Vidyanidhi scheme: a unique education loan from South Indian Bank
South Indian Bank offers a unique scheme by which students taking admission in academic institutions of Kerala are granted loan upto Rs. 1 lakh to enable them to pay 'refundable deposits' demanded by the educational institutions. The article discusses the details of the scheme named Vidyanidhi scheme.
Vidyanidhi scheme of South Indian Bank (a private sector bank) aims to help those meritorious students who have newly secured admission to select professional colleges in Kerala. This is a unique scheme where financial assistance as loan is provided to those students who are pursuing higher education in Kerala.Objective
The objective of the scheme is to enable the students to pay 'refundable deposit' demanded by the educational institutions of Kerala.Quantum of loan
The upper limit of loan under this scheme is Rs. 1.00 lakh (Loan amount isrestricted to 10% of the total tuition fees applicable for the entire course, or Rs. 1.00 lakh, whichever is lower. The loan amount is to be utilized for payment of refundable deposits only). Applicable margin
The applicable margin in the scheme is nil, if interest is serviced periodically and 15%, margin if interest is funded.Security and guarantor
Under this scheme, the security is Nil. The parents of the students are required to stand guarantee for the loan. If both the parents are not alive, guarantee may be obtained by the student from the guardian or from any other person having net worth not less than the loan amount.Repayment of loan
Immediate repayment from the management of the college after completion of the course. If the interest is funded, the repayment of funded interest is to be effected by 60 EMIs, which will start one year after the qualifying examintion or six months after the student obtaining employment, whichever is earlier.Rate of interest
Under Vidyanidhi loan scheme, the rate of interest is related to the base rate. The rate of interest is: Base rate at the time of applying + 5.20%Authorization
Undertaking
Availability of usual educational loan of the bank
A student, if he/she so desires, can also apply for educational loan under South Indian Bank's general scheme, in addition to the Vidyanidhi scheme, following the scheme parameters.Upfront fee and penal interest
One time upfront fee is 0.50% of loan amount. The penal interest applicable in the scheme is 2%, for default of sanction terms.Special note
Loans under the scheme are subject to the discretion of the South Indian Bank and subject to such conditions as may be stipulated by the bank. Interest rates are subject to change without notice.
For further information, the students and their guardians are advised to check the bank website www.southindianbank.com
Follow
Great initiative by the South Indian bank coming to the help of students to pursue their higher studies with education loan and that can be easily obtained without much paper work. While I took the loan for my son for the Engineering studies, I had to go for guarantor and sureties of Central government employees which was a big challenge for me. Had I known this arrangement by South Indian Bank, I would have approached them for the loan by standing ourselves as the guarantor. The National banks must learn from the SIB and make the educational loans more accessible to the middle class section by not insisting for sureties and guarantors.