Cooperative Banks Can Be an Alternative Source of Education Loan in India


Many students, who do not get admitted into top tier colleges and universities in India and abroad may have trouble finding education loans from traditional banks. Cooperative banks may be an option in such cases since these banks are more committed to the welfare of their members.

Sometimes, it can be difficult to get an education loan. If you have got admitted into a top college in India or abroad, banks will be more than happy to extend a loan to you. But not everyone makes it to the best colleges. Sadly, although every student has the right to receive what they need to get the education they deserve, many banks have a list of pre-approved colleges and institutes they prefer to give priority to.



This may leave many students in the lurch, as they are unable to get loans from standard commercial banks. Also, loans below 4 lakhs are relatively easier to get, but anything higher and you will need a co-applicant and tonnes of documents. But if you get admitted into unknown and unrecognised colleges or universities in India and abroad, a mountain of documents is not your only hurdle. No bank may be willing to extend a loan in such cases. What does such a student then do? How do they get an education loan to finance their education?

Did you know that you have the alternative of applying for a loan from cooperative banks?

Cooperative Bank Education Loans


There are several scheduled cooperative banks – both urban cooperative and state cooperative banks – that offer education loans. Cooperative banks run for the benefit of their members. So, as long as you take a cooperative bank membership, you can get an education loan quite easily.

Becoming a member of a cooperative bank is not all that difficult. All you need to do is buy a small number of shares of the bank. Generally, you have to buy shares at least worth INR 25,000 or 2.5 percent of the loan amount. You earn a dividend on this amount, but you can also sell off the shares after you have obtained the loan.

Many cooperative banks will lend you smaller loans (of less than 1 lakh, for some banks) on a nominal membership. A nominal membership means buying shares of a few hundred rupees.

Features of Cooperative Bank Loans


Cooperative banks also let you apply for loans of up to 20 lakhs, just like commercial banks. Most of these banks will extend loans of between 85 % and 90 % of your total education cost, which is quite attractive. Many banks (like the Maharashtra-based Saraswat Co-operative Bank) charge no processing fee for loans for an Indian education, while a small (around 0.5%) fee for education abroad. The banks that do charge processing fees will usually have a lower rate than many private lenders.

The interest rates offered are not higher than commercial banks and lenders. Rates are usually between 11 and 16 %. But note that many banks, like Saraswat Bank, charge floating rates for IBA-approved courses and fixed rates for non-approved courses. Different banks may have different conditions.

Overall, if you are applying to a less prominent college or university in India or abroad, and are having trouble finding education loans from traditional banks, you may want to consider cooperative banks. They are likely to be more flexible with regards to which student they approve loans for. As in the case of commercial banks, you will have an advantage if you have a good credit score.

Find a cooperative bank near you and walk into a branch to find out more about their education loan offerings. Or you can visit online websites and do a preliminary comparison of different banks to save yourself the trouble of wasted visits. This option is definitely worth a try if you want to live your dream, but find yourself struggling to get that education loan.

Documents and eligibility


Co-operative Banks do not follow fixed set of rules for granting and disbursement of education loan. Every bank will have its own rules. You will need to check with individual participating banks on the terms and conditions that you will have to meet. However, most co-operative banks will ask for the similar documentation as standard banks. You will need to submit your KYC documents, Aadhar card, academic documents and show proof of admission. These banks do not have as strict a loan giving policy as standard banks.

Here is a list of some co-operative banks spread in different parts of the country that offer education loans. Find one that suits your needs –





Leave a message below if you want help locating a co-operative bank near you. Remember, there are co-operative banks in every state and there is one likely close to you. Do not lose hope. All the best.


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.

Follow Juana or read 448 articles authored by Juana

Related Articles

How Education Related To The Development Of Our Country

The education has a great important in our country. India was contributed ‘Gurukul’ system to the world. Education is an important factor for the overall development of a country. There are various prestigious institutions in our country for providing quality education. The talented and skilled brains should be utilized in our country itself. Certain problems are existing in our educational system. Education is always a strong power for the development and growth of our country.

Quality of Education in private technical institutes of India

In this article I have given a brief description about education in a private college. There are numerous points to be seen in private college out of which I have stressed upon some. Also I have given some points to be noted before joining a private college.

New Zealand A Perfect Place For Higher Studies

New Zealand is combination of a perfect country, metropolitan cities, serene towns and Educational Institutions. Most colleges there offering Higher Education are well known all over the world. It is the goal of the New Zealand Government to make all colleges there at par with International quality learning institutions.In this resource I will review New Zealand as a place for higher studies and as a country in general.

Can privatization of education system and Right to Education Act go together?

Recently, there was news that government is planning to privatize the complete educational system. But, the question arises that will this new scheme really be effective? Does the scheme have the capabilities to implement the Act of Right to Education for every child less than 14 years? This article explains about the pros and cons of privatizing the education system and its effect on the Right to Education Act.

Right of children to free and compulsory education act 2009

This article includes the salient feature of Right of children to free and compulsory education act 2009. I have discussed some of the important points of RTE act for quick reference. This article will immensely help all teachers, students and parents of India.

More articles: Education

Comments

No responses found. Be the first to comment...


  • Do not include your name, "with regards" etc in the comment. Write detailed comment, relevant to the topic.
  • No HTML formatting and links to other web sites are allowed.
  • This is a strictly moderated site. Absolutely no spam allowed.
  • Name:
    Email: