Education loan for study abroad from Indian Bank for Indian students


The Indian Bank is a Public Sector Bank and it offers education loan to students for studies abroad. The education loan can be availed by any Indian student who has secured admission in a university overseas.

Studying abroad is no longer restricted to the children of the rich and the elite. Today, even the common man's child strives to get into a university overseas. The importance of good education from reputed foreign institutions is also not lost on parents. They leave no stone unturned to ensure that their offspring live their dream of studying abroad. The only hitch for the salaried and the middle-income group is the enormous rise in the cost of education abroad. However, despite the high costs, parents are generally willing to fund their children's education. They find recourse in education loans offered by the various financial institutions. Educational loans are definitely the most effective way for financing overseas education.



Today, most banks have dedicated loan schemes for education abroad, but public sector banks are the most trusted and reliable sources for such loans. The Indian Bank is one of the leading public sector banks that offers education loans for studies abroad. Being a government owned institution the borrower is assured of a competitive rate of interest and other benefits.

Education loan under the Indian Bank is categorised into different groups; one of which is exclusively for students keen on pursuing an education in a foreign institution. The loans provide funds to cover all requisite requirements for a student's stint abroad. These broadly include the course fee, living expenses and expenses for books and travel etcetera.

Indian Bank education loan for study abroad


The Indian Bank offers a term loan to students wanting to pursue higher studies overseas. Here are the key points of the Indian Bank's student loan scheme for study abroad –

  • Indian Bank offers education loan to students enrolled in regular full-time courses in universities abroad
  • The education loan is available for undergraduate courses, post graduate degrees and doctorate programmes
  • Programmes in science, engineering, technology, medicine, mathematics, and management studies are eligible for education loan for overseas studies
  • Loan is also available for students enrolled in MCA and MS etcetera and for professional courses conducted by CPA in the United States and by the CIMA in London
  • Students with admission in universities in the United States of America, the United Kingdom, Australia, Canada, Japan, Singapore, Hong Kong and in European universities can avail of this loan
  • Under the scheme students are entitled to apply for education loan upwards of twenty five lakh which can be revised at the banks discretion, depending on the merit of the student
  • The loan amount covers up to 80% of the total cost of education
  • Girl students are entitled to a 0.5% discount on the interest
  • Repayment schedule is relaxed with students getting up to six months after the completion of the programme to begin repaying the loan

Procedure for applying education loan from Indian Bank


Initial deposit


A paltry sum of ten thousand rupees is deposited with the bank at the time of applying for the loan. This amount gets adjusted towards the processing fee. If the applicant fails to avail the loan within four months of it being sanctioned the amount gets automatically appropriated by the bank

Expenses covered


The loan amount covers all expenses pertaining to the study programme such as:
  • Tuition fees
  • Laboratory fees
  • Examination fee
  • Library fees
  • Purchase of instruments and/or equipment
  • Purchase of study material
  • Purchase of laptop
  • Travel expenses
  • Living expenses
  • Fees for project work or study tours

Collateral security


It is mandatory for the parents or a guardian to be a co-borrower along with the student applying for the loan Additionally, a third party guarantee will also need to be furnished as collateral security. Parents and/or guardian can stand in place of collateral security if their gross annual income based on their Income Tax returns is three times the amount of the loan applied for. This means if the loan amount applied for is twenty-five lakhs the gross income of the co-borrower must be more than seventy lakhs per annum. A married applicant may use their partner or the parents or parents-in-law as the co-borrower.

Margin money


Any loan upwards of four lakhs requires 15% margin money to be paid by the borrower. Margin money is 15% of the total amount of education. This means that the borrower pays 15% towards the cost of the education and the balance amount is funded by the bank. Another way of looking at is that the borrower pays 15% of the total loan amount and the bank covers the balance through the loan.

Repayment period


The repayment period for the loan is between ten years and fifteen years, depending on the loan amount. Higher loans get a longer leeway for repayment.

There are two cut-off periods for the repayment schedule to kick in, depending on which of the two happens earlier –
  • On one year completion of the study programme
  • Six months after landing a job


Who is eligible for the Indian Bank study abroad education loan


Any Indian national is eligible to apply for education loan for studies abroad offered by Indian Bank. The list of documents that need to be submitted along with the loan application are as under –

  • Letter of Admission from the university (this must be an unconditional letter)
  • Breakdown of cost of studies (provided by the institute)
  • Two passport sized photographs each of student and co-borrower
  • PAN card copies of student and co-borrower
  • Copy of Aadhar card of student and co-borrower
  • Copy of Identity proof, issued by a Government agency (Aadhar card/passport/driving license) of student and co-borrower
  • Address proof (copy of passport/electricity bill/telephone bill/bank passbook)
  • Six months bank account statement of co-borrower and student if applicable
  • Income Tax return for the last two years of the co-borrower
  • Statement of Assets and Liabilities of the co-borrower
  • Copy of salary slip or copy of Form 16, as proof of income of co-borrower
  • Copy of education documents of student (10th and 12th Std mark sheet and pass certificate for undergraduate studies and degree certificate along with semester wise marks transcript for post graduate studies)
  • All property documents in original, including property tax receipt)
  • Loan Application Form duly filled

Note:

Original copies of all documents will also have to be submitted to the bank for verification. Original property documents will be deposited with the bank.

What can be offered as collateral


There is no collateral for loans less than four lakhs, but education loans for studies abroad generally go into tens of lakhs and require collateral. These are mortgaged to the bank for the term of the loan. Once the loan amount is repaid the collateral is transferred back to the co-borrower. Acceptable collateral security includes residential accommodation and securities etcetera.

All processing fees for the valuation of property, scrutiny of property documents by bank appointed advocate and registration of property at the registrar's office etcetera is to be borne by the co-borrower.


Once the paperwork is complete the bank initiates the legal procedures and the loan is granted. The money is usually paid directly into the university's account.

Life insurance cover


Under the New IB Jeevan Vidya, a life insurance cover is made mandatory for students taking a loan for study in a foreign university. A one-time insurance premium has to be paid by the co-borrower.

Rate of interest


The current rate of interest for education loans through the Indian Bank is 12.25% per annum. For more details log onto the Indian Bank Education Loan page or visit a branch of the bank nearest you. You can use the Indian Bank Branch locator to identify a branch.

If you want to scour through more student loan options then check the education loan schemes offered by these banks -


Article by Juana
Juana is a freelance writer, with years of experience, creating content for varied online portals. She holds a degree in English Literature and has worked as a teacher and as a soft skill trainer. An avid reader, she writes on a variety of topics ranging from health, travel, education and personality development.

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