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.
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.
Eligibility to avail Cent Vidyarthi
Following points of eligibility need to be fulfilled to apply for Cent Vidyarthi Loan: -
Present Rate of Interest
MCLR + 2.00%
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
Course Period + 1 year
Repayment of the loan can be done after the moratorium period by mode of EMI
Additional Facts about Cent Vidyarthi
Course covered under Cent Vidyarthi
Expenses covered under Cent Vidyarthi
Following expenses are taken into account while calculation of loan amount: -
Documents required for Cent Vidyarthi
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:
Answer: The loan is granted in the name of the student
Answer: No, the loan can be executed both in name of student and co-borrower as both are equally responsible for repayment of loan.
Answer: There is no age restriction as stated by Central Bank of India. Borrowers must fulfil other eligibility criteria mentioned.
Answer: Yes, Minors aspiring for further studies can apply for education loan with help of legal representation from parents/ guardians.
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.
Answer: Margin can be paid on a year to year pro rata basis whenever bank disburses loan amount as per requirement.
Answer: You can either contact your nearest branch for the application form or details regarding the loan or apply online from the official website.
Answer: : Yes, you can apply online through Vidyalakshmi portal to avail for this loan.
Answer: Yes, by creating a login on Central Bank of India web portal, you can view all details related to education loan online.
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
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.
Answer: Yes, but it will need consent of all family members involved.
Answer: Yes any scholarship or assistantship will be a part of margin charged on education loan.
Answer: Course Period plus one year, or six months after getting a job
Answer: Tenure of education loan provided by Central Bank of India is maximum 15 years
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.
Answer: Expenses covered by Central Bank of India education loan are:
Answer: Yes, travel expenses are covered under this loan
Answer: This depends totally on bank’s discretion as whether a student meets other eligibility criteria or not.
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)
Answer: Central Bank of India offers no special benefits to students admitted in top premier institutes abroad.
Answer: The education loan offered by Central Bank of India does not carry any prepayment charges/ processing fee/ documentation charges.
Answer: Reasonable cost for the computer or laptop well be covered under the loan if it is required to complete the course.
Answer: Pan Card is one of the mandatory document required by banks these days. It is mandatory because:
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.
Answer: Yes, it is mandatory to have a co-borrower to avail loan from Central Bank of India.
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.
Answer: Documents required from the co-borrower are:
Answer: You need at least 2 guarantors to avail loan from Central Bank of India.
Answer: KYC requirements are the documents as a proof of personal identification and residence proof of the applicant as well as the co-borrower.
Answer: The maximum term for repayment is 15 years for Central Bank Education Loan
Answer: You can repay the loan after the moratorium period by mode of EMI or through post- dated cheques.
Answer: EMI stands for Equated Monthly Installments. It can be calculated by using the formula given below
Answer: 24% per annum on the outstanding amount is charged for the late EMI payment and INR 500 for every bounced cheque.
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
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.
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.
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
Answer: Interest rates for education loan provided by Central Bank of India are
MCLR + 2.00%
MCLR + 1.50%
Answer: Central Bank of India offers
Answer: The documents that need to be submitted are:
Answer: CSIS Scheme is not available for students who wish to pursue overseas studies whereas Padho Pardesh and ACSISOBCEBC is formulated for foreign education.
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.
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).
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.
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.
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
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
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.
Answer: NRIs are eligible for the loan if they have Indian citizenship and are Indian passport holder.
Answer: Visa is needed as a document proof but it is not a sole requirement.
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.
Answer: student can reach out to the nearest branch in case of any query.
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