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Dhanlakshmi Bank Education Loan for India and Abroad

Last Modified : May 07, 2018

Almost a decade old, Dhanlakshmi Bank is now categorized as a Scheduled Commercial Bank. With 280 branches and 398 ATMs, it has extended its network to various states in India viz. Kerala, Karnataka, Tamil Nadu, Andhra Pradesh, Maharashtra, Telangana, Gujarat, West Bengal, Delhi, Madhya Pradesh, Uttar Pradesh, Punjab, Rajasthan, Goa, Chandigarh, and Haryana.

Dhanlakshmi Bank understands that even when education is the first right of every child in India, many meritorious children could not pursue their desired education due to lack of finances. So they offer affordable education loan to the students for pursuing educational and professional courses.

The Bank has implemented the Centralised Banking Solution (CBS) at all its branches for providing seamless banking services to its customers.

1. Dhanlakshmi Bank Education Loan

Students can avail Dhanlakshmi Bank Education Loan to purse various courses in India and abroad. The best part being, apart from taking care of the tuition fee of the course, the education loan offered by Dhanlakshmi Bank also covers other expenses such as air travel, boarding and lodging, insurance premiums, laptops, and more.

The loan amount is approved based on the course for which students are seeking the education loan. The loan is provided with flexible repayment terms and affordable rate of interest to ease the loan liability.

Eligibility to Avail Dhanlakshmi Bank Education Loan

For Pursuing a Course in India

  • The students and their parents (in case they are co-borrowers) must be Indian citizens.
  • The applicant must have been admitted for a higher education course at a recognized institution in India through some entrance test or merit list, post passing the qualifying exam.
  • The course should be of maximum 5 years duration
  • The various courses in India for which you may avail the Dhanlakshmi Bank education loan include diploma, graduation, post-graduation degree, and post-graduation diploma in engineering, medical, agriculture, dental science, veterinary, pharmacy, IT, computer science, science, management, arts, commerce, and more from recognised colleges and universities.

For Pursuing a Course from Abroad

  • The students and their parents (in case they are co-borrowers) must be Indian citizens.
  • The students must be of at least 18 years of age at the time of their loan application.
  • The student must have been admitted for a higher education course at a recognized institution in the mentioned country
  • Copies of results of the qualifying exam (for the entrance examination of the course in which the student is admitted) and the entrance examination (such as GRE, TOEFL, SAT, GMAT, AGRE, or more), along with the copies of merit list and admission letter must be provided at the time of loan application.
  • Copies of passport, valid visa, and Form I-20 are required to be produced.
  • The various courses in the foreign countries for which you may avail the Dhanlakshmi Bank education loan include undergraduate and post-graduate courses in biological sciences, natural sciences, engineering, computer sciences, and business administration.

Key Benefits of Dhanlakshmi Bank Education Loan

  • No collateral or security for loan up to INR 4 lakhs
  • No processing charges
  • No prepayment charges
  • Simple documentation requirements
  • Quick approvals
  • Interest charged only on the amount used

Present Rate of Interest

Interest rate with subsidy

2% more than the base rate, which ends to 13.50% per annum

Interest rate without subsidy

3.75% more than the base rate, ending to 15.25% per annum

*The base rate is 11.50%

Margin

For India: 5%

For Abroad: 15%

Maximum Amount of Loan

For India: 10 Lacs

For Abroad: 20 Lacs

Security

For loan upto INR 4 Lacs: No collateral or security is required

For the loan above INR 4 Lacs: the student, parent, or guardian needs to produce satisfactory guarantee in the form of collateral security. Those may include insurance policies, shares, IVP, land, bank deposits, building, and more.

Processing Charges

Nil

Repayment (Maximum)

Repayment will commence after 6 months of completion of course or one month after student starts earning (whichever is earlier)

Prepayment Charges

Nil

2. Courses Covered under Dhanlakshmi Bank Education Loan

For India

  • Diploma, graduation, post-graduation degree, and post-graduation diploma in engineering, medical, agriculture, dental science, veterinary, pharmacy, IT, computer science, and science.
  • Post-graduation degree courses in arts, general science, commerce, management.
  • Post-graduation diploma course in computer application.

For Abroad

  • Undergraduate courses in biological sciences, natural sciences, engineering, and computer sciences
  • Post-graduate course in business administration.
  • Courses that are offered by CIMA, London and CPA, USA
  • Pilot Training, Shipping, aeronautical etc. courses that lead to a diploma or degree

Documents Required for Dhanlakshmi Bank Education Loan

  • Admission letter from the educational institution in which admission is taken. It should also contain details like year-wise fee, boarding and lodging expenses, and letter conforming scholarship if accorded by the student.
  • Copies of all certifications obtained by the student so far starting from class 10th.

Expenses Covered under Dhanlakshmi Bank Education Loan

  • Tuition or admission fee to college, institute or university
  • Examination fee or payment of fee to library or laboratory
  • Hostel fee and other charges applicable
  • Cost of books, study material, equipment, instrument or uniforms
  • Miscellaneous expenses required for completion of the course- study tours, project work, thesis, etc.
  • Reasonable cost of computer or laptop (if required)
  • For courses abroad, charges incurred in flights, incidental charges, and more
  • Insurance premium for student

FAQs

Q. What schemes does Dhanlakshmi Bank considers for its education loans?

Answer: There is one other scheme offered by Dhanlakshmi Bank apart from the basic education loans. That is: Dhanlakshmi loan for Vocational Education and Training

Q. In whose name is the loan granted?

Answer: The loan is granted in the name of the student

Q. 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.

Q. What is the age limit for availing loan in Dhanlakshmi Bank?

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

Q. What should be the duration of course to avail loan from Dhanlakshmi Bank?

The maximum duration of the course should be:

  • For India: 5 years
  • For Abroad: 3 years

Q. Are minors eligible to apply for Dhanlakshmi Bank Education Loan?

Answer: Yes, Minors aspiring for further studies can apply for education loan with help of legal representation from parents/ guardians.

Q. 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.

Q. 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.

Q. Where can I avail Dhanlakshmi Bank 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.

Q. Is there any provision to apply for loan online?

Answer: : Yes, you can apply online through Vidyalakshmi portal to avail for this loan.

Q. Can I view my loan statement online if I am an existing education loan borrower?

Answer: Yes, by creating a login on Dhanlakshmi Bank web portal, you can view all details related to education loan online.

Q. Is there any minimum aggregate marks to meet the eligibility criteria to avail Dhanlakshmi Bank education loan?

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

Q. What is the discount/ rebate offered by Dhanlakshmi Bank?

Answer:

  • 0.50% concession is given to girl students
  • Eligibility criteria and margin on education loan is relaxed for SC/ST students

Q. What all is included in tangible collateral security?

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

Q. Is scholarship or assistantship included in the margin?

Answer: Yes any scholarship or assistantship will be a part of margin charged on education loan.

Q. What is Moratorium Period?

Answer: Course Period plus one year, or six months after getting a job

Q. What is tenure of an education loan?

Answer: Tenure of education loan provided by Dhanlakshmi Bank is maximum 7 years as per IBA Model Loan Scheme.

Q. 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.

Q. What all expenses are covered under this course?

Answer: Expenses covered by Dhanlakshmi Bank education loan are:

  • Tuition/ college/ hostel fee
  • Examination/ lab/ library fee
  • Books/ uniform/ instruments
  • Caution deposit
  • Passage money for studies abroad, etc.

Q. Will my travel expense will be covered if I take loan from Dhanlakshmi Bank?

Answer: Yes, travel expenses are covered under this loan

Q. 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.

Q. 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)

Q. Are there any special benefits if I have secured admission to one of the top premier institutes?

Answer: Dhanlakshmi Bank does not provides any additional concession to students who have secured admission in top rated institutes

Q. What is the processing fee or prepayment charges?

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

Q. 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. 

Q. 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

Q. Are diploma or certificate courses considered under Dhanlakshmi Bank education Loan (both for India and Abroad)?

Answer: Diploma courses are eligible under Dhanlakshmi Bank Education Loan. Regular degree or diploma courses like, shipping, pilot training, and aeronautical that are approved by Director General of Civil Aviation or Shipping.

Q. Is a co-borrower necessary for loan?

Answer: Yes, it is mandatory to have a co-borrower to avail loan from Dhanlakshmi Bank.  

Q. 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.

Q. 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).

Q. How many guarantors do I need to borrow loan from Dhanlakshmi Bank?

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

Q. 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.

Q. 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

Q. 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.

Q. 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 Dhanlakshmi Bank’s official website.

Q. 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.

Q. 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

Q. 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.  

Q. 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. 

Q. What is interest rate of education loan?

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

Interest rate with subsidy

2% more than the base rate, which ends to 13.50% per annum

Interest rate without subsidy

3.75% more than the base rate, ending to 15.25% per annum

Q. What is interest subsidy on education loan?

Answer: Dhanlakshmi Bank offers

  • Vocational Education and Training scheme is offered to students who wish pursue vocational courses to increase their career prospects.
  • Interest Subsidy scheme for economically weaker sections and to promote education amongst them

Q. 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

Q. 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.

Q. 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.

Q. 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 Dhanlakshmi Bank to calculate your tax benefit through their tax benefit calculator.

Q. 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.

Q. 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.

Q. 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 Dhanlakshmi Bank?

Answer: There are no additional benefits offered by Dhanlakshmi Bank mentioned on the official website. Borrowers can contact the nearest branch for the same.

Q. 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.

Q. Are NRIs eligible for the education loan?

Answer: NRIs are eligible for the loan if they have Indian citizenship and are Indian passport holder.

Q. Is Visa a necessary document for studying abroad?

Answer: Visa is needed as a document proof but it is not a sole requirement.

Q. 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.

Q. 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: 91-487-6617000

Local rates apply on every call