APJ Abdul Kalam once famously said, “education gives you wings to fly.” And, who amongst us does not want to fly! But in this desire to fly come various roadblocks and the biggest amongst them is the rising cost of education. However, like every cloud has a silver lining, this problem has a solution, and the solution is “Education Loan.” Today, Indian students can avail an education loan from numerous public and private banks as well as NBFCs. In this blog, let us look at the features of abroad education loans offered by State Bank of India (SBI). SBI is the top education loan disbursal agency in India.
Introduction to SBI Education Loan
State Bank of India needs no introduction! Majorly owned by the Government of India, it is the largest commercial bank in the country. SBI offers education loans to students for studying in India as well as abroad.
Read on to know why SBI education loan abroad is right for you in details.
Types of Education Loans Offered by SBI
Scholar Loan
Banks provide this loan to the students for pursuing higher education in select premiere institutes of India. They provide it for all regular full-time Degree and Diploma Courses. These courses require you to clear an entrance test or selection process to grant you the admission. Banks also offer this scheme for Full-time Executive Management Courses such as PGPX.
The scholar loan covers tuition fees as well as other related expenses. It covers charges of your hostel, examination, library, laboratory, books, and other expenses related to your education.
Students applying to study at colleges listed under list AA can get a maximum unsecured loan of INR 40 lakhs. The bank does not have any upper limit for secured loans. The tangible collateral, for these loans, needs to be of full value for admission in this category of the institute. Moreover, the co-borrower should be the student’s parents or guardians. For admission in List A colleges, students can get a maximum unsecured loan of INR 20 lakhs. The amount of the secured loan, for the same, is that of INR 30 lakhs. Students applying to colleges under List B can get a maximum unsecured loan of INR 20 lakhs. Similarly, students applying to colleges in List C can get an unsecured SBI Education Loan of INR 7.5 lakhs. The amount of secured loan, that they can avail is INR 30 lakhs.
Students applying for this loan do not have to pay any processing fee. Identically, the maximum time limit for repayment is 15 years after the course completion. The moratorium period is one year.
Global Ed-vantage
The SBI gives this education loan to students who wish to pursue a full-time regular course at a foreign university. Students applying to all regular Graduate, Postgraduate and Doctorate courses in any discipline can also apply for this loan. This facility also applies to the students studying in foreign universities like the USA, Canada, the UK, and many more. The loan covers expenses such as tuition fee, caution deposit, etc. Students applying for this loan can get a secured loan (with tangible security) of minimum INR 20 lakhs. Similarly, they can avail a maximum loan of INR 1.5 Crores, under this scheme. This loan includes all scholarships or financial assistance received during the study in the margin. Students have to pay a processing fee of INR 10, 000 for this loan. Students taking this loan can repay it in maximum fifteen years and the moratorium period is of 6 months.
Student Loan
Financial institutions offer this loan to Indian students for pursuing higher education in India and abroad. Banks give this loan to the students desirous of studying in India. All students pursuing undergraduate and postgraduate courses in Indian colleges fall under this discount. Only, the colleges must be UGC/ AICTE/IMC/Govt. approved. Financial institutions also give this loan for studying regular Degree and Diploma courses conducted by autonomous institutions such as IIMs. Students taking teacher training and nursing courses approved by the Central or the State Government are also eligible for this. Moreover. Students taking regular Degree and Diploma courses like a commercial pilot can also use this loan scheme. Only, once more, they should remember that the courses should be approved by the Director General of Civil Aviation/Shipping.
Students applying for education loan to study abroad must pursue job oriented professional or technical Graduation, Post Graduation and Diploma courses such as MBA, MCA, MS, etc that are offered by renowned universities. Students pursuing courses conducted by CIMA (London) and CPA (USA) can also apply for this loan.
The loan covers all the expenses related to the education tuition fees, living expenses, etc. Students taking a loan for studying in India can get a maximum loan of INR 10 lakh and a maximum loan of INR 20 lakhs for studying abroad. The bank also awards higher loan amounts for studying in India on a case-to-case basis. Students don’t need any collateral for the loan amounts up to INR 7.5 lakhs. Moreover, only parents or guardians need to be the co-borrower. For the loan amounts higher than INR 7.5 lakhs, you will have to attach tangible collateral along with parents or guardian as co-borrower.
There is no margin money for loan amounts up to INR 4 lakhs. For loans above INR 4 lakhs, the margin money for studying in India is 5% and for studying abroad is 15%. The maximum repayment period is 15 years and the moratorium period is 1 year.
Take-over of Education Loan
SBI also offers take-over of education loan. Students who have already taken an education loan at a high rate of interest from some other bank can transfer their loan to SBI under this scheme. SBI requires that the bank providing you the loan earlier must have completely disbursed it. Moreover, it also requires that the student be a major during take-over. Students who have already started repayment and are regular in paying their EMI in the book of the other bank can apply for this loan.
SBI bank takes over education loans of a minimum INR 10 lakhs and a maximum of INR 1.5 crores. This loan covers the sanctioned loan amount as well as any prepayment penalty. Furthermore, it also covers the limits that your earlier bank has sanctioned as top-up loans. The RoI for this scheme is 8.50% + spread of 1.50%. Additionally, SBI gives female students a concession of 0.50%. The bank also requires collateral of 100% of the value of the proposed loan amount. There is no processing fee charged for this loan.
Interest Rates
SBI education loan interest rate differs for the different kinds of loans that it offers. For the scholar loan, SBI provides the rate of interest for institutes in List AA as 8.50% + 0.20% spread. For institutes in List A such as IIMs and IITs, it is 8.50% + 0.35% while for other institutes under List A, RoI is 8.50% + 0.50%. Similarly, for all NITs under List B, the RoI is 8.50% + 0.50% while for other institutes in List B, the RoI is 8.50% + 1%. The NITs under List C avail the RoI of 8.50% + 0.5%. The RoI for other institutes in List C, it is 8.5% + 1.5%.
For the Global Ed-vantage scheme, the RoI for loan amounts greater than INR 20 lakhs and up to INR 1.5 Crore is 8.50% + 2.2.5%. The bank gives 0.5% concession for female students for this loan and also gives 0.50% concession for students who avail SBI Rinn Raksha or any other existing policy assigned in favor of the bank.
For the Student Loan Scheme, the RoI for up to INR 7.5 lakhs is 8.50% + spread of 2%. Students taking a loan of more than INR 7.5 lakh have to pay an interest rate of 8.5% + 2.25%. The bank gives female students a concession of 0.5% in this scheme too. It also gives 0.50% concession for students who avail SBI Rinn Raksha or any other existing policy assigned in favor of the bank.
Documents Required
The bank requires a list of documents to sanction an education loan. Though this differs from case to case, we list down a broad list of documents that are required by the bank. The list of these documents is as follows:
- Mark sheet of the last qualifying examination
- Proof of admission
- 2 passport size photographs
- List of expenses for the program
- Copies of letter confirming scholarship, if any, etc.
- If applicable, copies of foreign exchange permit
- Income tax assessment order not more than 2 years old
- Last six months bank account statement of the borrower
- A short statement of assets and liabilities of the borrower
- Students who are not an existing SBI customer would also need to establish their identity and give proof of residence.
We at GyanDhan provide a customized checklist of the documents needed so that students do not face any problems later.
Benefits
Taking an education loan from SBI has multiple benefits. Some of them are listed below:
- SBI Global Ed-vantage loan scheme has No prepayment penalty. It also makes you eligible for tax benefits under section 80E. Students have the chance of early approval of loan before i20 or visa when applying for this loan. This scheme also has Pre-visa disbursal as per the norms of visa offices.
- The student loan too has no prepayment penalty and covers the cost of education, both in India and abroad.
- The bank also has government schemes and Subsidies for weaker sections of the society.
- There is no geographical boundary when applying for SBI education loan. With more than 5000 selected loan branches across the country, students have easy accessibility to the bank.
- SBI’s takeover of education loan has top-up loan facility too.
How to Apply for the Loan
Students interested in applying for an SBI education loan can directly approach the bank. However, the process is filled with numerous roadblocks and is long and cumbersome. Also, many times, students are not clear about the documents they need to submit and end up making multiple trips to the branch. The other way out is to apply for an SBI education loan through GyanDhan.
GyanDhan’s loan application service is absolutely free of cost and is aimed at helping students get their education loan in minimum time. Not only do we provide our students with a customized list of SBI Education Loan Documents but also have a doorstep document collection service. Students from Delhi, Mumbai, Pune, Hyderabad, Bengaluru, and Chennai can get this service free of cost. With our help, students have a higher chance of getting their sanctioned as we approach the SBI officials for solutions when any problem arises. We help students at every stage of SBI education loan procedure and also have a Loan Eligibility Tool where students can check their loan eligibility. Not just that, we also have an education loan EMI calculator, where students can know the approximate EMI they would be paying for their education loan.
An education loan from SBI has various benefits and students should consider this bank when thinking of applying for an education loan. For more details on SBI education loan and how GyanDhan can help you, get in touch now.
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