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Indian Bank Education Loan For Abroad

Last Modified : May 09, 2018

Studying overseas is one dream that most of ambitious students dream to enhance the academic approach in their specific field of interest. To ease this burden, Indian Bank have launched multiple distinct schemes viz. IBA Model Education Loan Scheme, IB Education loan prime, and IB Skill Loan Scheme for students aspiring for education in India and Abroad.

The Indian state-owned bank, Indian Bank is one of the top performing public sector bank in India. The financial services company is now home to 20,924 employees along with an extended network of 2682 branches. The 110 years old bank now have 227 Overseas Correspondent banks in 75 countries

Interested students can also avail for various other schemes such as Central Sector Interest Subsidy Scheme for Education Loan, and Padho Pardesh Interest Subsidy Scheme for Education Loans to students belonging to Minority Community to ease their loan liability.

1. IBA Model Education Loan Scheme

Indian Bank launched this scheme to provide financial support to deserving students who wish to pursue higher studies in reputed foreign universities. Indian Bank offers loan with flexible repayment terms and affordable interest rates.

Eligibility to avail IBA Model Education Loan Scheme

  • Student must be an Indian National
  • He/ She must have secured admission to Graduation/ Post Graduation/ Diploma courses in any recognized foreign institute or university
  • He/ She must have passed required course with essential grades

Key Details of IBA Model Education Loan Scheme

  • Zero Margin for Loan upto INR 4 Lacs
  • No collateral is required if the loan is less than INR 4 Lacs
  • Loan is sanctioned conjointly to the applicant and his/ her guardian
  • 0.50% concession to girl students

Present Rate of Interest

Interest Rate for all amounts is 12.50% per annum

Margin

Upto INR 4 Lacs: Nil

Above INR 4 lacs: 15%

 

Maximum Loan Limit

INR 20 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

Expenses covered under IBA Model Education Loan Scheme

  • 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
  • Miscellaneous expenses required for completion of the course- study tours, project work, thesis, etc.
  • Reasonable cost of computer or laptop (if required)
  • Travel Expenses

Courses Covered under IBA Model Education Loan Scheme

  • Graduation, Post-Graduation, Doctorate courses offered by reputed foreign universities
  • Technical, Professional or any other Job Oriented courses offered by reputed foreign universities
  • Courses like Aeronautical, Pilot Training, Shipping, etc. (approved by Director General of Civil Aviation/ Shipping in India) that lead to Degree or Diploma.
  • Post- graduation courses such as MCA, MBA, MS, etc.
  • Post Graduate Diploma courses approved by reputed foreign universities or organizations.
  • Courses conducted by CIMA, London or CPA, USA etc.

Documents required for IBA Model Education Loan Scheme

  • Identity Proof such as Passport, Voter’s ID, Driving Licence or PAN Card
  • Mark sheet of recently qualified public exam for school, college in India
  • Admission Proof: Fee receipts, Transfer certificate, etc.
  • Schedule of expenses for course
  • Community Certificate
  • Two recent passport size photographs of applicant, co-obligant and guarantor
  • Educational Proof such as copy of admission letter along with fee structure, mark sheets, SSC, HSC and degree course certificates
  • Salary Proof such as Latest salary slip, Form 16 and recent salary certificate

Interest Subsidy Scheme for students pursuing higher studies abroad

  • Padho Pardesh - Education loan scheme for overseas studies to minority community students

Padho Pardesh scheme was founded under the initiative of Prime Ministers new 15 point programme to benefit the minority community. Padho Pardesh scheme of Interest Subsidy on education loans for overseas studies aims to promote academic advancement of students belonging to minority communities. The scheme provides 100% interest subsidy to students belonging to minority community

How to Avail Indian Bank ‘Padho Pardesh’ Subsidy Scheme?

Students can yield benefits of the scheme by following the below mentioned procedure:

  • Students are supposed to inform their lending banks about the recent launched scheme of Padho Pardesh by Ministry of Minority Affairs.
  • Then the students have to submit the proof of their eligibility for the particular scheme
  • If a student is eligible, the lending bank will feed the students information into portal of Padho Pardesh.
  • The portal will remain open for the period of two month in every quarter.

Courses covered under Padho Pardesh Scheme

Courses that are covered by Government of India under this scheme are as follows:

Arts/ Humanities/ Social Sciences

Commerce

Pure Science

Engineering

Bio- technology/ Genetic Engineering

Industrial Environmental Engineering

Nano- technology

Marine Engineering

Petro-chemical Engineering

Plastic Technology

Cryogenic Engineering

Mechatronics

Automation Robotics including artificial intelligence

Laser Technology

Low Temperature Thermal Dynamics

Art Restoration Technology

Optometry

Dock and Harbour Engineering

Imaging System Technology

Composite Materials Engineering including Decentralized power

Packaging Engineering/ Technology

Nuclear Engineering

Information Technology including Computer Engineering, Software, Software Quality assurance, etc.

Industrial Safety Engineering

Medical

Agriculture & Agro Technology

Agronomy

Floriculture & Landscaping

Forestry & Natural Resources

Food Sciences & Technology

Plant Pathology

Horticulture

Energy Studies

Farm Power & Machinery

Veterinary Sciences

Soils & Water Management

Plant Breeding & Genetics

Small- scale Rural Technology

Ocean & Atmospheric Sciences

MBA/MCA

*The courses might change as per discretion of Ministry

  • ACSISOBCEBC Subsidy

Dr. Ambedkar Central Sector Scheme of Interest Subsidy on Education Loan for overseas studies for OBCs and other economically backward classes. This scheme is implemented by Ministry of Social Justice and Empowerment, Government of India.

The scheme was launched to provide financial assistance to deserving students belong to OBC Community or other backward classes.

Key Details about the Scheme

  • Scheme is applicable only for higher studies abroad
  • Student must be an Indian national, if he/ she gives up his citizenship during the tenure of the loan, his/ her subsidy will be discontinued
  • A student can avail this scheme only once for pursuing undergraduate or postgraduate course
  • Interest subsidy is not for students who discontinue the course or are expelled from institution (Medical reasons will be exempted)
  • Scheme is applicable to courses leading to masters, M.Phil. or Ph.D. degree
  • If student violates any condition of the scheme, the subsidy will be discontinued
  • Adhaar number is mandatory to avail this scheme

FAQs

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

Answer: There are multiple other schemes offered by Indian Bank apart from the basic education loans. These are:

  • CSIS Scheme
  • Padho Pardesh
  • ACSISOBCEBC Subsidy

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 Indian Bank?

Answer: The age limit at time of enrolment is 16 to 50 years. Borrower should be maximum 60 years at time of maturity, beyond that the loan tenure will automatically end. 

Q. Are minors eligible to apply for Indian 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 Indian 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 Indian 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 Indian 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 Indian 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 Indian Bank asks tangible security in lieu of the loan amount sanctioned along with assignment of future salaries in favour of Indian 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 Indian Bank is maximum 15 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 INDIAN 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 Indian 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: Indian Bank does not provides any additional concession to students who have secured admission in top rated institutes abroad.

Q. What is the processing fee or prepayment charges?

Answer: The education loan offered by Indian Bank does not carry any prepayment charges. 1% processing fee is charged that is refundable upon the acquisition of loan.

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

Answer: Diploma courses are eligible under INDIAN 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 Indian 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 Indian Bank?

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

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 for all amounts is 12.50% per annum

Q. What is interest subsidy on education loan?

Answer: Indian Bank offers

  • CSIS- Interest Subsidy scheme for economically weaker sections and to promote education amongst them
  • ACSISOBCEBC Subsidy for financial support to students belonging to OBC community or other reserved categories.
  • Padho Pardesh scheme for students who wish to pursue studies abroad

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: CSIS Scheme is not available for students who wish to pursue overseas studies whereas Padho Pardesh and ACSISOBCEBC Subsidy schemes are formulated for foreign education.

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. 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 Indian Bank?

Answer: Indian Bank provides life insurance coverage to student borrower under ‘New IB Jeevan Vidya Scheme’. The premium of which will be borne by the bank.  

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: 1800 425 00 000/ 1800 425 4422

Customer Care Id: indmail@Indianbank.co.in, ibhocustomerservice@indianbank.co.in

Local rates apply on every call