Education Loan

SBI Education Loan

Overview:

State Bank of India is an Indian multinational financial services company that was founded in 1921. State Bank of India has an operational presence of over 14,000 branches in India serving millions of happy customers. The bank has a much diversified portfolio that includes services in personal banking, business banking and international banking services.
SBI Education Loan is of three categories – for studies in India and abroad, for studies in premier Indian institutions and loan for pursuing vocational education and training.

Features of SBI Education Loan:

Purpose:

SBI Student Loan scheme is offered to Indian nations for pursuing higher studies in India or at a foreign institution. SBI Scholar Loan scheme is offered to students who have secured admissions in premier Indian institutions. A separate loan scheme is offered for pursuing vocational education and training in India.

Expenses Considered for SBI Education Loan:

The following expenses are covered for both the student loan scheme and loan for vocational education.

  • Tuition and course fee
  • Examination, library and laboratory fees
  • Caution deposit
  • Cost of books, equipment and other instruments.

The following expenses are considered only for the student loan scheme and not for the vocational training loan.

  • Cost of a two wheeler up to Rs.50,000
  • Travel expenses and passage money for abroad studies
  • Caution deposit, building fund and other refundable deposit which amounts up to 10% of the tuition fees for the entire semester
  • Any other expenses required to complete the coursework like study tours, thesis, project etc.

Amount of Education Loan:

  • SBI Student Loan Scheme
    A maximum of Rs.10 lakhs is offered for studies in India. For studies abroad, a maximum of Rs.30 lakhs is offered as loan.
  • SBI Scholar Loan Scheme

Category of the educational institution Maximum Loan Limit
Without Security With Security
List AA Rs.30 Lakhs NA
List A Ra.20 lakhs Rs.30 lakhs
List B Rs.20 lakhs NA
List c Rs.7.5 lakhs Rs.30 lakhs

Loan Scheme for Vocational Education and Training For courses of period up to 6 months, loans up to Rs. 50,000 are provided. A maximum of Rs.1 lakh is provided as loan for courses of duration above 6 months

Interest Rates:

SBI Student Loan Scheme

Loan Amount Rate of Interest
Up to Rs.4 lakhs 3.50% above base rate
Above Rs.4 lakhs and up to Rs.7.5 lakhs 3.75% above base rate
Above Rs.7.50 lakhs 1.75% above base rat

The base rate is fixed at 9.85%. Do make an enquiry with the bank about the prevailing base rates. A concession of 0.50% is provided for girl students and a 1% concession is offered for full tenure of loan, if the interest is serviced promptly during moratorium and course period.
SBI Scholar Loan scheme

Type of Institution Interest Rate per annum
List AA 25 bps above base rate (10.10% at present)
List A 25 bps above base rate (10.10% at present)
List B For unsecured loan up to Rs.20 lakhs, 50 bps above base rate (10.35% at present)
List C 175 bps above base rate (11.60% at present)

For list B institutions, the interest rate is 25 bps if the collateral security provided is equal to or greater than the loan amount or if the applicant’s work experience is greater than two years. Do contact the bank for a comprehensive classification of the educational institutions as per the type AA, A, B or C.

SBI Loan for Vocational Education and Training
The rate of interest is fixed at 3.50% above the base rate of 9.85%

Processing Fee:

No processing fee is charged for SBI education loans.

Repayment Tenure:

SBI Student Loans

Maximum Loan Amount Repayment Period
Up to Rs.4 lakhs Up to 10 years
Above Rs.4 lakhs to up to Rs.7.5 lakhs Up to 10 years
Above Rs.7.5 lakhs Up to 12 years

SBI Scholar Education Loan
The maximum repayment tenure is 12 years. The repayment period starts after 6 months of course completion.
SBI Loan for Vocational Education and Training
For courses of duration up to 1 year, the repayment period can be up to 3 years. For courses of duration above 1 year, the repayment period can extend up to 5 years.

Security:

SBI Student Education Loan

Loan Amount Security
Up to Rs.4 lakh Parent or guardian as co-borrower
Above Rs.4 lakhs and to Rs.7.50 lakhs Parent or guardian as co-borrower and collateral security in the form of a third party guarantee
Above Rs.7.50 lakhs Parent or guardian as co-borrower and tangible collateral security

SBI Scholar Loan Scheme
Tangible collateral security of full value is to be provided and parent or guardian should sign up as co-borrower only to avail extra loan amount for list A and list C institutions. Loans can be availed without security also under the scholar scheme.
SBI Loan for Vocational Education and Training

No collateral or third party guarantee is taken. But, parents or guardian will have to execute the loan documents as co-borrower

Margin:
For SBI Student Loan Scheme, there is no margin for loans up to Rs.4 lakhs. For loans above Rs.4 lakhs, the margin is 5% for studies in India and 15% for studies abroad.

Eligible Courses:

  • SBI Student Education Loan
    For studies in India, graduation and post-graduation technical courses (degree and diploma) conducted by colleges approved by UGC, AICTE, IMC and the government of India are covered. Also, teacher training, nursing courses and other diploma courses like pilot training, shipping etc. as approved by the concerned regulatory authority are covered under the loan. For studies abroad, job-oriented professional graduate and post-graduate courses like MCA, MBA, MS, courses conducted by CIMA – London, CPA – USA are approved for loan.
  • SBI Scholar Loan Scheme
    Regular full-time degree and diploma courses for which the student is granted an admission through merit based admission process or entrance test is covered under the loan. Also, full time executive management courses like PGPX are approved for loan.
  • SBI Vocational Education and Training Loan

    • Vocational courses and skill development courses of duration 2 months to 3 years run by a government department or an organization supported by National Skill Development Corporation leading to a recognized Government organization are approved for the loan

List of Approved Educational Institutions:

The following documents are to be submitted to complete the application process.

  • For the SBI Student Scheme, educational institutions in India recognized by UGC/AICTE/IMC and government of India are approved. Reputed foreign institutions abroad, CIMA and CPA courses are also approved for loan.
  • SBI Scholar Loan scheme is provided for education in 93 premier Indian institutions. Contact the bank for the list of institutions that fall under the elite category.
  • Vocational, skill development courses offered by the government or an organization certified by the government is approved for loan under the SBI Vocational Education and training loan category.

Documentation required:

  • Letter of admission
  • Duly filled and signed loan application form
  • 2 recent passport size photographs
  • Statement of cost of study
  • PAN Card, AADHAR card of student and parent/guardian
  • Proof of identity and proof of residence
  • IT returns or IT assessment order of previous two years of the co-borrower
  • Statement of assets and liabilities of parent/guardian
  • Proof of income of parent/guardian

Eligibility:

The applicant should be an Indian national and should have secured an admission in a recognized educational institution. For SBI Scholar scheme, the student should have secured an admission in one of the 93 premier Indian institutions. Similarly, for Vocational Education loan, the student should have obtained an admission in a government certified training institute.

Central Government Interest Subsidy Scheme for Educational Loans:

The interest subsidy scheme has been announced by the MOHRD for providing interest on educational loans during moratorium for professional courses in India for students from economically weaker sections with gross annual parental income up to Rs.4.50 lakhs.
Some of the important features of this scheme are listed below.

  • This scheme is applicable only for recognized technical and professional course study in India.
  • The subsidy is provided for a period of 12 months after completion of course or six months after getting the job, whichever is earlier.
  • The interest subsidy is not available to students who discontinue the course mid-stream or who are expelled from the university.
  • The disbursement of interest subsidy claims to banks will be on half-yearly or yearly basis.

SBI Education Loan FAQs:

1.What documents do I have to submit to avail the interest subsidy?
In addition to the necessary loan documents, an income certificate issued by Income Certifying Authority designated by the State Government is required.

2.Can my spouse sign up as a co-applicant for my education loan?
Yes. Married applicants can designate their spouse as co-applicant.

3.How will the SBI education loan be disbursed?
The loan amount will be disbursed directly to the educational institution or the vendor as and when there is requirement.

4.What educational documents do I have to submit during application?
You might be asked to submit the HSC and SSLC certificates in addition to the degree mark sheet.

5.Is insurance cover necessary for SBI education loan?
Yes. Insurance covering the life of the borrower with the policy assigned in favour of SBI is mandatory while applying for education loan.