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Bank of Maharashtra Education Loan for India and Abroad

Last Modified : May 08, 2018

Bank of Maharashtra is a major public sector bank functioning in India with its huge range of services including Home loans, Education loans, Savings and Deposit schemes, Credit cards offers etc. Founded in 1935, today it serves more than 13+ million customers in India alone through 1800+ branches and 13,000+ employees.

Bank of Maharashtra have easy available education loans, which makes it a good preference for many students aspiring to pursue their higher education, from not only colleges in India but also from abroad. The application process here is simple and can be done through both online and offline mode (bank branches)/which makes the process more user friendly.

Bank of Maharashtra offers two types of education loans for students and also a Vocational educational loan.  The first one is a Basic education loan and the second one is a Loan under Interest Subsidy scheme as direct by the Indian Government.

1. Bank of Maharashtra Education Loan Scheme

Bank of Maharashtra offers this loan that can be availed by students to pursue graduation as well post-graduation courses both in India and abroad. The loan is extended with affordable rate of interests and maximum benefits.

Eligibility to avail Bank of Maharashtra Education Loan Scheme

  • Student must be Indian National
  • He/ She must have secured admission to any graduation/ post-graduation/ diploma courses in reputed universities in India or abroad
  • The admission should be secured through entrance exam or merit based.

Key Details of Bank of Maharashtra Education Loan Scheme

  • No margin required upto loan of INR 4 lacs
  • No collateral or security required for loan upto INR 4 Lacs
  • 0.50% concession to girl students
  • No prepayment charges

Present Rate of Interest

Loan Amount

Applicable Rate of Interest

Amount upto INR 4 Lacs

12.75%

Amount between INR 4 to 7.50 Lacs

12.25%

Amount above INR 7.50 Lacs

11.50%

 

Margin

Upto loan 4 Lacs – No margin

Above 4 Lacs –

for India: 5%

for Abroad: 15%

Maximum Loan Limit

For India – INR 10 Lacs

For Abroad- INR 20 Lacs

Security

Upto amount INR 4 Lacs: No security, parents/ guardian to be co-borrowers

Between amount INR 4 to 7. 50 Lacs: Third party guarantee required

Above INR 7.50 Lacs: Collateral security equal to amount of loan after providing requisite margin

Moratorium Period

Course Period + 1 year or 6 months after getting job

Repayment (Maximum)

Upto Loan amount INR 7.50 Lacs: 10 years

Above Loan amount INR 7.50 Lacs: 15 years

Prepayment Charges

Nil

Courses covered underBank of Maharashtra Education Loan Scheme

For India

  • Graduation Courses viz. B.A., B.Com., B.Sc., etc.
  • Post-Graduation or Doctorate Courses
  • Professional Courses such as Engineering, Medical, Agriculture, Veterinary, Law, etc.
  • Courses offered by Institutes viz. IIM, IIT, IISc, XLRI, NIFT, etc.
  • Computer Certificate courses offered by institutes accredited to department of electronics or institutes affiliated to renowned universities.
  • Degree or Diploma courses like Aeronautical, Pilot Training, Shipping and alike approved by Director General of Civil Aviation/ Shipping
  • Courses that are offered by reputed foreign universities in India
  • Regular or Evening Courses conducted by colleges/ universities approved by UGC/ Government/ AICTE/ AIBMS/ ICMR etc.
  • Degree or Diploma courses in Teacher Training, Nursing, B.Ed provided the training institutes are approved by Central/ State Government.

For Abroad

  • Job oriented professional/ technical courses at graduation level offered by reputed universities abroad
  • Post-Graduation courses like MCA, MBA, MS, etc.
  • Course conducted by CIMA, London and CPA, USA, etc.
  • Pilot Training, Shipping, aeronautical etc. courses that lead to a diploma or degree

Expenses covered underBank of Maharashtra Education Loan Scheme

  • Cost of Books, Uniforms or Stationery
  • Cost of Laptop or computer (Reasonable rate and as per demand of the course)
  • Examination Fee along with charges applied for library, laboratory
  • Hostel Fee along with charges applied for hostel mess
  • Travel Expenses or passage money for studies abroad
  • Miscellaneous cost incurred while completion of the course

Documents required for Bank of Maharashtra Education Loan Scheme

  • Duly filled Application Form
  • 4 photographs
  • Identify proof and Age proof – Driving Licence, Aadhar Card, Pan Card, or any other proof.
  • PAN Card (borrower and co- borrower)
  • Residence Proof - Driving Licence, Aadhar Card, Pan Card, Passport or any other proof.
  • Income Proof of parents/ guardians along with income tax statement of last 2 years along with 6 months bank statement
  • Copy of prospectus of institute to calculate total expenses
  • Mark sheets of last qualified examination
  • Confirmation of students’ admission to the institute
  • Scholarship Details (if any)
  • Details of all existing loans
  • For Salaried Class
  • Last 2 years ITR
  • Form-16, previous 3 months’ salary slips
  •  Last 6 months bank statements
  • For Non-Salaried Class:
  • Last 2 years ITR
  • Last 12 months bank statements

2. Interest Subsidy on Education Loans

Interest Subsidy Scheme is an initiative of HRD Ministry, Government of India. The scheme is taken up by Bank of Maharashtra to allow students to avail education loans at the subsidy rates from the Bank of Maharashtra as approved by the Government. It is mainly for economically weaker students whose (total) family income does not cross more than INR 4.5 Lacs p.a.

Eligibility to avail Interest Subsidy on Education Loans

  • Student must be an Indian National
  • He/ She have authentic income certificates from respective authorities, educational certificates, identity proofs, address proofs etc. as requested by the Bank for this Interest Subsidy scheme.

Key points of Interest Subsidy on Education Loans

Scheme is applicable only for courses offered in India

  • Student must not be already enrolled in recognized professional courses after XII in institutes established by acts of parliament
  • Annual gross family income should not exceed INR 4.5 Lacs
  • Interest subsidy is available upto moratorium period (Course Period+1 year)
  • Interest subsidy is available only once either for undergraduate/ post graduate/ diploma courses.

Courses Covered under Interest Subsidy on Education Loans

Undergraduate and Post Graduate courses in:

  • Engineering
  • Medical
  • Para-Medical
  • Agriculture
  • Veterinary
  • Law
  • Dental
  • Management
  • Computer Science

Post Graduate Diploma approved by AICTE/ UGC

FAQs

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

Answer: There are multiple schemes offered by Bank of Maharashtra apart from the basic education loan. These are:

  • Vocational Education and Training Loan scheme
  • Interest Subsidy Scheme
  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 Maharashtra?

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

  1. Are minors eligible to apply for Bank of Maharashtra 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 Maharashtra 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 Maharashtra 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 Maharashtra 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 Maharashtra?

Answer:

  • 0.50% concession is given to girl students
  • 0.50% concession to students securing admission to top premier institutes viz. IIMs, IITs, XLRI, and ISB.
  • 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 Maharashtra asks tangible security in lieu of the loan amount sanctioned along with assignment of future salaries in favour of Bank of Maharashtra. 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 Maharashtra 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 Maharashtra 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 Maharashtra?

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: Bank of Maharashtra provides additional 0.50% concession to students who secure admission to premier institutes such as IITs, IIMs, XLRI, or ISB.

  1. What is the processing fee or prepayment charges?

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

  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 Maharashtra education Loan (both for India and Abroad)?

Answer: Yes diploma or certificate courses are eligible under Bank of Maharashtra 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 Bank of Maharashtra.

  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 Maharashtra?

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

  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: Repayment term:

  • For loan upto INR 7.50 Lacs: 10 years
  • For loan above INR 7.50 Lacs: 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.

  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 Maharashtra’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 category. Refer the table below:

Loan Amount

Applicable Rate of Interest

Amount upto INR 4 Lacs

12.75%

Amount between INR 4 to 7.50 Lacs

12.25%

Amount above INR 7.50 Lacs

11.50%

  1. What is interest subsidy on education loan?

Answer: Bank of Maharashtra offers

  • CSIS for students belonging to economically weaker section whose total family income does not cross more than INR 4.5 Lacs p.a., to promote education amongst them.
  • Vocational Education and Training is for students who wish to pursue vocational courses
  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 Maharashtra 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 Maharashtra?

Answer: There are no additional benefits mentioned on the official website. You might contact your nearest branch for the same. 

  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 233 4526/ 1800 102 2636

Customer Care Id: mahasecure@mahabank.co.in