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Karnataka Bank Education Loan

Last Modified : August 22, 2018

KBL Vidya Nidhi is one distinctive education loan scheme launched by Karnataka bank for education in India or abroad.

The bank provides Education Loans for India and Abroad  studies in premier universities along with government launches interest subsidy schemes. Karnataka Bank education loan is also available for minors that is for students aspiring for undergraduate studies can also apply.

Why Karnataka Bank?

With loan amount upto INR 10 Lacs for studies in India and INR 20 Lacs for overseas studies, Karnataka Bank education loan is extended with user friendly services and flexible repayment terms.

Are you eligible for Karnataka Bank Education Loan?

  • Indian National. Student must be an Indian National or an NRI having an Indian passport
  • 10+2.  You must have cleared 10+2 from a recognized board or institute with 50% marks.
  • Co-signer. A co-signer is a must when applying for loan from Karnataka Bank 
  • Eligible Institute. You must have secured admission in one of the premier institutes in India or abroad.

1. KBL Vidya Nidhi

Karnataka Bank has launched this exclusive KBL Vidya Nidhi Education Loan Scheme to provide financial support to students pursuing various graduate/ post-graduate professional or technical courses in reputed institutes or universities in India and Abroad.

The scheme is provided with maximum benefits including easy and flexible repayment terms with affordable interest rates.

What makes you eligible for KBL Vidya Nidhi Education Loan Scheme?

  • Indian National
  • Graduate or post-graduate professional, technical or career-oriented courses 
  • At least 50% marks in 10+2/ graduation level
  • Premier universities in India or Abroad 
  • Entrance test/ merit based admission

Present Rate of Interest

KBL VidyaNidhi

For General (Loan amount upto INR 7.5 Lacs)





Girl Student


Meritorious Girl Student


For General (Loan amount above INR 7.5 Lacs)





Girl Student


Meritorious Girl Student


For various courses/Skill Development Loans





Girl Student


Meritorious Girl Student


Quick facts about KBL Vidya Nidhi Education Loan Scheme


Upto loan 4 Lacs – No margin

Above 4 Lacs –

for India: 5%

for Abroad: 15%

Maximum Loan Limit

For India – INR 10 Lacs

For Abroad- INR 20 Lacs


Third party guarantee

Collateral security

Additionally, assignment of LIC policy in favor of bank amounting 100% of education loan amount

Assignment of Future salaries in favor of the Bank

Moratorium Period

Course Period + 1 year or 6 months after getting job

Repayment (Maximum)

Loan amount upto INR 7.50 Lacs: 10 years

Loan amount above INR 7.50 Lacs: 15 years

Prepayment Charges


Additional facts aboutKBL Vidya Nidhi Education Loan Scheme

  • No margin upto loan of INR 4 Lacs
  • No collateral or security for loan upto INR 4 Lacs
  • Minors are also eligible 
  • No prepayment charges

Courses Covered under KBL Vidya Nidhi Education Loan Scheme

For India

  • Graduation, Post- Graduation or Doctorate courses
  • Professional Courses including 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.

For Abroad

  • All Graduation, Post- Graduation or Doctorate courses
  • Professional Courses including Medical, Law, Dental, Engineering, etc.
  • Job Oriented Professional and technical courses
  • Post-graduation courses such as MBA/ MCA
  • Courses that are offered by CIMA, London and CPA, USA
  • Pilot Training, Shipping, aeronautical etc. courses that lead to a diploma or degree

Expenses Covered under KBL Vidya Nidhi Education Loan Scheme

  • Cost of Books, Uniforms or Stationery
  • Cost of Laptop or computer (if required)
  • Examination Fee
  • Library/ Laboratory Fee
  • Hostel Fee 
  • Travel Expenses/ Passage Money (for abroad)
  • Miscellaneous expenses

Documents Required for KBL Vidya Nidhi Education Loan Scheme

  • Duly filled KBL Application Form
  • 4 photographs
  • Identify proof and Age proof – Driving Liscence, Aadhar Card, Pan Card, or any other proof.
  • PAN Card (borrower and co- borrower)
  • Residence Proof - Driving Liscence, Aadhar Card, Pan Card, Passport or any other proof.
  • Income Proof of parents/ guardians along with income tax statement of last 2 years along with 6 months bank statement
  • Copy of prospectus of institute to calculate total expenses
  • Mark sheets of last qualified examination
  • Confirmation of students’ admission to the institute
  • Scholarship Details (if any)
  • Details of all existing loans

2. KBL Skill Loan Scheme

Karnataka Bank Limited (KBL) launched its skill loan scheme for students who wish to pursue skill based courses and prepare for the industry. Such courses enhance students’ knowledge to work in their specific field of interest and welcome various employment opportunities. The scheme is extended with maximum benefits to promote education with no financial constraints.

Eligibility to avail KBL Skill Loan Scheme

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

Quick facts about KBL Skill Loan Scheme



Maximum Loan Limit

INR 1,50,000


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


Courses Covered under KBL 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
  • Courses leading to a certificate/diploma/degree issued by such organization as per National Skill Qualification Framework (NSQF)

Expenses Covered under KBL Skill Loan Scheme

  • Tuition Fee
  • Examination Fee
  • Library/ Laboratory
  • Hostel Fee
  • Cost of Books, equipment, instrument or uniforms
  • Miscellaneous expenses
  • Reasonable cost of computer or laptop (if required)


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

Answer: There is one scheme offered by Karnataka Bank apart from the basic education loan. It is KBL Skill Loan Scheme. This scheme is launched by government to provide financial assistance to students

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 Karnataka Bank?

Answer: Maximum age limit for availing loan from Karnataka Bank is upto 35 years. A person above 35 years can also apply only on specific terms and conditions.   

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

Answer: You can either contact your nearest branch for the application form or details regarding the loan or apply online.

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

Answer: Yes, a student must have secured a minimum aggregate of 50% marks in their last qualifying examination (10+2 or Graduation)

Q. What is the discount/ rebate offered by Karnataka bank?


  • 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 Karnataka bank asks tangible security in lieu of the loan amount sanctioned along with assignment of future salaries in favour of Karnataka 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 Karnataka Bank is 10 years for loan amount upto INR 7.50 Lacs and 15 years for loan amount above INR 7.50 Lacs.

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 Karnataka 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 Karnataka Bank?

Answer: Yes, travel expenses are covered under this loan

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

Answer: Yes, even if you have taken admission through management quota, you are eligible for education loan by Karnataka bank

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: Karnataka Bank provides no such provision or special benefit to the students who secure admission in top premier institutes

Q. What is the processing fee or prepayment charges?

Answer: The education loan offered by Karnataka Bank does not carry any processing fee or any other charges

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

Answer: Yes diploma or certificate courses are eligible under Karnataka 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 Karnataka 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. 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 is 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 Karnataka Bank’s official website.

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 category of Institutes. Refer the table below:

KBL VidyaNidhi

For General (Loan amount upto INR 7.5 Lacs)





Girl Student


Meritorious Girl Student


For General (Loan amount above INR 7.5 Lacs)





Girl Student


Meritorious Girl Student


For various courses/Skill Development Loans





Girl Student


Meritorious Girl Student


Q. What is interest subsidy on education loan?

Answer: Karnataka Bank offers KBL Skill Loan Scheme for students who wish to pursue skill based courses and prepare for the industry. The maximum loan amount offered under this scheme is INR 1,50,000.

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 Karnataka 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 Karnataka Bank?

Answer: There are no such additional benefits on availing loan from Karnataka Bank. Though, there are no processing or pre-payment charges applied by bank on education loan.

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 1444/ 080- 22021807/ 08/ 09

Customer Care Id: