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Lok Sabha
Banks are providing educational loans to students pursuing higher studies in India and abroad. The following are the salient features of the educational loan scheme:
(i) Student Eligibility:
Should be an Indian National
Secured admission to Profession/Technial Courses in India or abroad through Entrance Test/Merit Based Selection process.
(ii) Courses Eligible:
Study Abroad:
Graduation: For job oriented Professional/Technical Courses offered by reputed Universities.
Post Graduation: MCA, MBA, MS etc.
Courses conducted by CIMA-London, CPA in USA etc.
(iii) Quantum of Finance: Need based finance subject to repaying capacity of the parents/students with margin and the following ceilings.
Maximum Loan: Rs. 15 Lakh
Margin: 15%
(iv) Security:
Upto Rs.4 Lakh: No Security
Above Rs.4 lakh and
Upto Rs.7.5 lakh: Collateral in the form of a suitable third party guarantee. The bank may, at its discretion, waive third party guarantee if satisfied with the net-worth/means of parent who would be executing the documents as joint borrower.
Above Rs.7.5 lakh: Collateral of suitable value or suitable third party guarantee alongwith the assignment of future income of the student for payment of installments.
(v) Interest rate: Upto Rs.4 lakh: BPLR
Above Rs.4 lakh: BPLR + 1%
Simple interest to be charged during replacement
Holding/moratorium period
(iv) Capability Certificate
Banks can also issue the capability certificate for students going aborad for higher studies. For this financial and other supporting documents may be obtained from applicant, if required.
No instances of widespread complaints that certain nationalized banks are still reluctant to sanction education loans for professional courses have come to the notice of the government. However, on receipt of any specific complaint against a particular bank necessary action is initiated to redress the complaint.
This information was given by Shri S.S. Palanimanickam, Minister of State for Finance in reply to a question raised by Shri Mohan Singh and Shri Chengara Surendran in Lok Sabha today.
BSC/BY/GN-295/05
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