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Central Bank Education Loan for Abroad

Last Modified : June 29, 2018

Central Bank has launched multiple education loan schemes namely Cent Vidyarthi, Cent Vidyarthi for Executive MBA, Cent Skill Loan Scheme and Cent Vidyarthi for IIMs+ 4 reputed institutes. Cent Vidyarthi is the flagship education loan scheme offered by the bank for students aspiring to study abroad. 

Why Central Bank?

Central Bank offers Central Bank Education Loan to help students meet the financial needs to study in India or overseas. Additional benefits such as zero margins and no collateral security for amount upto INR 4 Lacs is a key attraction for Central Bank. Also, they have attractive rate of interests along with user friendly services.

Are you eligible for Central Bank of India Education Loan?

  • Indian National. Student must be residing in India or be an Indian citizen.
  • 10+2 qualified. He/ She must have cleared 10+2 from a recognized board of institutions.
  • Co-Borrower. A co-borrower or a co-signer is must. A co-borrower must be a member of immediate family. 

Various schemes are offered by Indian Government in collaboration with Education Loan for India and Abroad provided by the banks. Interested students can avail for these interest subsidy schemes like Central Sector Interest Subsidy Scheme, etc.

1. Cent Vidyarthi

Eligibility to avail Cent Vidyarthi

Following points of eligibility need to be fulfilled to apply for Cent Vidyarthi Loan: -

  • Indian National
  • 10+2 pass with at least 50%
  • Entrance test/ merit-based admission
  • SC and ST candidates get a relaxation of 10%

Present Rate of Interest

Male Students

MCLR + 2.00%

Female Students

MCLR + 1.50%

Quick Facts about Central Bank Education Loan 


Upto INR 4 Lacs: Nil

Above INR 4 lacs: 15%

Scholarship can also be included in margin

Maximum Loan Limit

INR 20 Lacs

There is no maximum ceiling if 100% of the loan amount is backed by a collateral security


Less than INR 4 Lacs: No Collateral required

From INR 4 to 7.5 Lacs: Guarantee of bank approved third party

Above INR 7.5 Lacs: Collateral Security equal to amount of loan

Assignment of students future salary towards the bank 

Moratorium Period

Course Period + 1 year

Repayment (Maximum)

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

15 years

Prepayment Charges


Additional Facts about Cent Vidyarthi

  • No margin for loan upto INR 4 Lacs
  • No security required for loan upto INR 4 Lacs
  • 0.50% concession to girl students

Course covered under Cent Vidyarthi

  • Graduation, Post-Graduation, Doctorate courses
  • Technical/ Professional/ Job Oriented courses 
  • Degree/ Diploma courses like Aeronautical, Pilot Training, Shipping, etc. (approved by Director General of Civil Aviation/ Shipping in India) 
  • Post Graduate Diploma courses approved by reputed foreign universities or organizations.
  • Courses conducted by CIMA, London or CPA, USA etc.
  • Diploma courses are not covered

Expenses covered under Cent Vidyarthi

Following expenses are taken into account while calculation of loan amount: -

  • Tuition Fee
  • Examination/ library/ laboratory Fee
  • Expenses to be incurred on purchase of books, equipments, instruments or uniforms
  • Reasonable cost of a computer (if required)
  • Caution deposit, building fund or refundable deposit, if mentioned in the bills/receipts given by the Institute
  • Travel expenses/ passage money 
  • Insurance premium of student (if applicable)
  • Miscellaneous expenses (project work, study tours etc)

Documents required for Cent Vidyarthi

  • Duly filled Application Form
  • Identify proof and Age proof
  • Residence Proof
  • Income Proof of parents/ guardians 
  • Income tax statement of last 2 years
  • Institute’s prospectus/brochure
  • Mark sheets of last qualified examination
  • Confirmation of students’ admission to the Institute
  • I-20 Form 


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

There are multiple other schemes offered by Central Bank of India apart from the basic education loans viz. Cent Vidyarthi, Cent Vidyarthi for IIMs and 4 Reputed Institutions, and Cent Vidyarthi for Executive MBA. These are:

  • CSIS Scheme
  • Padho Pardesh
  • Skill Loan 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 Central Bank of India?

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

  1. Are minors eligible to apply for Central 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 Central 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 Central 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 Central Bank of India education loan?

Answer: Yes, a student must have secured a minimum 50% aggregate marks in their last qualifying examination (10+2 or Graduation). Relaxation of 10% in the marks is given to SC/ ST students

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


  • 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 Central Bank of India asks tangible security in lieu of the loan amount sanctioned along with assignment of future salaries in favour of Central 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 Central 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 Central 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 Central 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: Central 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 Central Bank of India does not carry any prepayment charges/ processing fee/ documentation 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 Central Bank of India education Loan (both for India and Abroad)?

Answer: Diploma/ Certificate courses are eligible under Central 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 Central 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 Central Bank of India?

Answer: You need at least 2 guarantors to avail loan from Central 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 Central Bank 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: 24% per annum on the outstanding amount is charged for the late EMI payment and INR 500 for every bounced cheque.

  1. Is the loan disbursed in name of the 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 at the bank's 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 a method of application of interest on education loan?

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

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

Male Students

MCLR + 2.00%

Female Students

MCLR + 1.50%

  1. What is interest subsidy on education loan?

Answer: Central 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.
  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 and ACSISOBCEBC 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 Central Bank of India?

Answer: Central Bank of India provides Group Life Insurance Cover Scheme for education loan borrowers. The premium of which will be borne by the bank

  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 at the airport by the foreign officials.

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

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

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