| Important Note: Indian Banks’ Association (IBA) has recently formed a working group to address the issue of student loans and the rising rate of default. The group has submitted its findings to the Reserve Bank of India and the main suggestion is to make it mandatory for parents or guardians, of the student borrowing loans, to be co-borrowers thereby making them liable for repayment.
Repayment - Course period + 1 year or 6 months after getting job, whichever is earlier.
What are the Documents required for applying a Student Loan ?
All students are required to submit mark sheets of last qualifying examination, poof of admission scholarship, schedule of expenses for the specified course, his/her bank account statement for the last six months, an income tax assessment order for the previous two years, a brief statement of assets and liabilities, of the co-borrower, which is usually the parent or guardian and proof of income, if any.
Some banks require all or any of the following documents as pre sanction documents:
To furnish the following documents along with the completed application form. Relevant information would relate to the guardian and the student both, when the loan is jointly taken.
- 1)Mark sheet of last qualifying examination for school and graduate studies in India
- 2)Proof of admission to the course
- 3)Schedule of expenses for the course
- 4)Copies of letter confirming scholarship, etc.
- 5)Copies of foreign exchange permit, if applicable.
- 6) 2 passport size photographs
- 7) Statement of Bank account for the last six months of borrower.
- 8) Income tax assessment order not more than 2 years old
- 9) Brief statement of assets and liabilities of borrower.
- 10)If you are not an existing bank customer you would also need to establish your identity and give proof of residence.
What is the Interest rate charged for Student/education loan ?
Most banks are vying with each other to aggressively market personal loans. The student loan segment is being viewed as vast untapped potential. Citibank and ICICI Bank are offering equally competitive schemes. Almost every prominent bank in the country has a student loan scheme in some form. What matters the most to an individual is obviously the cost of credit the terms and conditions for education loans. These, like any other loan, vary among banks. Besides pricing of the product, the most important thing is documentation requirement and the quality of service offered by the bank and the speed at which the loan is approved.
Some banks, such as SBI, also give you a choice between fixed and floating interest rate. Whereas, private and foreign banks offer loans with a fixed interest rate, some banks charge interest on a daily or monthly reducing balance.
Eligibility for getting a loan:
- The applicant should be an India National
- The applicant must have secured admission to professional/ technical courses through Entrance Test/ Selection process
- Secured admission to foreign university/ Institution
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