have developed an “Online Application” to apply online for Student loan. However, some of the banks have not yet made Education Loan process online, in that case interested students will have to submit their filled application in their nearest bank’s branch.

Eligibility for Education Loan
Applicant must be an Indian National.
He must be over 18 years of age but within 30 years on the date of application.
Secured admission to Professional/ Technical courses through Entrance Test/ Selection Process .
The Loan Scheme would be applicable only for studies in recognized technical and professional courses in India and abroad.

The student applying apllying for the student loan should not have outstanding education loan from any other Institution. Branch nearest to the permanent residence of student will consider the loan.

Eligible Courses:

Studies in India (Indicative list):
Graduation courses: BA, B.Com, B. Sc etc.
Post Graduation courses: Masters and Ph.d
Professional courses: Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc.

Computer certificate courses of reputed institutes accredited to Department of Electronics or institutes affiliated to university

Courses like ICWA, CA, CFA, etc.

Courses conducted by IIM, IIT, IISc, XLRI, NIFT, NID and other Institutes set up by Central/State Government

Evening courses of approved institutes

Other courses leading to diploma/ degree, etc conducted by colleges/ universities approved by UGC/ Government/ AICTE/ AIBMS/ ICMR etc.

Courses offered by National Institutes and other reputed private institutions with prior approval of Head Office

Courses offered in India by reputed foreign universities with prior approval of Head Office

Note:
Professional courses not approved by AICTE and conducted by Institutes not recognized by State Universities is outside the purview of the eligibility under the scheme
Special scheme for students admitted to IITs, at concessional rate of interest
Studies abroad

Graduation: For job oriented professional/ technical courses offered by reputed universities
Post Graduation: MCA, MBA, MS etc.

Courses conducted by CIMA - London, CPA in USA, etc.

School Education/ Intermediate/ Graduation Courses/ Post Graduation Courses/ Professional Courses: Engineering/ Medical/ Agricultural/ Veterinary/ Dental/ Physiotherapy/ Nursing/ Law/ Management/ PGDRIM/ ICWA/CA/ CFA/ IIM/ IIT/IISC/XLRI/NIFT and other courses approved by State/ Central Government. All other courses leading to diploma/ degree etc., conducted by colleges/ universities approved by UGC/ Govt./ AICTE/ AIBMS/ ICMR etc., and offered by National Institutes and other reputed private institute
Maximum loan amount

Bank provides need based finance subject to repaying capacity of the parents/ students with a maximum of Rs. 10.00 laksLoan limit for studies in India- Maximum Rs.10.00 lakh. Loan limit for studies abroad- Maximum Rs. 20.00 lakh.

Margin for loan:
Upto Rs.04.00 Lakh : NilAbove Rs. 04.00 : 5%

Security for loan:
Upto Rs. 4 lakh : No securityAbove Rs.4 lakh & upto Rs.7.5 lakh: Collateral security in the form of a suitable third party guarantee.Above Rs.7.5 lakh: Collateral security of suitable value or at the discretion of the Bank, suitable third party guarantee along with the assignment of future income of the student for payment of installments

Note:The security can be in the form of land/ building/ Government Securities/ Public Sector Bonds/ NSC/ KVP/ LIP/ Banks Term Deposit etc, in the name of Student/ Parent/ Guardian/ Guarantor with suitable margin.

Mode of disbursement of loan
The loan amount should be released in proportion to the number of years, depending upon the progress of the student. The scholar should produce a certificate from the competent authority for successful completion of academic year for further releases.

Repayment of loan:
Repayment holiday/Moratorium : Course period + 1 year or 6 months after getting job, whichever is earlier. The loan is to be repaid in 5-7 years after commencement of repayment. But, loan period is varying from bank to bank and it determined on the basis of course.

Processing fee:
However, some banks does not charges processing fee for education loan whereas charging fees on actual.

Other conditions:
Loan to be disbursed in stages as per requirement/ demand, directly to the Institution/ Vendors of books/equipments/instruments to the extent possible
Student to produce mark list of previous term/ semester before availing next installment,
Student / Parent to provide latest mailing address, in case of any change,
Student /Parent have to inform branch immediately on change of course /completion of studies/ termination of studies/ any refund of fees by college/ institution/ successful placement/ intention of job/ change of job etc.,

Branch for sanction for loan:
Education loan is sanctioned by the branch nearest to the place of domicile of the borrower. However, if the student is seeking admission to an institute at a place other than the place of domicile/ residence of parent/ guardian and applicant desire to take loan at the place of educational institution, the loan can be considered by a branch at the place of educational institution, provided we have a branch at the place of domicile of the student/ parent/ guardian. The parent/ guardian and the guarantor (wherever applicable) along with student will visit the branch sanctioning/ disbursing the loan for completion of formalities and documentation.

Document required:
Completed application form
Mark sheet of last qualifying examination,
Proof of admission, schedule of expenses and duration of course,
Fee structure (Letter/Certificate from the College/University)
2 Passport size photograph
Identity proof (Passport/ ID Card/ Voter ID Card/ PAN Card etc) of student/ parent/ guardian and guarantor (wherever applicable)
Proof of residence (Xerox copies of Ration Card or Voters Identity Card or Passport or Electricity or Telephone bill or any such document acceptable to the bank)
Details regarding the guarantor (where loan amount is more than Rs 4 lakhs)
Proof of income of the borrower/ guarantor
Parent's/Guardian's Co-obligation statement
Declaration/ affidavit stating that no Educational Loan is availed from any other bank by the applicant and his parent

Margin (Above Rs.4.00 lakhs): For studies in India: 5%, For studies abroad: 15%
Title deed of the property or other securities and other related papers etc. (in case loan amount is more than Rs 7.50 lakhs)

Collateral, wherever required (LIC policy (surrender value of which should be not less than the loan amount at the time of availing the loan) /Share certificates/Units of UTI etc. Valuation certificate from Bank's approved panel valuer and legal opinion from Bank's panel advocate in case of land/buildings).

Application submission process for education loan:
All public sectors as well as private sector banks provides online facility to apply for education loan. Students/ Parents have choice to either apply through online mode or to submit filled application in nearest bank. After applying online for education loan, concerned student can also check the status of their application online.

Click on bank name to apply online for Education Loan / Student Loan:
Allahabad Bank
Andhra Bank
Axis Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
HDFC Bank
IDBI Bank
Indian Bank
Indian Overseas Bank
Jammu & Kashmir Bank
Oriental Bank of Commerce
Punjab & Sind Bank
Punjab National Bank
State Bank of Hyderabad
State Bank of India
State Bank of Bikaner & Jaipur
State Bank of Travancore
State Bank of Mysore
State Bank of Patiala
Syndicate Bank
Union Bank
United Bank of India
UCO Bank
Vijaya Bank

Note:: Loan amount depends on duration of course and institution and it varies from bank to bank and course to course. Also, rate of interest, processing fee, repayment of loan, margin and security for loan depends on individual bank’s policy.

Monday, August 9, 2010

SBI Education Loan Application Form

How to apply SBI Education Loan

Approach any State Bank of India nearest to your locality and request for the SBI Education Loan Application Form. Go through the form thoroughly and if you have any doubt about any column in the Loan Application Form, without any hesitation, get the doubts cleared from a bank employee and also get his help to fill up the Loan Application Form to avoid disapproval of the Loan Application From due to improper of filling up the Loan Application Form.

You can also download the SBI Education Loan Application Form by clicking here

For other details of the SBI Education Loan you can go through my other post

You can also apply for Student Loan to other Indian Banks other than SBI and to get the Student Loan application Form click the link below:
Student Education Loan Application Form from:
1. Allahabad Bank
2. Bank of Baroda
3. Canara Bank
4. HDFC Bank
5. Indian Bank

Tuesday, June 29, 2010

SBI Student Loan

The SBI (State Bank Of India) is one of the leading Nationalized Banks in India. SBI is actively engaged in community service banking. SBI also offers Student Loan to the desirous student Education Loan for higher studies in India or abroad. This facility provided by SBI has been giving a relieve to the needy student who is meritorious but want of money is in difficult situation to fulfill his desire to get higher education. Here comes forward SBI to help all those needy students to fulfill their ambitions by providing them Student Education loans.

Eligibility Criteria for grant of SBI Student Education Loan:

Loan is granted to only Indian Nationals.

Eligible Courses for SBI Student Education Loan:

All courses which are having employment prospects.
All Graduate, Post-Graduate and Professional Courses offered by the approved Institutions or Universities in India or Abroad.
Other courses leading to diploma, degree, etc. conducted by Colleges, Universities approved by UGC / Government / AICTE etc.

Expenses considered for SBI Student Education Loan:

Fees payable to College, School and Hostel.
Examination,Library and Laboratory fees.
Purchase of Books, Equipment, Instruments and Uniforms.
Caution Deposit, Building Fund and Refundable Deposit.
Travel Expenses, Passage money for studies abroad.
Purchase of Computer considered necessary for completion of course.
Cost of two wheeler upto Rs.50,000/-
Any other expenses required to complete the course like study tour, project work etc.

Limit of SBI Student Education Loan:
Student Loan is sanctioned to a limit of maximum:

Rs. 10 Lacs for studies in India.
Rs. 20 Lacs for studies in abroad.

Security Requirement For SBI Student Loan:

For loan amount upto Rs 4 lacs no security is required.
For loan amount above Rs.4 Lacs, the borrower should present a third party as a guarantee.
For loan amount above Rs.7.5 Lacs, the borrower should produce a material collateral security and assign the the future income of the student for paying installment.
The parent or guardian of the borrowing student should secure an education loan.
If the borrower is married, his or her spouse, parent-in-law or parent can act as the co-obligator.

Repayment of SBI Student Loan:

Repayment of loan can be started 6 months after getting job or one year after the course of study is completed whichever is earlier.

If the Place of Study is in India, then Education Loan amount is upto 7.5 Lacs, the repayment period is 5 to 7 years and if the education loan amount is above Rs. 7.5 lacs, the repayment period is 5 to 10 years.

If the Place of Study is in abroad, then education loan amount is upto Rs. 15 lacs, the repayment period is 5 to 7 years and if education loan amount is above Rs. 15 lacs, the repayment period is 5 to 10 years.

SBI Student Loan Interest Rate:
With effect from 29.06.2009 (SBAR 11.75%)

Loan amount upto Rs. 4 Lacs, the Rate of Interest is 0.50% below SBAR i.e. 11.25% p.a.
Loan amount above Rs. 4 Lacs and upto Rs. 7.50 Lacs, the Rate of Interest is 1.00% above SBAR i.e. 12.75% p.a.
Loan amount above Rs. 7.50 Lacs, the Rate of Interest is at SBAR i.e. 11.75%.

Note: An Interest Rate concession 0.50% is allowed to Girl Student availing SBI Student Education Loan.

SBI Student Loan Processing Fees:

There is no processing fee or upfront charges for Student Education Loan.
For Student Education Loan for studies abroad a deposit of Rs. 5000/- is required which is adjustable in the margin money.

SBI Student Loan Margin:

For loans upto Rs. 4.0 Lacs : no margin
For loans above Rs. 4.0 Lacs : (1) Studies in India : 5%, (2) Studies abroad : 15%

Documents Required For SBI Student Loan:

Completed Education Loan Application Form.
Mark Sheets of last qualifying examination.
Proof of Admission Scholarship, studentship etc.
Schedule of expenses for the specified course.
2 passport size photographs.
Borrower's Bank Account Statement for the last six months.
Income Tax Assessment order, of last 2 years.
Brief statement of assets and liabilities,of the co-borrower.
Proof of Income (i.e. Salary slips/ Form 16 etc.)

SBI Student Education Loan for ISM students:

SBI Student Education loans are also sanctioned to the students of ISB. An ISB student can take a loan upto 95% of the total costs. There is also a margin of 5% on the loan amount, and this needs to be repaid in 7 years. For detailed information on this SBI Student Loan scheme for ISB students, the branch at Hyderabad University Campus Branch may be contacted.

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