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IDBI offers education loan to Indian students for higher studies

IDBI education loans cater to the financial needs of aspiring students wanting to go in for higher studies in educational institutions in the country and abroad. The bank has different schemes for different levels of education. Here is a look at educational loan for non-vocational courses.

IDBI is a public sector bank that awards education loans to deserving candidates desirous of pursuing higher studies. The bank provides financial assistance to Indian students who get enrolled in recognised education institutions in the country and abroad. The loan amount helps meet all education expenses.

IDBI has four different education loan schemes –

  • Loan for non-vocational training
  • Loan for vocational training and education
  • Loan for students who get a seat through management quota
  • Loan under FIP (Financial Inclusion Programme)

Here is a lowdown on loan for non-vocational courses –

Loan for Non-Vocational programmes

Loan is granted to students who secure admission, based purely on merit, through entrance exams and other stringent selection processes. Courses eligible for loan under this category for study in India are –

  • Under graduate, post graduate and post graduate diploma courses from educational institutions recognised under UGC, AIBMA, AICTE, IMCR and other Government organisations
  • The bank grants loan for job oriented technical/professional degree programmes, Masters programmes and diploma courses from a list of approved institutions in India
  • Three year technical diploma courses conducted by recognised polytechnics
  • Courses that are conducted partially in India and partially in a foreign country are funded only for the study period in India

Courses covered under the education loan for studies abroad are –

  • Job oriented undergraduate programmes such as technical and/or professional degrees from approved colleges/schools/universities
  • Programmes conducted by CIMA London and CAP in the States
  • Masters programmes such as MBA, MSc, MS and MCA etcetera

Loans for skills and specialised training –

Loans are not restricted to degree courses alone. Those desirous of pursuing training programmes in highly skilled courses can apply for a loan as well. Shipping, pilot training and courses in aeronautics are covered under the loan.

What is the loan amount sanctioned by the bank?

There are a lot of factors that decide the exact loan amount that is sanctioned to an applicant. However, the most important of these is the income of the co-applicant (which is usually a parent) and their loan repaying capacity. The maximum loan that the bank sanctions for study programmes in India is ten lakh rupees and it goes up to twenty lakhs for study programmes overseas.

The loan amount can be increased if the applicant can produce collateral as specified by the bank. The collateral can be in the form of residential property or land, FDs and various other saving instruments. However, agricultural land is not accepted as a mortgage.

Loan repayment schedule

The bank gives the borrower a moratorium period during which it is fine to not repay the loan. This period lasts for six months after the applicant gets a job or for 12 months after completion of the programmes, whichever happens, earlier. The repayment schedule is broadly categorised as under –

  • Loan amounts up to seven and a half lakhs can be repaid in ten years
  • Loan amounts that are in excess of seven and a half lakhs can be repaid over a period of fifteen years

What is the security requirement?

  • The bank does not ask for a security for loan amounts lower than four lakhs
  • A third party guarantee is mandatory for a loan between four lakhs and seven and a half lakhs
  • All loans above seven and a half lakhs require collateral in the form of a commercial or residential building or commercial or residential land. The values of the collateral must be 1.33 times the amount of the loan
  • The bank accepts financial instruments such as Government Securities/ UTI/LIC/KVP/NSC/shares/debentures/mutual funds/FDs and gold

What does the loan amount cover?

The gist of expenses covered under the loan is –
  • All fees to be paid to the institution to meet tuition and hostel expenses
  • Money to cover exams, lab and library fees
  • Money to cover books, apparatus, equipment, uniforms etcetera
  • Travel expense for overseas study
  • Money for purchase of computing device
  • Premium for insurance
  • Payment for caution deposit

How does the bank calculate margin money?

No margin money is required for loans that are less than four lakhs. Loans above this amount require a margin of 5% for studies in India and 15% for studies in an institution abroad.

Loan for study in premier institution

Students who get admission into full-time courses in India's finest and the world's best education institutions are eligible for an education loan that covers up to 95% of the course fee, up to a maximum amount of thirty lakhs. No collateral is required if the loan amount is lower than twenty lakhs. Loan amounts exceeding this limit require tangible collateral in the form of landed or constructed property with a value of 1.33 times the loan amount. Units of LIC/UTI/NSC/KVP, mutual funds, Government Securities, FDs and gold are also accepted.

Repayment period explained

A loan amount of seven and a half lakhs or less can be repaid within ten years. Loans over this sum get a fifteen year period for repayment.

Loan to cover ICAI courses

A maximum loan of three lakhs is endowed for ICAI studies. Applicants do not enjoy a moratorium period and the repayment of the loan must be made within 84 months.

The IDBI education webpage has detailed information. Download the IDBI education loan form and submit the filled form to the bank for quick processing of your student loan.

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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