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IDBI Bank Education Loan

Last Modified : June 27, 2018

IDBI Bank provides a variety of education loan such as Loan for Vocational/ Non-Vocational courses, Education Loan for students taking admission through management quota along with other government launched interest subsidy schemes such as Skill Loan Scheme, Padho Pardesh, CSIS, etc. 

IDBI Bank Education Loan for Abroad is another segment wherein the bank funds education of students aspiring to study abroad. 

Why IDBI Bank?

The bank provides Education Loan for India and Abroad with flexible repayment terms and affordable rate of interest.

Are you eligible for IDBI Bank Education Loan?

  • Indian National. Student must be citizen of India or a holder of Indian passport.
  • 10+2 qualified. One must have cleared 10+2 from a recognized board of institutions.
  • Entrance Exam/ Merit Based. Students must have secured admission through merit or entrance exam
  • Co-Signer. A co-borrower is a must while applying for an education loan.

How to apply for IDBI Bank Education Loan?

You can apply online or offline through official website or by visiting the branch respectively.

For Online:

If a person is applying for the loan through official website then he can follow the below given procedure:

  • Visit the official website
  • Click on Apply Online
  • Navigate to Education Loan from drop down menu
  • Fill up the form with all the necessary details
  • Upload the signature, photograph other documents required
  • Submit the Form
  • Take the print out of application form
  • After that visit the nearby IDBI Bank for the further proceedings

For Offline:

For offline procedure, student can visit the bank and ask for application form for education loan. The bank representative will then be able to guide you with all necessary details and information about margin money, interest rates, and eligibility criteria about the suitable loan for you.

Types of IDBI Education Loans with detailed elucidation is curated below covering every aspect of education loan. 

1. IDBI Education Loan for Non- Vocational Courses

IDBI Bank launched its Education Loan scheme to provide financial assistance to deserving/ meritorious students who wish to pursue vocational courses from premier institutes. The loan is extended to students with maximum benefits such as no margin for loan upto INR 4 Lacs.

What makes you eligible for Education Loan for Non- Vocational Courses?

  • Indian National
  • 10+2 pass
  • Graduation/ post-graduation course
  • Entrance exam or merit-based admission
  • Recognized foreign university/ institute

Present Rate of Interest

Loan amount upto INR 10 Lacs

1 year MCLR + 0.85%

Loan amount above INR 10 Lacs

1 year MCLR + 1.45%

Quick Facts about IDBI Education Loan

Margin

Upto INR 4 Lacs: Zero Margin

Above INR 4 Lacs: 5%

Maximum Loan Limit

INR 10 Lacs

Security

Upto INR 4 Lacs: No security required

From INR 4 to 7.5 Lacs: Third Party Guarantee

Above INR 7.5 Lacs: Tangible security with suitable margin.

Building/ Land equal to 1.33 times of actual loan

Moratorium Period

Course Period + 1 year

Repayment (Maximum)

Upto 7.5 Lacs: 10 years

Above 7.5 Lacs: 15 years

Prepayment Charges

Nil

Courses Covered underEducation Loan for Non- Vocational Courses

  • Graduation/ Post Graduation/ PG Diploma courses approved by UGC, Govt., AICTE, AIBMS, IMCR, etc. 
  • Technical/ Professional/ Job oriented courses
  • Technical diploma courses after 10th standard, offered by polytechnic institutions
  • Approved courses offered by foreign universities in India

Expenses Covered under Education Loan for Non- Vocational Courses

  • Tuition Fee
  • Examination Fee
  • Library/ Laboratory Fee
  • Hostel Fee 
  • Cost of Books, equipment, instrument or uniforms
  • Miscellaneous expenses- study tours, project work, thesis, etc.
  • Reasonable cost of computer or laptop (if required)
  • Insurance Premium for Student borrower

2. IDBI Education Loan for Vocational Courses

Education Loan for Vocational Course is a distinct loan scheme that extends financial support to students who wish to pursue Vocational courses from recognized institutes or universities. Vocational courses are job oriented courses that span for less duration and prepares students for industry.

Are you eligible for Education Loan for Vocational Courses?

  • Indian National
  • 10+2  pass
  • Graduation/ post-graduation courses
  • Entrance exam or merit-based admission
  • Recognized foreign university/ institute

Present Rate of Interest

The rate of interest on all amounts is 11% (BR+1%) along with 1 year MCLR +1.35%

Quick Facts about Education Loan for Vocational Courses

Margin

No margin

Maximum Loan Limit

Course duration

Upto 3 Months: INR 20,000

From 3 to 6 Months: INR 50,000

From 6 Months to 1 Year: INR 75,000

Above 1 Year: INR 1,50,000

Security

No collateral or third party guarantee required.

Moratorium Period

Course Period + 1 year

Repayment (Maximum)

Upto 50,000: upto 2 years

From 50,000 to 1 Lac: 2 to 5 years

Above 1 Lac: 3 to 7 years

Prepayment Charges

Nil

Courses Covered underEducation Loan for Vocational Courses

  • Vocational or skill development courses
  • Courses that span for 2 months to 3 years
  • Courses offered by recognized and reputed institutes/ universities
  • Job oriented courses

Expenses Covered under Education Loan for Vocational Courses

  • Tuition Fee
  • Examination Fee
  • Library/ Laboratory Fee
  • Hostel Fee 
  • Cost of Books, equipment, instrument or uniforms
  • Caution deposit
  • Miscellaneous expenses- study tours, project work, thesis, etc.
  • Reasonable cost of computer or laptop (if required)
  • Insurance Premium for Student borrower

3. Education Loan for students who secure admission through Management Quota

IDBI Bank has launched this scheme for students who could not secure admission to an institute or university on merit basis. The loan is sanctioned to deserving candidates to extend financial support in payment of management quota fee along with other expenses.

Eligibility to avail Education Loan for Students secure admission through Management Quota

  • Indian National
  • 10+2 pass
  • Graduation/ Post-Graduation/ Diploma course 
  • Admission through management quota 
  • No Minimum age limit
  • Maximum (at time of loan maturity)- 50 years

Present Rate of Interest

The present rate of interest is 13.50% (BR + 3.50%)

Quick Facts about Education Loan for Students secure admission through Management Quota

Margin

15%

Maximum Loan Limit

INR 10 Lacs

Security

Tangible security with suitable margin.

Building/ Land equal to 1.33 times of actual loan

LIC Policy or any other government policy equal to 1.33 times of actual loan

Fixed deposits with IDBI Bank

Moratorium Period

Course Period + 1 year

Repayment (Maximum)

Moratorium period + 120 months 

Prepayment Charges

2% in amount of prepayment to be charged if prepaid before 6 months

Courses Covered under IDBI Education Loan for Students who secure admission through Management Quota

  • Graduation/ Post Graduation/ PG Diploma courses approved by UGC, Govt., AICTE, AIBMS, IMCR, etc. 
  • Technical/ Professional Job oriented courses
  • Technical diploma courses after 10th standard, offered by polytechnic institutions
  • Approved courses offered by foreign universities in India

Expenses Covered under IDBI Education Loan for Students who secure admission through Management Quota

  • Tuition Fee
  • Management Quota fee
  • Examination Fee
  • Library/ Laboratory Fee
  • Hostel Fee 
  • Cost of Books, equipment, instrument or uniforms
  • Caution deposit
  • Miscellaneous expenses- study tours, project work, thesis, etc.
  • Reasonable cost of computer or laptop (if required)
  • Insurance Premium for Student borrower

4. Education Loan Scheme for Specialised Courses

Education Loan Scheme for specialized courses is loan initiative taken up by IDBI bank to provide financial assistance to students pursuing degree/ diploma course. This scheme covers courses that are job oriented, which may or may not be offered by the recognized institution but attain a significant standing in the job market.

Eligibility to avail IDBI Education Loan Scheme for Specialised Courses

  • Indian National
  • Degree/Diploma courses
  • For job oriented course
  • 10+2 pass

Quick Facts aboutIDBI Education Loan Scheme for Specialised Courses

Margin

No margin

Maximum Loan Limit

INR 15 Lacs

Security

Upto INR 4 Lacs: No security required

From INR 4 to 7.5 Lacs: Third Party Guarantee

Above INR 7.5 Lacs: Tangible security with suitable margin.

Assignment of students future salaries toward the bank

Moratorium Period

No moratorium period

Repayment (Maximum)

EMI for maximum 7 years  

Prepayment Charges

Nil

Courses Covered under Education Loan Scheme for Specialised Courses

  • Job Oriented courses
  • Skill enhancement courses
  • Career Advancement courses
  • For example: SAP, .net, C-DAC, Management programmes for executives/ professionals, etc.

Expenses covered under Education Loan Scheme for Specialised Courses

  • Payment of 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, equipment, instrument or uniforms
  • Caution deposit
  • Miscellaneous expenses required for completion of the course- study tours, project work, thesis, etc.
  • Reasonable cost of computer or laptop (if required)
  • Insurance Premium for Student borrower

5. Skill Loan Scheme

IDBI Bank Skill Loan Scheme is launched to provide monetary support to students who wish to pursue courses to develop skills and prepare for job industry. The scheme extends financial assistance with maximum benefits like no collateral security and east repayment terms.

Eligibility to avail IDBI Skill Loan Scheme

  • Indian National
  • Course offered by Industrial Training Institutes (ITIs) or Polytechnics recognized by State/ Central Boards
  • Entrance exam or merit-based admission

Present Rate of Interest

The rate of interest to all amounts is 1-year MCLR +1.35%

Quick Facts about Skill Loan Scheme

Margin

No margin if interest is serviced in moratorium period

10% 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)

Upto 50,000: 3 years

Between 50,000 to 1 Lac: 5 years

Above 1 Lac: 7 years

Prepayment Charges

Nil

Courses Covered under IDBI Skill Loan Scheme

  • Courses recognized by:
  • Industrial Training Institutes (ITIs)
  • Polytechnics Institutes
  • School recognized by Central or State Education Boards
  • College affiliated to recognized university
  • Training partners affiliated to National Skill Development Corporation (NSDC), Sector Skill Councils, State Skill Mission, and State Skill Corporation
  • Diploma/ Degree courses recognized by an organization as per National Skill Qualification Framework (NSQF)

Expenses Covered under IDBI Skill Loan Scheme

  • Tuition Fee
  • Examination Fee
  • Library/ Laboratory Fee
  • Hostel Fee
  • Cost of Books, equipment, instrument or uniforms
  • Caution deposit
  • Miscellaneous expenses- study tours, project work, thesis, etc.
  • Reasonable cost of computer or laptop (if required)
  • Insurance Premium for Student borrower

6. Udaan- Unique Saving cum Education Loan

IDBI Udaan is a unique saving cum education loan scheme that extends financial support to the parents or guardians of students studying in class 8th and 10th. Students have to open Joint RD account with his/ her earning parents. RD installments have to be paid without defaults. The maximum loan amount is 5 times of RD maturity value.

If a student already holds a saving account, opening a new account is not necessary. The student has the leverage to use the value of RD for any purpose of his/ her choice

For more details about IDBI Udaan- Click Here

General Documents required for all kind of Loans

  • Duly filled IDBI Application Form
  • Identify proof and Age proof
  • Residence Proof
  • Income Proof of parents/ guardians along with income tax statement of last 2 years
  • Copy of prospectus of the institute to calculate total expenses
  • Mark sheets of last qualifying examination
  • Confirmation of students’ admission to the institute

FAQs

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

Answer: There are multiple other schemes offered by IDBI Bank apart from the basic education loans viz. Education Loan for Vocational Courses, Education Loan for Non- Vocational Courses, Education Loan for students who secure admission through Management Quota, and Education Loan for Specialised Courses. The Scheme are:

  • CSIS Scheme
  • Padho Pardesh
  • Skill Loan Scheme
  • Udaan- Unique saving cum Education Loan

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.

What is the age limit for availing loan in IDBI Bank?

Answer:

  • Education Loan for Vocational/ Non-Vocational Courses: There is no age restriction for the applicant applying for education loan from IDBI Bank. He/ she should only meet the other stated eligibility criteria’s.
  • Education Loan for Students admitted through Management Quota: Minimum age limit for salaried and Self Employed is 21 years and maximum is 65 years and 70 years respectively.

Q. Are minors eligible to apply for IDBI 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 IDBI 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 IDBI 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 IDBI 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 IDBI Bank?

Answer:

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

Q. What all is included in tangible collateral security?

Answer: Mostly IDBI Bank asks tangible security in lieu of the loan amount sanctioned along with assignment of future salaries in favour of IDBI 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. Can I place my family property as collateral?

Answer: Yes, but it will need consent of all family members involved.

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 IDBI Bank is different for different variant of loans it offers:

  • Education Loan for Vocational Courses: 10- 15 years
  • Education Loan for Non Vocational Courses: 2- 7 years
  • Education Loan for students admitted through Management Quota: 10 years
  • Education Loan for Specialised Courses: Maximum 7 years

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 IDBI Bank education loan are:

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

Q. I have taken admission through management quota. Am I eligible?

Answer: Yes, The bank provides special loan variant for students who take admission through management quota. 

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: IDBI Bank provides 1.5% concession to students who have secured admission in any premier institutes. The rate of Interest charged for students taking admission to top premier institutes is 6M MCLR + 0.05%

Q. What is the processing fee or prepayment charges?

Answer: The education loan offered by IDBI Bank have:

  • Prepayment Charges: 2% on outstanding amount id loan is foreclosed/ part prepaid any time before the expiry of moratorium period.
  • Processing Fee: No processing fee is charged for studies in India under Education Loan for Vocational/ Non Vocational Courses. 1% processing fee is charged for students who take admission through Management Quota.

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 IDBI Bank education Loan (both for India and Abroad)?

Answer: Diploma courses are eligible under IDBI 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 IDBI 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 IDBI Bank?

You need at least 2 guarantors to avail loan from IDBI Bank.

Q. What is the KYC requirement in education loan?

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:

  • Education Loan for Vocational Courses: For loan amount upto INR 7.50 Lacs- 10 years and for amount above INR 7.50 Lacs- 15 years
  • Education Loan for Non Vocational Courses: Loan upto INR 50,000: upto 2 years; Loan from INR 50,000 to 1 Lac: 2 to 5 years; Loan Above INR 1 Lac: 3 to 7 years
  • Education Loan for students admitted through Management Quota: Moratorium period + 10 years
  • Education Loan for Specialised Courses: Maximum 7 years

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 IDBI 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. 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

Q. What is interest rate of education loan?

Answer: The interest rate is different for different loan offered:

Q. Education Loan for Vocational Courses:

Loan amount upto INR 10 Lacs

1 year MCLR + 0.85%

Loan amount above INR 10 Lacs

1 year MCLR + 1.45%

Education Loan for Non Vocational Courses: The rate of interest on all amounts is 11% (BR+1%) along with 1 year MCLR +1.35%

Education Loan for students admitted through Management Quota: The present rate of interest is 13.50% (BR + 3.50%)

Q. What is interest subsidy on education loan?

Answer: IDBI Bank offers

  • Interest Subsidy scheme for economically weaker sections and to promote education amongst them
  • Skill Loan Scheme- for students who wish to pursue Skill based courses and enhance their skills and career prospects.
  • Padho Pardesh scheme for students who wish to pursue studies abroad
  • Udaan – For parents/ guardians of students studying in 8th or 10th class. It is a unique scheme formulated as saving cum education loan scheme.

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. 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).

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. 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 IDBI Bank?

Answer: There is no additional benefit mentioned on the official website while applying fro

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. 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:

Toll Free: 1800 200 1947; 1800 22 2070

Non Toll Free: (+91 22) 6693 7000

Local rates apply on every call