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Education Loan

K. Srinivasan
Education Loan Task Force
Ullas Trust
2 April 2017
Types of Education Loan

IBA Scheme (one for students after

Plus Two and the other for
students with 10th std. qualification)
Non IBA Scheme(Banks own
scheme concessions will not be
Indian Banks Association (IBA)
Scheme introduced in 2001
Latest scheme from August 2015

Every meritorious poor student

should get the opportunity to
pursue higher education in India
or abroad
Implemented by IBA members
Indian national
Secured admission through written
test / merit based selection process
in a recognised institution after Plus
two or equivalent
Special procedure for Management
quota students
Design elements
a. Loans to students admitted to top
rated institutions
b. Loans to students admitted to
other domestic institutions
c. Loans to students seeking
studies abroad.
Important aspects

Reputation of the Institution

Eligible courses
All approved UG/PG Degree or
diploma courses recognised by
Aeronautical / shipping / Nursing
approved by the Government
Eligible courses

All approved courses in India by

foreign Universities
Banks can decide the courses
based on the employability
Study abroad
Be cautious about higher education
abroad Look at the rating of the
Institution and employability
Medical courses in Russia, China
are not acceptable in India
Expenses considered
Fees (as approved by the
Hostel expenses or reasonable
lodging expenses
Purchase of books, computers, etc.
Scholarship to be excluded
Quantum of finance

For study in India 10 lakhs

For study abroad 20 lakhs
Banks can consider higher limit
depending on the Institution

For study within India

Upto 7.5 lakhs Nil (if CGCI

guarantee is available) beyond
For foreign study 15%

Upto 7.50 lakh, parents to sign (if

Credit Guarantee is available)
Above 7.50 lakh collateral
security needed
Rate of Interest
Interest linked to Base Rate
Banks discretion
Simple interest during moratorium
period. Accrued interest to be
added to principal while fixing EMI
Servicing of interest optional
Application documents
Address proof
Identity proof
Admission letter (merit based)
PAN card / Aadhar card
Income certificate by Thasildar
How to apply
Vidyalakshmi Portal
Directly at Branch
Bank should give acknowledgement
Decision to be given within 15 to 30

Rejection to be given in writing

with the approval of contolling
No service area concept
Interest subsidy - CSIS
Loan under IBA Scheme only
Professional / technical courses
Approved courses / institutions
Parent income should be less than
4.50 lakhs Thasildar certificate
Only for study within India
Interest subsidy

Full interest subsidy during study

period plus one year
For minority students studying
abroad, Pado Parvesh scheme

Repayment to start one year after

study period.
Telescopic EMI upto 180 months
Additional moratorium of six
months each three times during
the currency of the loan
What students should do
Follow the guidelines given by the
Update the bank with the progress
After study period consult Bank for
fixing EMI
Repay the loan as per rules
Repayment default

Credit score may be affected

through CIBIL
Bank may take legal action
Grievance redressal
Discuss the grievance with
Escalate to Regional manager or
Chairman / RBI / Government
Approach Banking Ombudsman
Finally High Court

K. Srinivasan
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