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Central Bank Education Loan

Last Modified : June 26, 2018

The bank provides education loans under 4 major schemes, which are Cent Vidyarthi, Cent Skill Loan, Cent Vidyarthi for IIMs and 4 reputed institutes and Cent Vidyarthi for Executive MBA. It provides Education loans for India and Abroad, for the amount as low as 50,000 and as high as INR 30 lacs, for pursuing their higher education.

The bank extends Central Bank Education Loan for Abroad with maximum loan amount upto INR 20 lacs and no margin upto INR 4 Lacs

Why Central Bank of India?

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. 

Here are some important facts and figures related to different variants of Central Bank Education Loan. Have a look:

1. Cent Vidyarthi

Central Bank of India’s Cent Vidyarthi is the flagship education loan scheme offered by the bank. Any student looking to pursue higher education in India or Abroad can avail this loan and continue his/her higher studies.

What makes you eligible for 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% marks
  • SC and ST candidates get a relaxation of 10% 
  • Entrance exam/ merit-based admission

Present Rate of Interest

For Male Students

MCLR + 2.00%

For Female Students

MCLR + 1.50%

Quick Facts about Cent Vidyarthi

Margin

Upto INR 4 Lacs: Nil

Above INR 4 lacs: 5%

 

Maximum Loan Limit

INR 10 Lacs

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

Upto INR 7.5 Lacs: 10 years

Above INR 7.5 Lacs: 15 years

Prepayment Charges

Nil

Additional Facts about Cent Vidyarthi

  • Zero Margin for Loan upto INR 4 Lacs
  • No collateral is required upto INR 4 Lacs
  • Loan is sanctioned conjointly to the applicant and his/ her guardian

Course Covered under Cent Vidyarthi

  • Graduation, Post- Graduation or Doctorate courses
  • Professional Courses: Medical, Law, Dental, Engineering, Hospital Management, Hotel Management, Event Management, Mass Communication, Fashion Studies, Agricultural Studies, etc.
  • Courses that are offered by reputed foreign universities in India
  • Regular/ Evening Courses conducted by colleges/ universities approved by UGC/ Government/ AICTE/ AIBMS/ ICMR etc.
  • Degree/ Diploma courses in Teacher Training, Nursing, and B.Ed. 

Expenses covered under Cent Vidyarthi

  • Tuition Fee including hostel fee
  • Examination/ library/ laboratory fee
  • Cost of books, equipment’s, instruments or uniforms
  • Cost of computer (if required)
  • Caution deposit/ building fund/ refundable deposit
  • Insurance premium of student (if applicable)
  • Miscellaneous expenses

2. Cent Vidyarthi for IIMs and 4 Reputed institutes

To pursue MBA from reputed institutes can cost as high as 22-23 Lacs and not a lot of people in India afford to pay such fee. However, Central Bank of India has a separate education loan scheme for such a course, which makes paying the fee an easy task.

Cent Vidyarthi Scheme for IIMs and 4 Reputed Institutes provides loan upto INR 30 lakhs to pursue MBA/PGDM courses.

What makes you eligible Cent Vidyarthi for IIMs and 4 Reputed Institutes

  • Indian National
  • IMs or one of the 4 reputed Institutes (list is mentioned below)

Present Rate of Interest

12 Months MCLR

Quick Facts about Cent Vidyarthi for IIMs and 4 Reputed Institutes

Margin

Nil

 

Maximum Loan Limit

INR 30 Lacs

Security

No security, collateral or third party guarantee is needed. Assignment of future income of student towards repayment of loan is needed.

An insurance policy for the amount of loan for the period of loan is to be assigned in the favor of bank.

Moratorium Period

Course Period + 1 year

Repayment (Maximum)

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

Upto INR 7.5 Lacs: 10 years

Above INR 7.5 Lacs: 15 years

Prepayment Charges

Nil

Additional facts about Cent Vidyarthi for IIMs and 4 Reputed Institutes

  • Zero Margin
  • No collateral security or third party guarantee
  • Loan is sanctioned in individual name of the student
  • Candidates may visit the nearest Central Bank of India branch for more details on this loan.

List of Institutes covered under Cent Vidyarthi for IIMs and 4 Reputed Institutes

List of IIMs considered

  • Indian Institute of Management, Ahmedabad, Gujarat
  • Indian Institute of Management, Bangalore, Karnataka
  • Indian Institute of Management, Kolkata, West Bengal
  • Indian Institute of Management, Indore, M.P and Mumbai Campus
  • Indian Institute of Management, Kashipur, Uttarakhand
  • Indian Institute of Management, Kozhikode, Kerala
  • Indian Institute of Management, Lucknow, U.P
  • Indian Institute of Management, Raipur, Chhattisgarh
  • Indian Institute of Management, Ranchi, Jharkhand
  • Indian Institute of Management, Rohtak, Haryana
  • Indian Institute of Management, Shillong, Meghalaya
  • Indian Institute of Management,  Trichhy, Tamil Nadu
  • Indian Institute of Management, Udaipur, Rajasthan
  • Indian Institute of Management, Amritsar , Punjab
  • Indian Institute of Management, Indore for IPM Programme and other similar Integrated 5 year programmes of IIMs.
  • Indian Institute of Management, Bodhgaya, Bihar
  • Indian Institute of Management, Nagpur

Reputed Institutes considered are:

  • Xavier Labour Relations Institute (XLRI), Jamshedpur
  • SP Jain Institute of Management and Research (SPJIMR), Mumbai
  • Management Development Institute (MDI), Gurgaon
  • Xavier Institute of Management (XIMB), Bhubaneswar

3. Cent Vidyarthi for Executive MBA

Central bank of India also provides special loans for pursuing Executive MBA in India. Under this scheme, loans up to 20 lakhs can be obtained without providing any tangible security. The scheme covers 22 business schools of the country, for which the loan can be obtained.

what makes you eligible for Cent Vidyarthi for Executive MBA

Following points of eligibility need to be fulfilled, to get such a loan: -

  • Indian national.
  • 2 years of work experience
  • Age Limit -23 years or above.
  • MBA course of selected institutes.

Present Rate of Interest

For Schedule A Institutes

Type of Borrower

Rate of Interest

Male Students

MCLR +0.50%

Female Students

MCLR

For Schedule B Institutes

Interest rate for all students is MCLR + 1.25%

Quick Facts about Cent Vidyarthi for Executive MBA

Margin

Nil

 

Maximum Loan Limit

20 Lacs

 

Security

Upto INR 20 Lacs: No security, collateral or third party guarantee is needed. Assignment of future income of student towards repayment of loan is needed.

Above INR 20 Lacs: 100% liquid security equivalent to the amount of loan is to be provided..

Moratorium Period

3 months after the completion of course

Repayment (Maximum)

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

Upto INR 7.5 Lacs: 8 years

Above INR 7.5 Lacs: 12 years

Prepayment Charges

Nil

Additional Facts about Cent Vidyarthi for Executive MBA

  • No Margin
  • No security in lieu of Loan sanctioned
  • No processing fee

Institutes covered under Cent Vidyarthi for Executive MBA

Following institutes are covered under Schedule A for such loan: -

  • Indian Institute of Management, Ahmedabad
  • Indian Institute of Management, Bangalore
  • Indian Institute of Management, Calcutta
  • Indian Institute of Management, Indore
  • Indian Institute of Management, Kashipur
  • Indian Institute of Management, Kozhikode
  • Indian Institute of Management, Lucknow
  • Indian Institute of Management, Raipur
  • Indian Institute of Management, Ranchi
  • Indian Institute of Management, Rohtak
  • Indian Institute of Management, Shillong
  • Indian Institute of Management, Trichy
  • Indian Institute of Management, Udaipur
  • Xavier Labour Relations Institute (XLRI), Jamshedpur
  • SP Jain Institute of Management and Research (SPJIMR), Mumbai
  • Management Development Institute (MDI), Gurgaon
  • Xavier Institute of Management (XIMB), Bhubaneswar

Institutes mentioned below are considered in Schedule B for this loan: -

  • Symbiosis Institute of Management
  • Faculty of Management Studies, University of Delhi
  • Jamnalal Bajaj Institute of Management (JBIMS)
  • Indian Institute of Foreign Trade
  • Indian School of Business (ISB), Hyderabad

4. Cent Skill Loan Scheme

Cent Skill loan is education loan for pursuing Vocational Education and Training. Loan of up to INR 1,50,000 can be obtained under this scheme. Vocational courses help candidates to enhance their skills and prepare them for better career opportunities.

Eligibility to avail Cent Skill Loan Scheme

  • Indian National
  • Course offered by Government Organization or supported by National Skill Development Corporation, State Skills Missions or State Skills Corporations
  • Degree/ Diploma/ certificate courses
  • No minimum age criterion 
  • Qualification should be as required

Present Rate of Interest

Rate of Interest on all amount is MCLR + 1.5%

Quick Facts about Cent Skill Loan Scheme

Margin

No margin if interest is serviced in moratorium period

5% of total cost in other cases

Maximum Loan Limit

INR 1,50,000

Security

No collateral or security is required

Moratorium Period

Course duration upto  1 year: Course period+6 months

Course duration above 1 year: Course period+12 months

Repayment (Maximum)

Loan upto 50,000: 3 years

Loan between 50,000 to 1 Lac: 5 years

Loan above 1 Lac: 7 years

Prepayment Charges

Nil

General Documents required for all kind of Loans

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

FAQs

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

Answer: 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% 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?

Answer:

  • 0.50% concession is given to girl students
  • 1% concession to students who have secured admission to any top premier institutes listed under List A and B provided by the bank
  • 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. 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 1% concession to students who secure admission to top premier institutes. Also, there is no margin implied and no collateral security asked while availing education loan from Central Bank of India.

  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 courses are eligible under Central 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.

  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 of

  •  Cent Vidyarthi Loan and Cent Vidyarthi for IIMs and 4 reputed institutions

Upto INR 7.5 Lacs: 10 years

Above INR 7.5 Lacs: 15 years

  • Cent Vidyarthi for Executive MBA

Upto INR 7.5 Lacs: 8 years

Above INR 7.5 Lacs: 12 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.
  1. What are the charges for late EMI payment?

Answer: 24% per annum on outstanding amount is charged for the late EMI payment and INR 500 for every bounced cheque.

  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 rate education loan scheme provided by Central Bank of India are:

The Interest Rate for Cent Vidyarthi is

For Male Students

MCLR + 2.00%

For Female Students

MCLR + 1.50%

  • The Interest Rate forCent Vidyarthi for IIMs and 4 Reputed Institutes

12 months MCLR

  • The Interest Rate forCent Vidyarthi for Executive MBA

For List A Institutes

Type of Borrower

Rate of Interest

Male Students

MCLR +0.50%

Female Students

MCLR

For List B Institutes

Interest rate for all students is MCLR + 1.25%

  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. 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. 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

Q.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. 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 22 1911 (Toll Free)/ 022 2264 3056

Local rates apply on every call

Customer Care Id: gmoper@centralbank.co.in