As the number of self financing institutions has escalated in the country over the past few years, the education expenditure has risen in almost all fields of study. These institutions either receive an insignificant amount from the government or no funds at all. It has definitely added up the troubles of the meritorious students.
The assistance provided by the public sector and private banks to pay off the expenses has certainly brought a relief to the students.
The study loans help to pay the university tuition, books and living expenses. Differing from other loans the interest rates are considerably lower than the other loans. Also the repayment of the loan is deferred while the students are pursuing their courses. For the amount paid against the interest of the education loan availed for the their own self, for his/her spouse or for children, a person is exempted for eight years from the year when the repayment of loan is started or for the duration the loan is in effect, whichever is more.
SBI laid the foundation of the education loan in 1995. Subsequently many other banks also started offering the student loans. There is an eligibility criterion for availing the education loan. Some of the requisites for the loan applicants are:
The person must be an Indian National.
It is available or the people in the 16-26 age group or any other age group specified by their specific banks
The parents or guardians must have a stable source of Income
The application for admission to a recognized university in India or abroad and the applicant must have a good academic background.
Discussed below are some basic details of SBI and PNB Education loans.
State Bank of India (SBI)
The bank offers the education loan for graduation courses, PG courses, Professional courses and other courses approved by UGC/ Government/ AICTE etc. The Indian Nationals who wish to pursue higher education in India or abroad must have secured admission to apply for loan.
SBI provides a maximum of Rs 10 lacs for studies in India which is repayable in 5-6 years starting from one year after completion of course or 6 months after securing a job, whichever is earlier.
A Rs 30 lacs loan for studies abroad which is repayable in 5-6 years starting from one year after completion of course or 6 months after securing a job, whichever is earlier.
For applying certain documents have to be presented to the bank like a Completed Education Loan Application Form, Mark sheets of last qualifying examination, Proof of admission scholarship, studentship etc, 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-borrowers Proof of Income (i.e. Salary slips/ Form 16) etc
The expenses considered for loan are Fees payable to college/school/hostel, Examination/ Library/ Laboratory fees, Purchase of books/equipments/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 and Any other expenses related to education
Punjab National Bank
The bank provides a maximum of Rs 10 lacs for studies in India which is repayable in monthly instalments .For studies abroad a maximum loan of Rs 20 lacs is provided
The following conditions must be fulfilled for applying:
a) The student should be an Indian National.
b) Admission should have been secured in a higher education course in recognized institutions in India or Abroad through Entrance Test/ Merit Based Selection process.
In case the admission is based on the marks secured in the qualifying examinations, there is a cut off percentage of 50% marks for the SC/ST and 60% for the general category.
The expenses that are covered under the loan are College / School / Hostel Fees, Examination / Library / Laboratory fee, Purchase of books / equipments / instruments / uniforms, Travel Expenses / Passage money for studies abroad, Purchase of computers at reasonable cost, if required for completion of the course, Insurance premium for student borrower.