Central Bank Education Loan For Abroad Studies | GyanDhan
Published date: 03 Nov 2020
Updated on: 03 Nov 2020
There are several education loan products available in the market to fund abroad education. While every lender offers lucrative loan products to the students, it is vital to make an informed decision. To help our readers with the same, we have written blogs on abroad education loans offered by various Indian lenders.
In this blog, we are discussing the education loan offered by the Central Bank of India, namely Cent Vidyarthi.
Without further ado, let’s start -
What are the loan eligibility criteria for the Central Bank of India Education Loan?
To apply for the Cent Vidyarthi Education loan from the Central Bank of India, the eligibility criteria are as follows -
The student should be an Indian national.
The student must have secured admission in a recognized and a reputed institution through an entrance test/merit-based selection process.
In case there is no entrance test, and the selection is through marks in the qualifying examination, the student should have secured at least 50% in the qualifying exam. There is a 10% relaxation for the SC/ST categories.
Which courses and universities are eligible for the Central Bank of India Education Loan?
The Cent Vidyarthi Education loan is given out to students attending recognized and reputed institutions. The university/college should be recognized by any of the Statutory bodies in India. Some of the eligible courses are as follows -
Graduation - For professional/technical courses offered by reputed colleges,
Post-graduation - MCA, MBA, MS, etc.,
Courses conducted by CIMA-London, CPA in the USA, etc.
Degree/diploma courses like aeronautical, pilot training, shipping, etc provided these are recognized by competent regulatory bodies in India.
What are the expenses covered in the Central Bank of India Abroad Education Loan?
Education is an expensive pursuit in this day and age, especially abroad education, which comes with its list of expenses. The Central Bank education loan covers nearly all the major expenses that are incurred. Some of them are -
Tuition fee payable to university/college/ school
Accommodation or Hostel fees
Examination/ Library/ Laboratory fee
Travel expenses/ passage money
Insurance premium for student borrower, if applicable
Caution deposit, Building fund/refundable deposit supported by Institution bills/receipts.
Purchase of books, equipment, instruments, uniforms
Purchase of computer, if required for completion of the course
Any other expense required to complete the course - like study tours, project work, thesis, etc.
The scholarships and fee waivers are taken into account when deciding the loan amount.
How much loan amount is possible under the Central Bank of India Abroad Education loan?
One of the best features of the Central Bank of India overseas education loan is that there is no upper cap on the maximum amount that a student can borrow. The student will have to pledge collateral of an equal amount to support the loan amount.
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What collateral is accepted by the Central Bank of India for abroad education loans?
Public sector banks offer secured education loans for an amount above INR 7.5 lakhs. For a loan amount up to INR 4 lakhs, the parents will have to sign as joint borrowers. If the loan amount is above INR 4 lakhs and up to INR 7.5 lakhs, the bank requires a third-person guarantor along with an estimate of the future earning potential of the student. For a loan amount above INR 7.5 lakhs, the applicant will pledge tangible security equivalent to the loan amount required. The kinds of collateral accepted by the bank are as follows -
Immovable property - flat, house, apartment, or a plot with a boundary,
Liquid assets - LIC Policy, Fixed Deposit, Government Bonds, etc.
The applicant can also pledge collateral belonging to a third-party, such as a relative or a friend if they do not have collateral to their/their parent’s name.
What is the Central Bank Education Loan interest rate?
The interest rate offered by the bank is REPO + 5% making the effective rate of interest as 9%. There is another 0.50% concession on the interest rate for female applicants, making the effective rate for them as 8.50%. The interest is calculated on a simple interest basis during the moratorium period and will be compounded after the end of the period.
Students can get an additional 1% concession if they service the interest during the moratorium period before the repayment commences.
Central Bank Education Loan Details
Maximum Loan Amount
No upper limit
Eligibility
Should be an Indian national
Should have secured admission in a recognized university
Should have at least minimum marks in the qualifying examination
Interest Rate
For male applicants - 9%
For female applicants - 8.50%
Margin Money
Up to INR 4 lakhs - NIL
Above INR 4 lakhs - 15%
Repayment Period
For loan up to INR 7.5 lakhs - 10 year
For loan above INR 7.5 lakhs - 15 year
Moratorium Period
Course period + 12 months, or 6 months after securing a job - whichever is earlier
Processing Fees
For loans up to INR 10 lakhs - INR 500
For loans above INR 10 lakhs - INR 1,000
What are the documents required for a Central Bank education loan for abroad studies?
The Central Bank education loan documents required would differ from case to case. There are some common documents required with the loan application are as follows -
Loan application form
KYC documents of the applicant and the co-applicant - PAN card, Voter ID
A valid passport
Identity proof
Address proof - Telephone bill / Electricity bill / Ration card / Property card
Education Qualification certificates of the student including mark sheets from 10th onwards
Proof of admission
Fee structure/estimate of education expenses from the university with year-wise and item-wise breakup
Proof of Income - Salary slips, IT Returns
Assets and Liabilities Statement of parents and guarantors
Details of collateral securities
The rest of the documents required for the loan would be communicated by the bank in the Sanction letter.
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What is the margin money in the Central Bank Education Loan for Abroad studies?
The margin money for education loans up to INR 4 lakhs is NIL. For a loan amount above INR 4 lakhs, the margin money is 15%.
What are the processing charges in the Central Bank Education Loan?
Another beneficial aspect of the Cent Vidyarthi education loan is that the processing fee is a mere INR 500 for loans up to INR 10 lakhs and INR 1,000 for a loan amount above INR 10 lakhs. The processing fee is charged during the application process but is refunded when the loan is availed by the student, which is within the 6 months of loan sanction.
How is the money disbursed in the Central Bank Abroad Education loan?
Once the loan formalities are completed, the students can request disbursement of the loan amount. The request should be made adequately before the fee submission date. On the request, the bank transfers the amount directly to the college/hostel/mess/airline, etc. The disbursement can also be made to the borrower in some cases. For that, the student will have to present appropriate evidence in the form of original receipts.
What is the repayment policy for the Central Bank education loan?
The repayment tenure for the Cent Vidyarthi education loan depends on the amount that is borrowed.
For loans up to INR 7.5 lakhs, the repayment period is a maximum of 10 years.
For loans above INR 7.5 lakhs, the repayment period is a maximum of 15 years.
Other than that, the repayment starts 12 months after the studies end or 6 months after securing a job, whichever is earlier.
How can GyanDhan help you get an education loan?
GyanDhan knows the value of the right education loan for the students. The right product could help you save up to INR 2 lakhs. Therefore, it is essential to understand the needs and requirements of the student. Our Education Loan Counselors ask detailed questions to help students make the right decision regarding a lender. It is only after an in-depth discussion that we suggest a lender to the student.
Not only this, our counselors go above and beyond to ensure that there are minimal hiccups in the process. If a problem arises, it is resolved swiftly by getting in touch with the right bank official. You can apply for the loan on GyanDhan’s portal and upload documents online. The status of the loan application can also be tracked on the dashboard of your GyanDhan account.
Best of all? All our services are free of charge for the students. You get expert advice and the best services - all without any cost. How to initiate the process? Just check your loan eligibility here and leave the rest to us!
This is a companion discussion topic for the original entry at https://www.gyandhan.com/blogs/central-bank-education-loan