filter your search allcollegesexamnews

Home > News >  Bank of India Education Loan

Bank of India Education Loan

Last Modified : June 05, 2018

Bank of India provides financial assistance in form of an educational loan to aspirants who are looking to take admissions in higher education course offered by institutes in India and abroad. Bank offers loans of up to INR 10 Lacs for admission into courses offered by institutes in India whereas the maximum loan limit for colleges abroad is INR 20 Lacs.

Bank of India (BOI) is a banking institution that is over 110 years old. The bank was under private ownership until July 1969 when it was nationalized as per the bank nationalization drive of the government. 

Bank of India offers educational loan through its popular scheme ‘BOI Star Education Loan’.  Application for education loan from Bank of India can be made through an online application at Vidya Lakshmi Platform. Vidyalakshmi Portal is an online portal where a student can apply to any bank (that is registered) for Education Loan for India and Abroad

1. BOI Star Education Loan

Bank of India provides the educational loan to academically meritorious students for pursuing higher education from institutes in India and abroad. Loans are offered for admission into technical/professional degree and Diploma courses from recognized universities/colleges only.

Eligibility to Avail BOI Star Education Loan

  • Indian National
  • Professional/ Technical courses 
  • Good academic career
  • No outstanding education loan from any other institution
  • Father/Mother should be co-borrower

Key Details of BOI Star Education Loan

  • 0.5% concession on interest rates to girl students
  • Specially designed term insurance cover 
  • Quick processing and loan extension process.
  • Branch nearest to the permanent residence of student would be considered for the purpose of extension of the loan.

Present Rate of Interest

Loan Amount

Rate of Interest

For loan amount upto INR 7.50 Lacs

1 year MCLR + 1.70%

For loan amount above INR 7.50 Lacs

1 year MCLR + 2.50%

Margin

Up to INR 4 Lacs: Nil

Above INR 4 Lacs:

For India: 5%

For Abroad: 15%

Maximum Loan Limit

Studies in India: Maximum INR 10 Lacs

Studies abroad: Maximum INR 20 Lacs

Security

Up to INR 7.50 Lacs: Co-obligation of any of the two Parents, or in case the parents are deceased, Grandparents can fill in. No other security is required.

Above INR 7.50 Lacs: Co-obligation of any of the two Parents, or in case the parents are deceased, Grandparents can fill in. Apart from that, the bank will require the assignment of future income of the student along with a tangible collateral security for payment of loan installments.

Moratorium Period

Course period + 1 year

Repayment period

Up to INR 7.5 Lacs: 10 Years

Above INR 7.5 Lacs: 15 Years

Prepayment Charges

Nil

Course Covered Under BOI Star Education Loan

For India

  • Graduate/post graduate or diploma/ degree courses
  • Courses offered by institutes/ universities recognized by Government/UGC/CMR/AIBMS/AICTE etc.
  • ICWA, CFA, CA (regular and integrated) courses etc.
  • Courses that are conducted by IIMs, XLRI, NID, NIFT, IITs, IISc etc.
  • The government approved degree/ diploma courses- Civil Aviation, Aircraft Maintenance, Pre-sea training etc. (in India)
  • B.Ed., Nursing and teachers training courses (only degrees and diplomas) offered by institutions that are recognized by State Governments or the Central Government.
  • Courses offered by recognized foreign universities in the country.
  • Vocational and skill development courses

For Abroad

  • Job-oriented technical/professional graduate courses and postgraduate courses like MBA, MS, MCA etc.
  • Courses conducted by CPA, USA and CIMA, London etc.
  • Approved degree and diploma courses in the field of Civil Aviation, Shipping, Pilot Training etc. (in India or abroad)
  • Pilot Training, Shipping, aeronautical training from an institute recognized by the competent local aviation/ shipping authority
  • Diploma courses are not considered

Documents required for BOI Star Education Loan

  • Identity proof- Voter ID, PAN card, etc. 
  • Mark sheet of exam qualified by the candidate for admission into respective course/institute.
  • Admission Proof- Fee receipts, Transfer certificate, HSC passing certificate, mark sheet, etc. a
  • Schedule for expenses of course
  • Passage Expenses
  • At least two latest passport size photographs of applicant, co-applicant, and guarantor.
  • Salary slip (If applicable)

Expenses Covered under BOI Star Education Loan

  • Tuition Fee
  • Examination/Library/Laboratory fee
  • Purchase of books/equipment’s/instruments/uniforms.
  • Caution deposit/building fund/refundable deposit supported by Institution bills/receipts.
  • Travel expenses/passage money for studies abroad
  • Purchase of computers/Laptops- essential for completion of the course
  • Life Insurance Premium for student
  • Miscellaneous cost incurred while completion of the course

2. BOI Star Vidya

Bank of India offers BOI Star Vidya Education Loan scheme to students who pursue their studies from top rated premier institutes in India. The loan is offered with maximum benefits and concessions to ease students of their loan liability.

Eligibility to avail BOI Star Vidya

  • Indian National
  • Professional/ Technical courses in premier institutes under List A, B, and C (list is mentioned below)
  • Good academic career
  • No outstanding education loan from any other institution
  • Father/Mother should be co-borrower

Key Details of BOI Star Vidya

  • 0.5% concession on interest rates to girl students
  • No collateral security required
  • No margin
  • Specially designed term insurance cover 
  • Quick processing and loan extension process.
  • Branch nearest to the permanent residence of student would be considered for the purpose of extension of the loan.

Present Rate of Interest

Rate of Interest for all institutes under List A, B, and C and for all amounts is 1 year MCLR

Category of Institute

Interest Rate

For IITs/ IIMs

9.95%

For institutes under list A, B, and C

10.45%

 

Margin

Nil

Maximum Loan Limit

Institutes under List A: INR 30 Lacs

Institutes under List B: INR 20 Lacs

Institutes under List C: INR 10 Lacs

Security

No collateral security required

Parents/ guardians as joint borrowers

Assignment of future income of the student in favour of bank

Moratorium Period

Course period + 1 year

Repayment period

15 Years

Prepayment Charges

Nil

Courses Covered under BOI Star Vidya

  • Full-Time Degree/ Diploma courses 
  • Full-time Executive management courses
  • Certificate/ part-time courses are not covered under this loan

Expenses Covered under BOI Star Vidya

  • Tuition Fee
  • Examination/Library/Laboratory fee
  • Purchase of books/equipment’s/instruments/uniforms.
  • Caution deposit/building fund/refundable deposit supported by Institution bills/receipts.
  • Travel expenses/passage money for studies abroad
  • Purchase of computers/Laptops- essential for completion of the course
  • Life Insurance Premium for student
  • Miscellaneous cost incurred while completion of the course

Documents required for BOI Star Vidya

  • Identity proof- Voter ID, PAN card etc of student and parents/guardian
  • Mark sheet of exam qualified by the candidate for admission into respective course/institute.
  • Admission Proof- Fee receipts, Transfer certificate, HSC/Plus to or equivalent passing certificate, mark sheet
  • Schedule for expenses of course
  • At least two latest passport size photographs of applicant, co-applicant, and guarantor.
  • Salary slip (If applicable)

For the list of institutes under List A, B, and C- Click Here

FAQs

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

Answer:  There are multiple schemes offered by Bank of India apart from the basic education loans such as BOI Star Education Loan and BOI Star Vidya. These are:

  • Padho Pardesh
  • Central Scheme for Interest Subsidy
  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 Bank of India?

Answer: There is no age restriction for the applicant applying for education loan from Bank of India. He/ she should only meet the other stated eligibility criteria’s.

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

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

  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 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 Bank of India education loan?

Answer: Yes, a student must have secured a minimum aggregate of 50% marks in their last qualifying examination (10+2 or Graduation)

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

Answer:

  • 0.50% concession is given to girl students
  • 0.50% concession to students securing admission to institutes like IITs and IIMs under BOI Star Vidya Loan
  • Eligibility criteria and margin on education loan is relaxed for SC/ST students
  1. What all is included in tangible collateral security?

Answer: Mostly Bank of India asks tangible security in lieu of the loan amount sanctioned along with assignment of future salaries in favour of 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. 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 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 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 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: Answer: Bank of India provides additional

  • 0.50% concession to students who secure admission to premier institutes such as IITs and IIMs.
  • 1% concession if interest is serviced during moratorium period
  1. What is the processing fee or prepayment charges?

Answer: The education loan offered by Bank of India does not carry any prepayment charges or processing charges for studies in India.

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

Answer: Diploma courses are eligible under Bank of India Education Loan. Regular degree or diploma courses like, shipping, pilot training, and aeronautical that are approved by Director General of Civil Aviation or Shipping. Certificate or part time courses are not considered under BOI Star Vidya Education Loan

  1. Is a co-borrower necessary for loan?

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

Answer: You need at least 2 guarantors to avail loan from 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: Maximum Term for repayment for Loan amount upto INR 7.50 Lacs is 10 years and maximum term for repayment is 15 years for loan amount above INR 7.50 Lacs

  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.
  • Or simply you can use the EMI calculator provision available on Bank of India’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. 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. What is interest rate of education loan?

Answer: The interest rate is different for different loan offered. Refer the tables below:

BOI Star Education Loan

Loan Amount

Rate of Interest

For loan amount upto INR 7.50 Lacs

1 year MCLR + 1.70%

For loan amount above INR 7.50 Lacs

1 year MCLR + 2.50%

BOI Star Vidya

Category of Institute

Interest Rate

For IITs/ IIMs

9.95%

For institutes under list A, B, and C

10.45%

What is interest subsidy on education loan?

Answer: Bank of India offers

  • CSIS for students belonging to economically weaker section of the society to promote education amongst them.
  • Padho Pardesh Scheme for minority sector students who wish to pursue their studies abroad.
  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: No, the interest subsidy scheme is available only for studies applying for studies in India.

  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). You can visit the official website of Bank of India to calculate your tax benefit through their tax benefit calculator.

  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 Bank of India?

Answer: The bank offers specially designed term insurance cover and the premium is included as an item of finance.

  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: 022 – 40919191/ 1800 220 229

Local rates apply on every call

Calls are answered 24*7.