Disbursement Process of SBI Education Loan | GyanDhan

by williamair1

Published date: 10 Feb 2020
Updated on: 06 Apr 2020

When the 2018 financial year came to a close, the portfolio size of study loan disbursals touched INR 82,600 Crore, climbing 9.25% in twelve months! The average loan amount disbursement to a student went from INR 6.8 Lakh to INR 9.6 Lakh at the same time.
These figures have risen even further this year.
But is the education loan disbursement process as easy as it appears from these statistics? The short answer is no. Once a student loan is sanctioned, the applicant still has a long road ahead. Adopting a laid-back attitude after loan approval leads to panic and rush at the eleventh hour. Whereas, the awareness of the entire loan disbursal process and preparing for it immediately after approval saves you energy and time. This blog exactly aims to do this - making our readers aware of the disbursement process of an SBI education loan. Keep reading to find a breakdown of the complete SBI education loan disbursement process.



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What are the Perks of an SBI Education Loan?

SBI, the biggest nationalised bank in the country, offers two study loan schemes for overseas education - SBI Global Ed-vantage and SBI Student Loan. Both come with a plethora of perks including the following:




Interest is Low.
Processing Fee is Nil or Minimal.
Repayment Period is 15 years Long.





Over and above, SBI offers a second top-up loan. This loan allows students to study a second course in their chosen country, and it extends the moratorium period too. The repayment of the loan starts 6 months after the completion of the second course


What Expenses do the SBI Education Loans Cover?



SBI student loans cover 90% of the expenses, including tuition, miscellaneous fees, books, equipment, accommodation, travel expenses, etc. The remaining 10% is considered as margin money.








What is Loan Margin Money? - Important to Understand Before the Disbursement.

Out of the total financial cost of studying abroad, the amount of money a student is supposed to bear is called loan margin. Since SBI is a public sector bank, the exact loan margin percentage depends upon the amount sanctioned.
Minimum, it is 10% of the entire expense.
Let’s say a student needs INR 100 from SBI to pay the tuition, and the margin set as per the loan amount sanctioned by the bank is 15%. Then the bank gives INR 85, and the balance tuition of INR 15 is paid out of the student’s pocket. You can read this blog to understand how SBI exactly calculates the margin money.
Using a more realistic case, if the complete expense of studying in the US for two years is INR 50 Lakh, and SBI sanctions INR 40 Lakhs, in that case, INR 10 Lakhs i.e. 20% becomes the margin money. The applicant pays it. All scholarships and fellowships are counted as part of margin money.




What Steps Need to be Taken Prior to SBI Loan Disbursement?



Before you reach the disbursement stage, you have to apply for the education loan and get your application approved. Here is a brief guide to applying for a student loan:


Fill the education loan application form online. (You can do it on our platform.)
Get a customised document check-list via email.
Submit the documents. (For all the metro cities, GyanDhan picks up the papers from your home. For other cities, we share the branch manager or relationship officer’s details via email.)
Verify the documents. (For all the further steps, a nominal processing fee is charged by banks, not GyanDhan)
The collateral’s legal evaluation and technical assessment are conducted by the bank’s valuators.
Both the applicant and co-applicant are evaluated based on the CIBIL score.
The precise loan amount is calculated.
If the education loan is approved, the bank offers a sanction letter which is valid for six months.












What Happens After the Education Loan Sanction?




Both the applicant and the co-applicant physically sign the sanction agreement.
Then a loan account is opened under the student’s name.
Understanding the terms and conditions attached to SBI’s sanction agreement and formalities of opening a loan account tends to overwhelm students. To ease the way and resolve queries swiftly, GyanDhan’s Relationship Officers are at your back and call.
The applicant submits all the original documents of the collateral. This creates a lien or equitable mortgage wherein the borrower deposits the title deed of the property as security in favour of the bank until the loan is fully repaid.





This stage of the education loan process is particularly challenging. Assembling property papers knackers even the best of people. We highly recommend taking the aid of our ROs when submitting the documents to smooth over any missteps.


Also, Read





What is the Education Loan Disbursement Process?



After the loan sanction letter formalities are finalized, students relax in the misbelief that the hard part of the loan process is done.
It is not. The next stage is equally, if not more, crucial.
The disbursement of funds begins now, and it takes place in 3 steps


Document Collection for Disbursement - The student arranges documents which act as proof of expenses. The amount the bank disburses hinges upon these documents. Therefore, it is critical to gather all the papers beforehand for incidentals that the bank has to cover. It avoids hassles of reimbursement. List of documents an applicant will need to submit for the student loan disbursal -


University’s demand letter with a clear fee structure.
In case the student has on-campus housing, the accommodation fee breakup. In case the student opts for off-campus stay, the rent agreement.
An estimate of average living costs. It includes food, clothing, study material, gadgets, and so on.
A guesstimate of miscellaneous charges. Always provide a clear breakdown encompassing health insurance, study aids, travel costs, and assorted incidentals.


Education Loan Disbursement Letter - After the bank has evidence of expenses, it issues a study loan disbursement letter containing the final loan amount to be paid out to the applicant. The disbursement letter has to be signed before disbursal.
Actual Disbursement - In the very last step of the education loan disbursement process, SBI pays the tuition fee by transferring the money directly to the university’s account. If the student chose on-campus housing, then that is sent too. For all other expenses such as off-campus accommodation charges and living costs, the funds are transferred to the student’s bank account. The student also has the option to get the funds loaded in a prepaid Forex card, provided that a clear breakdown is submitted upfront before disbursement.





Exceptional Case of Pre-Visa Disbursement

A common query during the student loan disbursement process is – ‘Will SBI disburse money from an education loan before a visa?’ The answer is yes if mandated.
For instance, Canada, Australia and New Zealand expect tuition fee deposit before the student visa is approved. Therefore, SBI offers pre-visa disbursement for all the three countries and sends the tuition directly to the chosen university or the block account as per the requirement.
From start to finish, the education loan process spans multiple phases. GyanDhan ensures that an applicant has assistance at every step. With our assigned loan counsellor, you can be assured that the loan application and progress is tracked vigilantly until the very end, i.e., loan disbursement.








What are the Benefits of Loan Disbursal in SBI?



If you take a look at how the loan amount in SBI Global Ed-vantage scheme is disbursed, the flexibility is apparent. That’s the advantage SBI brings. The living and other expenses are loaded onto the student’s account (if a precise estimate is given during sanctioning) and tuition and additional fees are transferred directly to the college. It even caters to the pre-visa disbursement mandates of certain countries like Germany and Canada.





What’s the Advantage of Using the GyanDhan Gateway for Education Loan?



When you pick the GyanDhan gateway for a student abroad loan, our loan counsellors put in the effort that otherwise would be required from your side. First, we ease the communication channel between you and the bank. Second, we immediately resolve any queries that inevitably crop up during the confusing procedure. Third, we keep a constant and attentive check on the loan disbursal progress.
The perks of availing assistance from an education loan counsellor don’t end here. The SBI loan process is long and prone to hurdles. Our loan officers unearth instant solutions to these snags. We even expedite the transfer of funds through third-parties such as GlobalPay and FlyWire, if needed by your preferred university.
Want the education loan disbursement process to take place quickly? Don’t want to manage the tedious task of ensuring that the monthly expenses are disbursed to your forex card or savings account? Use GyanDhan to apply for an SBI education loan. All it takes is a request for a callback!

This is a companion discussion topic for the original entry at https://www.gyandhan.com/blogs/disbursement-process-of-sbi-education-loan

30 replies

PandeyKomal

Do we need to submit the original documents of third party owned collateral?

vishakha.bhagia

Hi @Mishal_Kalladi

To get the disbursement for living expenses, you will have to submit an estimate.

Rest, I have forwarded your query to our Education Loan Counselor to confirm the maximum amount you can get for living expenses. I’ll update you as soon as I receive a reply. Thank you for your patience.

Harshvardhan_Tailor

I don’t have any previous backlogs and don’t have any amount left to disburse but I got the backlog in my last semester just now how will it affect

Sumuk

Thank you mam

AKSHAD_D

I have got my students education from sbi the first year fees is disbursed but i am having 3 backog subjest in 1st sem and they are not clear and recently i have appeard my 2nd sem exam

And and i may have 1 or 2 back log in this also. will the bank will disburse my 2nd year loan if yes then please tell me the process @AnanyaGhai @EducationLoan_Guru

vinz_Maheshwari

i took loan through vidyalakshmi portal in sbi. everything was going smoothly but due to covid i failed in one subject, although i have secured A’s in other subjects, branch manager is denying to disburse the remaining amount of loan, is it okay?

please reply asap. @vishakha.bhagia

Pulkit

https://discussions.gyandhan.com/useravatar/discussions.gyandhan.com/jatinmanra/48/2036_2.png
Jatin_Manra:

Hi, I want to take a loan of 4 lakhs through sbi

but I have some confusion, first, I have paid 1st year payments on my own, so will bank give the reimbursement to me?, secondly, can bank disburse this amount to my account and not University (as it is a small loan without margin or collateral), does it provide some flexibility? as I have some other expenses related to education such as laptops, electronics, travel, etc. too. please help.

Hi Jatin,

The State Bank of India will pay tuition fees directly to the university and will only transfer living expenses to the joint account of the student and co-applicant. Also, the bank does not offer reimbursements.

vishakha.bhagia

Hi @Ankit_Karmakar

After confirming from an SBI bank official, we got the following response -

If the student wants to cancel the education loan after just one semester, they will have to pay the amount due in one go during the loan closure.

So, when you go to the bank to request loan cancellation, you will have to pay the due amount to complete the process.

Hope this helps you. For any further questions, do post on the thread and I will get back to you. All the best!

vishakha.bhagia

@vinzmaheshwari333

Yes, after you give an explanation along with the previous semester’s mark sheet.

Arathy

Hi, I have some doubts about the disbursement process.

As I have taken an education loan in India one year ago and it was a third party guaranteed. My boyfriends father was the guarantor and me as an applicant and my mother as a co applicant. I have paid my first year fees through the loan and taken my living expense. Unfortunately I have signed my cheques for his father as he asked me to do that so he will pay my fees when am out of the country because my parents are not happy with the relationship and just joined with application to get a career for me by my hard request and wont be available all the time to help mr to pay my fees from country. I was not aware that the amount can be paid directly to university as i need to put 25% of my fees as margin and it usually disburse to my account and when am not there his father withdraw and paid from his account. My concern is - After one year me and my boyfriend was not in relationship and choose to seperate but he need the money to pay his fees to the university as he is also a student. without my proper consent and so much pressure I have send an mail like is there is any option to disburse my second year living expense. It was ot even my second year and it only 8 month passed and without my consent they send another ,mail from my mail id as it was being logged in to the laptop which is bought from the educaton loan. the bank has disbursed the amount on next day to my account and his father withdrawed the amount from my account with my signed blank cheque. I was not aware of these and just need to clarify whether there is any option for me to followup the amount, Its my second year and they have also cancelled my loan and blackmailed with the blank cheques to not breakup with his son. I dont know what I need to do. I came with a dream and was not ablt to cmplete my studies with these issues. ans also i havenot taken the amount and was not aware of anything and still the laptop covered under the loan is being with him. I am suffocated of the issue as I cant start repaying the loan right now. I wanted to finish my studies first. Is that okay? can i start repaying it after one year.? He and his father is blackmailing and threatening me like they need their home asap and need to pay evrything otherwise they gonna fire my parents house and put me in jail with the cheque. i have cancelled the cheques, my bank manager was aware of these at the startinga nd now he is transferred and was not able to followup. I am worried and tensed, I ned to complete my stuides, i cant pay all these amount which they have taken or atleast i need the prove or followup of that amounbt which I havenot used for my expenses. What are the consequences which i need to face now as they are saying that the case is filed agianst the loana nd i need to go to jail within a year? please advise me please

Kanik

I have just completed my second semester examinations and I think I might get 1-2 backlogs in this semester as I hadn’t prepared well as I was not well during my examinations. Will I be approved for the next semester loan disbursement if I provide them with a explanation and a last Semester marksheet with 7.4 CGPA.

vishakha.bhagia

Hi @AnushaVictoriaVeig

Yes, health insurance is covered in the loan amount. However. due to the COVID-19 pandemic, the bank is providing health insurance on a country-wise basis.

The best way to know if you qualify for this amount is to check your loan eligibility on our website. GyanDhan > Loans > Check loan eligibility. Our executive will get in touch with you in 6 working hours and discuss your loan needs.

I hope this answer helps you. For any further queries, do post on this thread. All the best!

Shruti1

If I want to pay the last year on my own can I do so? It won’t be a problem to the bank? As I already have an education loan and had paid fees through loan till 3rd year but Now I want to pay the rest on my own . The bank will not send the money of 4th year without my consent right?

vishakha.bhagia

@Mannat_Pandey,

Banks usually send the agreement over through email. Check the inbox of the registered email address. Or contact the bank to send you one on mail.

Hope this helps.

Ankit_Karmakar

If I have paid my first semester fees and then want to cancel my education loan, in how many days i have to pay the dues amount? in sbi

vishakha.bhagia

Yes, all the original documents pertaining to the property have to be submitted.

Ananya_Ghai

Hi suman,

No the bank does not verify your academic details from the college.

vinz_Maheshwari

so bank will have to disburse loan in case of second scenario. right?

Samuel_finny_Neethip

Property is estimated on market value or government estimated value? Usually government value is comparatively low from the market value.

What if we take the loan from international player, do we have to pay interest every month like NBFCs

adwaidh

Hi @Kanik

The answer to your question has already been in the discussion forum (dated 21st January 2021). Scroll a little down or use this link to see a detailed answer:

Disbursement Process of SBI Education Loan | GyanDhan

Disbursement Process of SBI Education Loan | GyanDhan Education Loans

Hi @vinz_Maheshwari,
There are two scenarios -
Scenario A - The Education loan is not yet active and there is no disbursement.
In this case, if the student has failed any subject and there is a backlog pending, the SBI will give you a conditional sanction stating that the loan amount will be disbursed only after the student shares the mark sheet with all clear status. It means that you will have to clear your backlog to get the loan amount disbursed.
Scenario B - The Education loan is active…

Let us know if you have any more questions.

Thank you.

Mannat_Pandey

How can I access my loan agreement online?

Punit_Chawda

Hello sir/ma’am,

I have applied education loan from SBI and my loan got approved. Now i am facing problems in disbursement. Here is the problem

My uni want payment through flywire but bank told me that we want bank details. Than we will pay via flywire.

They are paying via flywire then why they want bank details of uni. And my uni don’t want to share there bank details. What should I do in this situation

If any one know the solution plz tell

Thank you

vishakha.bhagia

Hi @Ankit_Karmakar

I have forwarded your query to our Education Laon Counselor. They will confirm the answer from an SBI bank official, which will be communicated to you by Monday (26th July).

Thank you for your patience.

vishakha.bhagia

Interest charged during the study period is simple interest. Though, moratorium period applicable in SBI education loan. The repayment starts after the study period + one year after course completion, which will be stipulated in your sanction letter.

You can choose to pay the interest charged during the moratorium period.

vishakha.bhagia

Hi @Mannat_Pandey,

I’m assuming you have taken the loan from SBI.

Please go through your loan agreement to check if the lender has mentioned margin money. If there is a section on margin money, then there is no other option than to make the payment. But if there is no mention of the margin money, then you can go to the Bank Manager to get this sorted.

Ideally, there is no margin money on loans up to INR 4 lakhs. But if it is mentioned in your loan agreement, then you have to do it.

Hope this helps!

Ananya_Ghai

Hello Sumuk,

Your intended program requires a collateral for an education loan. If you require a loan from the same lender where the loan is already approved then you need to clear your backlog and apply for disbursement.

Suman18

For second year disbursement, does they verify with college for verification?

Ananya_Ghai

Hi Akshad,

The bank will not disburse the funds for your second year until you clear the backlogs from your first year. It is important to successfully pass all your subjects to continue receiving financial support.

vishakha.bhagia

The collateral value is evaluated by authorized property evaluators in compliance with the Government rules and regulations of evaluation. As a result, it is generally lower than the market value.

To answer the second question - you will have to make interest payments during the study period on taking the education loan from international players. Though, some lenders do offer moratorium period to students. It is also beneficial to make these payments as they reduce your financial burden in the long run and shorten your loan tenure, thus saving you quite a lot of money that you’d be paying as interest.

vishakha.bhagia

Hi @vinz_Maheshwari,

There are two scenarios -

Scenario A - The Education loan is not yet active and there is no disbursement.

In this case, if the student has failed any subject and there is a backlog pending, the SBI will give you a conditional sanction stating that the loan amount will be disbursed only after the student shares the mark sheet with all clear status. It means that you will have to clear your backlog to get the loan amount disbursed.

Scenario B - The Education loan is active and the first disbursement has taken place.

In this case, if the student gets a backlog during the course, they have to give an explanation along with the demand letter for further disbursement. The bank will also ask for the mark sheet of the previous semester.

I hope this answers your doubt. If not, then please elaborate on your education loan a bit, so that I can provide an answer specific to your situation.

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