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SBI Education loan for abroad

Last Modified : May 11, 2018

When you dream of studying abroad, you sooner or later realize that paying for a semester there is much more expensive than you expect. Though studying abroad can surely be expensive, but it is absolutely worth it! So, if you are really interested in studying abroad to experience the best programs, you can resort to an education loan.  

As we know that more and more Indians today are spending a large amount of money on education, so for this, the Government of India is working at its best to provide all its citizens access to the financial aid that they require to pursue the education that they desire to. Among the top education loan providers in India, the State Bank of India (SBI) is one which grants loans to the students who secure admissions in various recognized universities in India as well as abroad without any processing fee. SBI being India’s premier lender is a big player in the education loan market and has various innovative and interesting schemes for people seeking to study courses across the country and abroad. SBI is known for providing individuals loans at very reasonable rates. Here are the details of student loans that SBI offers to study abroad from SBI.

1. SBI Student Loan

Students looking for an education loan to study in colleges can opt for SBI Students Loan which is granted to Indian Nationals for pursuing higher education in India or abroad where admission has been secured. For the SBI education loan, the reputed foreign institutions abroad, CIMA and CPA courses are approved.

The repayment period for this scheme is of up to 15 years after Course Period + 12 months of repayment holiday. No processing/upfront charges levied on Education loans is one of the advantages you get with this scheme.

Max. Loan Amount with parent or guardian as guarantor

INR 7.5 Lacs

Max. Loan Amount with Collateral

INR 10 Lacs (For India)

INR 20 Lacs (For Abroad)*

Processing fee for below Rs. 4 Lakhs

No

Processing fee for Above Rs. 4 Lakhs

INR 5,000

Courses covered in India

Almost all the courses

Courses covered in Abroad

Job oriented, Technical, PG, Diploma Courses, Courses by CIMA in London and CPA in the USA

Margin for Above 4 Lakhs Loan in India

5%

Margin for Above 4 Lakhs Loan in Overseas

15%

Eligibility

Indian Nationals

Loan Repayment

Starts After 1 year of course completion or 6 months after getting job.

Terms for SBI Student Loan Scheme Agreement:

  • N0 processing fee below Rs. 4 Lacs loan amount.
  • Students with loan amount more than Rs. 4 Lacs have to deposit Rs. 5,000 in the starting.
  • The bank will expropriate the amount deposited by the applicant if the loan is not availed within 4 months of the loan sanction.
  • Maximum loan amount for studying in India is Rs. 10 Lacs and for overseas it is Rs. 30 Lacs.
  • For Security of amount under or equal to Rs. 4 Lacs, Parents can be considered as co borrower.
  • For Security of amount between Rs. 4 and 7.5 lakhs, Parent as well as third party guarantee is required.
  • For loan amount above Rs.7.5 lakhs, Parents can act as co borrower as well as a tangible security is required.
  • In case a candidate is married then spouse/parents/Parent-in-laws can be considered as co-borrower.
  • There will be no margin money for loan amount less than Rs. 4 Lacs
  • For loan above this amount, 5% margin is required for domestic studies while loans for overseas studies feature a 15% margin.
  •  The repayment period for SBI Student Loan scheme up to INR 7.5 Lacs is 10 years and for a higher amount is 12 years.
  • The repayment period will start either 1 year after course completion or 6 months post getting a job whichever is earlier.

Fees Covered Under this Loan

  • College Fee
  • Hostel Fee
  • Examination Fee
  • Purchase of Books, Equipment, Uniform or Computer
  • Travel Expenses for abroad studies
  • Cost of a two-wheeler (Maximum of Rs. 50,000).
  • Cost of other activities like study tours, project work, etc.

2. SBI Global ED-Vantage Scheme:

SBI Global Ed-Vantage is an overseas education loan exclusively for the students who wish to pursue full time regular courses at foreign colleges/universities. It not only has an attractive interest rate but also has a faster online application process. Apart from this, it offers a higher loan amount (Rs. 20 lakhs to Rs. 1.5 crore) and is also easy to repay with EMI up to 15 years. If you get this loan, you get early approval with loan sanction prior to i20/Visa. You also get tax benefit under section 80(E).    

Ed-Vantage is a recently launched scheme. Students who look forward for global exposure in universities like Harvard, Stanford, and MIT, can avail this loan from SBI.

Available for

Abroad Studies

Courses Level

Both Undergraduate and Post Graduate Courses

Courses Field

Mathematics, Science, Engineering, Medicine and Management

Countries

USA, UK, Australia, Canada, Japan, Europe Hong Kong, New Zealand and Singapore

Loan Amount

From Rs. 20 Lacs to Rs. 1.5 Crores

Concession

0.5% for Girls

Repayment Period

15 Years

Repayment Starts

6 Months after completion of course

Rate of Interest

1.7% above MCLR and currently is 10.85%

Terms for SBI Global ED-Vantage Scheme Agreement:

  • Loan amount available is from Rs. 20 Lacs to 1.5 Crores.
  • Processing fee is 10,000 per application.
  • Scholarship and assistantship are included in margin.  
  • Margin is to be brought in on year-on-year basis as and when disbursements are made on a pro-rata basis.
  • Tangible collateral security is required.
  • Collateral security by third party are also accepted.
  • Repayment starts 6 months after the completion of course
  • Repayment period is of 15 years.
  • There will be concession of .5% in interest for girls

Countries covered in this Loan scheme

USA, UK, Australia, Canada, Japan, Europe Hong Kong, New Zealand and Singapore

  1. How to Apply for SBI Education Loan?

Answer: The Government of India has started a common portal named Vidyalakshmi portal where the application for SBI education loan can be submitted. The portal makes it convenient to apply for a loan by aggregating loan application process for all the listed banks at one place.

There are two ways in which you can get started to apply for loan in any bank. The first one is the admission with Loan Request Letter which is issued by the college. Here, the colleges issue a loan request letter after getting the provisional admission. The Loan Request Letter then needs to be submitted along with other documents at bank or uploaded on the online portal itself.

The second way is with scorecard of entrance exam. This is the case where the students can apply for a loan after getting CAT score card. After clearing the entrance exam, and getting the complete fees financed, the student can approach directly. The complete fee financed must be inclusive of the one-time admission fee or the counseling fee. Bank transacts the fees only when it receives formal loan request letter with admission confirmation.

Documents Required:

In order to get any of the two above mentioned schemes of SBI education loan, the students must have the following documents essentially:

  • Letter of admission
  • Completely filled in Loan Application Form
  • 2 passport size photographs
  • Statement of cost of study
  • PAN Card of the student and Parent/ Guardian
  • AADHAAR Card of the student and Parent/ Guardian
  • Proof of identity (Driving Licence/Passport/AADHAAR/ any photo identity)
  • Proof of residence (Driving Licence/Passport/Electricity bill/Telephone bill)
  • Bank account statement for last 6 months of the student/Co-borrower/ guarantor's
  • IT return/ IT assessment order, of previous 2 years of Parent/ Guardian/ other co-borrower (if IT Payee)
  • Brief statement of assets and liabilities of Parent/ Guardian/ other co-borrower
  • Proof of income (i.e. salary slips/ Form 16) Parent/ Guardian/ other co-borrower

In foreign countries, CIMA and CPA courses are approved for SBI education loans for foreign educational institutions. One can get in touch with the bank in order to know the list of educational institutions which fall under these two schemes of loan.

FAQs

  1. What schemes does State Bank of India considers for its education loans?

Answer: There are multiple other schemes offered by State Bank of India apart from the basic education loans viz. Student Loan Scheme, Global Ed-Vantage Scheme, Scholar Loan Scheme and Skill Loan Scheme. These are:

  • CSIS Scheme
  • Padho Pardesh
  • Skill Loan Scheme
  • Vocational Education and Training
  1. In whose name is the loan granted?

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

  1. Is the loan contract executed only in student’s name?

Answer: No, the loan can be executed both in name of student and co-borrower as both are equally responsible for repayment of loan.

  1. What is the age limit for availing loan in State Bank of India?

Answer: There is no age restriction as stated by State Bank of India. Borrowers must fulfil other eligibility criteria mentioned.

  1. Are minors eligible to apply for State Bank of India Education Loan?

Answer: Yes, Minors aspiring for further studies can apply for education loan with help of legal representation from parents/ guardians.

  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. Should the student’s margin be paid upfront in the starting?

Answer: Margin can be paid on a year to year pro rata basis whenever bank disburses loan amount as per requirement.

  1. Where can I avail State Bank of India Education Loan?

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

  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. Can I view my loan statement online if I am an existing education loan borrower?

Answer: Yes, by creating a login on State Bank of India web portal, you can view all details related to education loan online.

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

Answer: Yes, a student must have secured a minimum aggregate marks in their last qualifying examination (10+2 or Graduation). Relaxation in the marks is given to SC/ ST students

  1. What is the discount/ rebate offered by State Bank of India?

Answer:

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

Answer: Mostly State Bank of India asks tangible security in lieu of the loan amount sanctioned along with assignment of future salaries in favour of State Bank of India. 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. Can I place my family property as collateral?

Answer: Yes, but it will need consent of all family members involved.

  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 State Bank of India is maximum 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 State Bank of India 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 State Bank of India?

Answer: Yes, travel expenses are covered under this loan

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

Answer: This depends totally on bank’s discretion as whether a student meets other eligibility criteria or not.

  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: State Bank of India offers no special benefits to students admitted in top premier institutes abroad.  

  1. What is the processing fee or prepayment charges?

Answer: The education loan offered by State Bank of India does not carry any prepayment charges/ processing fee/ documentation charges for loan amount upto INR 4 Lacs. For amount exceeding INR 4 Lacs, student have to deposit INR 5000 in the starting.

  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 State Bank of India education Loan (both for India and Abroad)?

Answer: Diploma/ Certificate courses are eligible under State Bank of India Education Loan for abroad. Regular degree like, shipping, pilot training, and aeronautical that are approved by Director General of Civil Aviation or Shipping can be considered.

  1. Is a co-borrower necessary for loan?

Answer: Yes, it is mandatory to have a co-borrower to avail loan from State Bank of India. 

  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. How many guarantors do I need to borrow loan from State Bank of India?

Answer: You need at least 2 guarantors to avail loan from State Bank of India.

  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: The maximum term for repayment is 15 years for SBI Education Loan

  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.

  1. 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.
  1. What are the charges for late EMI payment?

Answer: There are no charges for late EMI payment mentioned by SBI. 

  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. It can be extended for maximum 2 years based on student’s reason. You can contact your nearest branch for more details. 

  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. If I am joining the course soon after current course, can I get an extension?

Answer: Mostly, in such cases, you do not get an extension and even if you do there is a possibility that interest rates are higher

  1. What is interest rate of education loan?

Answer: Interest rates for education loan provided by State Bank of India are

SBI Student Loan Scheme

Amount of Loan

1 year MCLR

Rate of Interest

Upto INR 7.50 Lacs

8.15% + 2.00%

10.15%

Above INR 7.50 Lacs

8.15% + 2.75%

10.90%

  • SBI Global ED Vantage Scheme

Amount of Loan

1 year MCLR

Rate of Interest

Upto INR 20 Lacs and upto INR 1.5 Crore

8.15% + 2.50%

10.65%

  • SBI Skill Loan Scheme

Amount of Loan

1 year MCLR

Rate of Interest

Upto INR 1.5 Lacs

8.15% + 1.50%

9.65%

  1. What is interest subsidy on education loan?

Answer: State Bank of India offers

  • CSIS- Interest Subsidy scheme for economically weaker sections and to promote education amongst them
  • Padho Pardesh scheme for students who wish to pursue studies abroad
  • Skill Loan Scheme for students who wish to pursue courses to enhance their skills and attain better career opportunities.
  • Vocational and Education Training for students who wish to purse vocational (skill development) courses for better career prospects and enhancing knowledge.
  1. What documents do I need to submit to avail interest subsidy scheme?

Answer: The documents that need to be submitted are:

  • Income certificate issued by authorised authorities
  • Bonafide student certificate
  • Letter of undertaking or declaration signed by borrower/ co-borrower
  1. If I am availing loan for overseas studies, can I also avail interest subsidy scheme?

Answer: CSIS Scheme is not available for students who wish to pursue overseas studies whereas Padho Pardesh is formulated for foreign education.

  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 State Bank of India?

Answer:  Some of the benefits are:

  • State Bank of India provides Life Insurance Cover Scheme for education loan borrowers. The premium of which will be borne by the bank.
  • 1% concession on interest rate is provided if the interest is serviced during the moratorium period.
  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:

1800 425 3800/ 1800 11 2211

080-26599990/ 022-22029456

Local rates apply on every call

Customer Care Id: customercare@sbi.co.in