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Allahabad Bank Education Loan

Last Modified : June 05, 2018

Allahabad Bank Education Loan is available for students of up to INR 20 Lacs for Indian courses, and INR 50 Lacs for abroad courses. The oldest Joint Stock Bank of India is in continual service of Indian citizens for over past 150 years.

The bank has extended the network of more than 2,500 branches across the country. It has also an overseas branch in Hong Kong and a representative office in Shenzen. The bank employs around 22,557 personal. Education Loan for India and Abroad is extended to promote academic excellence in the nation. 

Allahabad Bank offers education loan in three major schemes – Education Loan for Higher Studies, AB Vocational Course Loan, and Gyan Dipika Scheme.

Variants of Allahabad Bank Education Loan

1. Education Loan for Higher Studies

The Education Loan for Higher Studies from Allahabad Bank is meant to be availed by only those students who like to pursue their career in higher education in India or abroad, and seek financial support. The students seeking admission under the management quota for higher education may also apply to avail this scheme.

Eligibility to Avail Allahabad Bank Education Loan for Higher Studies

  • Indian National
  • Higher Education course
  • 10+2 pass with atleast 60%
  • Management Quota students are also eligible

Key Details of Allahabad Bank Education Loan for Higher Studies

  • Zero margin for loan up to INR 4 Lacs.
  • 0.50% rebate in the rate of interest for female applicants.
  • Zero processing fee ( in India)
  • Loan is sanctioned conjointly to the applicants and their guardians.

Margin

Up to INR 4 Lacs: Nil

Above INR 4 Lacs:

  • for studying in India: 5%
  • for studying in Abroad: 15%

Maximum Loan Limit

For studies in India: INR 20 Lacs

For studies in Abroad: INR 50 Lacs

Moratorium Period

Course Period plus one year, or six months after getting a job

Repayment (Maximum)

Repayment of the loan can be done after the moratorium period by mode of EMI

Up to INR 7.5 Lakhs: 10 years

Above INR 7.5 Lakhs: 15 years

Prepayment Charges

Nil, if paid during the repayment period

Expenses Covered Under Allahabad Bank Education Loan for Higher Studies

  • Tuition Fee
  • Examination Fee
  • Library/ Laboratory Fee
  • Hostel Fee 
  • Cost of books, equipment, instrument or uniforms
  • Miscellaneous expenses- study tours, project work, thesis, etc.
  • Reasonable cost of computer or laptop (if required)
  • Passage money (for abroad)

Courses Covered under Allahabad Bank Education Loan for Higher Studies

For India

  • Graduate/ postgraduate degree/ diploma courses conducted by renowned institutions/ universities recognized by UGC, Government, AICTE, AIBMS or ICMR.
  • Academic courses such as CA, CFA, and ICWAI.
  • Courses conducted by NIFT, IITs, IIMs, XLRI, IISc, and NID.
  • Regular degree or diploma courses like, shipping, pilot training, and aeronautical that are approved by Director General of Civil Aviation or Shipping (only if it is pursued in India).
  • Courses for noble cause such as teaching training (like B.Ed.), nursing courses, and from other training institutions approved by Central Government or by State Government.
  • Reputed foreign universities offering approved courses offered in India.

For Abroad

  • Job Oriented Professional and technical courses
  • Post-graduation courses such as MBA/ MCA
  • Courses that are offered by CIMA, London and CPA, USA
  • Pilot Training, Shipping, aeronautical etc. courses that lead to a diploma or degree

Documents Required for Allahabad Bank Education Loan for Higher Studies

  • Admission letter with all essential details
  • Attested copies of age proof, residence proof and birth date.
  • Self-attested passport size photograph of applicant, co-applicant, and guarantor.
  • Copies of qualifying courses.
  • Income proof and/or copy of income tax return file of co-applicant, parents, and guarantor (if any).
  • Details of collateral security along with government approved valuation certificate (if any).
  • Bank account statement of the applicant.
  • Copy of passport and visa for abroad courses.

2. AB Vocational Course Loan

The AB Vocational Course Loan is intended to be availed by only those students who like to pursue their career in vocational education and training courses, and seek financial support. Through this scheme, the band aims to cover various categories such as technicians, craftsmen, medicine, accountancy, engineering, pharmacy, law, nursing, and more.

Eligibility to Avail AB Vocational Course Loan

  • Indian national.
  • Certificate/ diploma/ degree course conducted or supported by the ministry, national skill development corporation supported organizations, or state skill corporations and state skill missions.
  • Qualified the required education of the admitted course.

Key Details of AB Vocational Course Loan

  • Zero margin 
  • The minimum period of this loan scheme is two months and maximum is three years.
  • No age limit
  • Loan is sanctioned conjointly to the applicants and their guardians.

Margin

Nil

Maximum Loan Limit

INR 1,50,000

Moratorium Period

Maximum of one year

Repayment (Maximum)

For up to INR 50,000 – Two years

For loan amount between INR 50,000 and 1 Lac – 2 to 5 years

For loan amount above 1 Lac – 3 to 7 years

Margin and Processing Fee

Nil

Expenses Covered Under AB Vocational Course Loan

  • Fee payment to college, institute, university, or skill development centre
  • Examination fee
  • Cost of books, equipment, instrument or uniforms

Courses Covered Under AB Vocational Course Loan

All vocational education courses for a minimum period of 2 months and a maximum period of 3 years approved by Central Government or by State Government.

Documents Required for AB Vocational Course Loan

  • Admission letter
  • Attested copies of age proof, residence proof and birth date.
  • Self-attested passport size photograph of applicant, co-applicant, and guarantor.
  • Copies of qualifying courses.
  • Income proof and/or copy of income tax return file of co-applicant, parents, and guarantor (if any).
  • Bank account statement of the applicant.

FAQs 

  1. What schemes does Allahabad bank considers for its education loans?

Answer: There are two schemes offered by Allahabad Bank apart from the basic education loan. These are:

  • AB Vocational Loan – for students who wish to pursue vocational courses through ministry/ department/ NSDC supported institutes
  • Gyan Dipika – for parents/ guardians of students who are in course of completion of their school education
  1. In whose name is the loan granted?

Answer: The loan is granted in the name of the student

  1. What is the age limit for availing loan in Allahabad Bank?

Answer: There is no restriction on age. Student must clear the other eligibility criteria’s stated by the bank

  1. What does margin on any loan mean?

Answer:  Margin amount is the amount that a borrower has to pay through his/ her own sources in form of a down payment as his/ her contribution towards the education.

  1. Where can I avail Allahabad Bank Education Loan?

Answer:  You can either contact your nearest branch for the application form or details regarding the loan or apply online.

  1. Is there any provision to apply for loan online?

Answer:  : Yes, you can apply online through Vidyalakshmi portal to avail for this loan.

  1. Is there any minimum aggregate marks to meet the eligibility criteria to avail Allahabad Bank education loan?

Answer:  Yes, a student must have secured a minimum aggregate of 60% marks in their last qualifying examination.

  1. What is the discount/ rebate offered by Allahabad bank?

Answer:

  • 0.50% concession is given to girl students
  • Eligibility criteria and margin on education loan is relaxed for SC/ST students
  1. What all is included in tangible collateral security?

Answer: Mostly Allahabad bank asks tangible security for loan amount above INR 4 Lacs. Tangible security includes documents related to land/ building/ government security/ public sector bonds/ units of UTI, NSC, Life insurance policy/ bank deposits/ shares or debentures. The value of the security should be equal to the education loan amount.

  1. Is scholarship or assistantship included in the margin?

Answer:  Yes any scholarship or assistantship will be a part of margin charged on education loan.

  1. What is Moratorium Period?

Answer:  Course Period plus one year, or six months after getting a job

  1. What is tenure of an education loan?

Answer:  Tenure of education loan provided by Allahabad Bank is 15 years

  1. What does MCLR stands for?

Answer:  MCLR stands for Marginal Cost of funds based Lending Rate. It refers to the minimum interest rate of bank below which it cannot lend.

  1. What all expenses are covered under this course?

Answer:  Expenses covered by Allahabad Bank education loan are:

  • Tuition/ college/ hostel fee
  • Examination/ lab/ library fee
  • Books/ uniform/ instruments
  • Caution deposit
  • Passage money for studies abroad, etc.
  1. Will my travel expense will be covered if I take loan from Allahabad Bank?

Answer:  Yes, travel expenses are covered under this loan

  1. I have taken admission through management quota. Am I eligible?

Answer:  Yes, even if you have taken admission through management quota, you are eligible for education loan by Allahabad bank

  1. What do you mean by reputed or recognized institutes?

Answer:  Institutes that are affiliated to state/ central universities and comes under UGC or AICTE are considered as recognized institutes. Reputed institutes are those which are well known and have standard course of repute. More often, banks provide the list of institutes they consider for loan. (You can contact nearest branch for the same)

  1. Are there any special benefits if I have secured admission to one of the top premier institutes?

Answer:  There is no tangible security required in lieu of loan of you secure admission in top IITs or NITs. Also there is concession of 0.50% for the same.

  1. What is the processing fee or prepayment charges?

Answer:  The education loan offered by Allahabad Bank does not carry any processing fee or any other charges

  1. Will cost of my computer be covered under the loan sanctioned?

Answer:  Reasonable cost for the computer or laptop well be covered under the loan if it is required to complete the course. 

  1. Why is Pan Card necessary?

Answer:  Pan Card is one of the mandatory document required by banks these days. It is mandatory because:

  • Easy to assess Income
  • Easy to trace borrowers
  1. Are diploma or certificate courses considered under Allahabad Bank education Loan (both for India and Abroad)?

Answer:  Yes diploma or certificate courses are eligible under Allahabad Bank Education Loan. Regular degree or diploma courses like, shipping, pilot training, and aeronautical that are approved by Director General of Civil Aviation or Shipping

  1. Is a co-borrower necessary for loan?

Answer:  Yes, it is mandatory to have a co-borrower to avail loan from Allahabad bank.

  1. Who can be my co-borrower?

Answer:  Your parent/ spouse/ guardian can be a co-borrower. A co-borrower should be your immediate family member, should have a steady source of income, and a good credit history.

  1. What all documents are required from the co-borrower?

Answer: Documents required from the co-borrower are:

  • Attested copies of age proof, residence proof and birth date.
  • Self-attested passport size photograph
  • Income proof and/or copy of income tax return file
  • Details of collateral security along with government approved valuation certificate (if any).
  1. What is the KYC requirement in education loan?

Answer:  KYC requirements are the documents as a proof of personal identification and residence proof of the applicant as well as the co-borrower.

  1. What are maximum term for repayment?

Answer:  Maximum term for repayment is 15 years

  1. How can I repay the loan?

Answer:  You can repay the loan after the moratorium period by mode of EMI or through post- dated cheques.

Q. What is EMI? How are they calculated?

Answer:  EMI stands for Equated Monthly Installments. It can be calculated by using the formula given below

  • EMI = [P x R x (1+R) ^n] / [(1+R)^ n-1]
  • Here, P is Amount of Education Loan, R is Rate of Interest, n is Tenure of the Loan.
  • Or simply you can use the EMI calculator provision available on Allahabad Bank’s official website.
  1. Is the loan disbursed in name of individual applicant or to the institute/ university directly?

Answer:  The loan is disbursed directly to the institute/ university that you have taken admission to. Hence, an applicant is supposed to submit institute brochure with proper division of the fee

  1. If I am unable to complete my course in given tenure, will my repayment term be extended?

Answer: It is completely on the banks discretion to extend the moratorium period or not. You can contact your nearest branch for the same.

  1. What is method of application of interest on education loan?

Answer:  The interest will be charged at simple rate from the date of disbursement till commencement of repayment of loan. After that, compound interest is charged on reducing balance. 

  1. What is interest rate of education loan?

Answer:  The interest rate is different for different category of Institutes. Refer the table below:

Category of Academic Institution

Max. Loan Amount

Interest Rate

IIMs, ISBs, XLRI

INR 20 Lacs

Base Rate + 1.50%

IITs, BITS and other premier engineering, management & medical institutions

INR 15 Lacs

Base Rate + 2.00%

NITs, BITS and other reputed medical, management & engineering institutions

INR 10 Lacs

Base Rate + 2.50%

Other colleges / universities recognized by UGC / Govt. / AICTE / AIBMS / ICMR etc.

INR 10 Lacs

Base Rate + 3.00%

For students applying under the Management Quota

Loan up to and above INR 4 Lacs

Base Rate + 3.0

  1. What is interest subsidy on education loan?

Answer:  There is no Interest subsidy mentioned on the official website to be applied on Education Loan offered by Allahabad Bank

  1. What is employment verification in an education loan?

Answer:   The bank takes the responsibility to cross verify all the employment details of the applicant and co-borrower. If the banks fails to cross verify every detail provided, it might reject the loan application.

  1. Are there any tax benefits in education loans?

Answer:   Under Section 80E of Income Tax Act, loan borrowers can avail the tax benefits. This benefit is only available over and above INR 1,50,000. Tax benefits can be availed once the borrower starts paying interest on loan. The deduction is available until borrower pays off full interest amount on loan or for maximum of 8 years (whichever is earlier)

  1. Is it necessary to have bank account with the bank while availing loan from that particular bank?

Answer:  It is not necessary to have a bank account while availing the loan but it makes it easier for the borrower to get loan application approved.

  1. Can I repay my loan in foreign currency even if my bank is in India?

Answer:  Yes, you can pay the amount in foreign currency (Euro, Pound, Dollar, etc.) The bank might charge an additional currency conversion fee as per RBI regulations.

  1. Why do banks require insurance policy as security?

Answer:  The banks require insurance policy as security in lieu of education loan provided. The insurance policy should be equal or more to the amount of loan sanctioned. In case of untimely demise of the borrower, the bank recovers the amount from the insurance policy

  1. Are there any additional benefits on availing loan from Allahabad loan?

Answer:  Applicants can get a free debit card along with the loan amount. The can also avail an additional loan for higher studies. Student applying for the loan can also avail Group Life Insurance Cover equal to the amount of loan

  1. What is credit score? Is it important for education loan?

Answer:  Credit Score is inclusive of various factors such as credit history (Loan history or credit card). If a student does not have a credit score, banks calculate it by considering factors such as University, College and the Course of admission. Banks consider the academic background of student and credit history of co-borrower.

  1. Are NRIs eligible for the education loan?

Answer:   NRIs are eligible for the loan if they have Indian citizenship and are Indian passport holder.

  1. Is Visa a necessary document for studying abroad?

Answer:  Visa is needed as a document proof but it is not a sole requirement.

  1. What all procedures do one have to go through while applying for abroad?

Answer:   A student who is applying for studying abroad have to give necessary documents required by the bank. One needs to have a thorough knowledge of the course they are applying for and in which institute as it can be asked on the airport by the foreign officials.

  1. If a student have any query, where or whom to contact?

Answer:   Student can reach out to the nearest branch in case of any query.

Customer Care Number:1800220363.

Customer Care ID: customercare@allahabadbank.in