Model Education Loan from PSB for pursuing higher education in India and abroad


Punjab and Sind Bank, a public sector bank, is offering educational loan to meritorious Indian students for pursuing higher education in India and abroad. Read this article to know the details.

Punjab and Sind Bank (PSB) is a public sector bank of India. The corporate office of this bank is located at Rajendra Place, New Delhi. Like all other banks, PSB also offers various schemes for meritorious students pursuing higher education in India and abroad. In this article we are going to discuss the details of Model Education Loan scheme for Indian students planning to pursue higher education in India and abroad.

List of eligible courses (in India)

The students going to pursue following courses in India are eligible for this loan:
  • Approved courses leading to graduate/post graduate degree and PG diplomas conducted by recognized colleges/ universities recognized by UGC/ Govt./ AICTE/ AIBMS/ ICMR, etc.
  • Courses like ICWA, CA, CFA, etc.
  • Courses conducted by IIMs, IITs, IISc, XLRI, NIFT, NID, etc.
  • Regular Degree/ Diploma courses like Aeronautical, pilot training, shipping, nursing or nay other discipline, approved by Director General of Civil Aviation/ shipping/ Indian Nursing Council or any other regulatory body as the case may be, if the course is pursued in India.
  • Approved courses offered in India by reputed foreign universities.
  • [Note: The above list is indicative in nature. Courses other than the above offered by reputed institutions may also be considered on the basis of employability.]

List of eligible courses (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. Degree/Diploma courses like aeronautical, pilot training, shipping etc provided these are recognized by competent regulatory bodies in India/ abroad for the purpose of employment in India/ abroad.
  • [Note: Diploma Courses and Certificate Courses have not been included as eligible courses for the scheme. Post graduate studies leading to PG degrees and PG diplomas offered by reputed institutes/ universities only will be covered by the scheme. Assessment, employment potential or future prospects is very important criterion considering the higher cost of studies involved.]

Quantum of finance

  • Studies in India: Maximum upto Rs. 10 lakhs
  • Studies Abroad: Maximum upto Rs. 20 lakhs
  • [Note: Higher quantum of loan may also be considered on course to course basis, e.g. courses of IIMs, ISB, etc.]

Applicable margin

  • Upto Rs. 4 Lakhs: Nil
  • Above Rs. 4 Lakhs: Studies in India: 5%; Studies abroad: 15%

Rate of interest

  • Loan upto Rs. 4 lakhs: One year MCLR + 2%
  • Loan from Rs. 4 lakhs to Rs. 7.50 lakhs: One year MCLR + 2% (Concession if collaterl and gurantee are given: 0.5%) Loan above Rs. 7.50 lakhs: One year MCLR + 1.5%

Processing fee

There is no processing fee for education loan taken from PSB.

Security

  • Upto Rs.4 Lakhs: No security (Parents to be joint borrowers)
  • Above Rs. 4 lakhs and upto Rs. 7.5 lakhs: Parents to be joint borrower Collateral security in the form of suitable third party guarantee [Note: However, third party guarantee will be waived if the loan is eligible for Credit Guarantee fund Scheme for Education Loan (CGFSEL).]
  • Above Rs. 7.5 lakhs : Parents to be join borrowers and tangible collateral security of suitable value acceptable to bank, along with the assignment of future income of the student for payment of installments.

Moratorium period

  • Course Period + 1 Year
  • [Note: The bank may allow upto three spells of moratorium (not exceeding six months each) during thelife cycle of the loan, taking into account the spells of unemployment/underemployment, without treating the exercise as restructuring, subject to appropriate inclusion of the same in terms and conditions of the loan agreement.]
  • Any other concession or moratoriums (exceeding those specified in the original sanction) for a borrower under financial difficulty would be treated as restructuring and would attract the prudential norms thereon.
  • The facility of extended repayment period and increased number of moratoria for repayment will be extended to existing borrowers whose accounts are classified as 'standard', and is subject to conditions mentioned above.

Repayment and Prepayment period

  • Repayment of the loan will be in equated monthly installments for a maximum period of 15 years for all categories.
  • No pre-payment penalty is to be levied for prepayment of loan any time after the commencement of repayment.

Concluding comments

For further information about the scheme, interested students and the guardians are advised to contact the nearest Punjab & Sind Bank branch or to check the bank website www.psbindia.com


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