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Saraswat Bank Education Loan for India and Abroad

Last Modified : May 08, 2018

Nearly 100 years old, Saraswat Bank is an urban co-operative banking institution. Ever since, the bank have extended its network to 283 fully computerized branches in six states viz. Maharashtra, Gujarat, Madhya Pradesh, Karnataka, Goa and Delhi.

The bank have been upfront in eliminating financial constraints for students who wish to pursue their studies in India or Abroad. To take nation ahead in aspects of academic sphere, Saraswat Bank have launched distinct scheme namely Saraswat Bank Education Loan.

Interested students can also avail for scheme such as Padho Pardesh Scheme and Interest Subsidy Scheme for Saraswat bank Education Loan to ease their loan liability

1. Saraswat Bank Education Loan

Saraswat Bank to promote higher education in India and Abroad, offers comprehensive education loan. The Education loan is extended with flexible repayment options, affordable interest rates and special concessions for women. Saraswat Bank offers a unique feature wherein borrowers can invest in Saraswat Bank shares when they avail for loan.

Eligibility to avail Saraswat Bank Education Loan

  • Student must be an Indian National
  • Student should have secured admission to graduate or post-graduate professional, technical or career oriented courses viz. medicine, engineering, management, etc.
  • He/ She must have secured at least 50% marks in 10+2 or graduation level
  • He/ She should have secured admission in premier universities in India or Abroad through entrance test/ merit based selection process

Key Points in Saraswat Bank Education Loan

  • Bank covers 90% of cost of the fee and other expenses
  • 0.50% concession to girl students
  • 0.25% additional discount to institutes like IIMs, IITs, XLRI, or ISB
  • Borrowers can invest into Saraswat Bank’s shares while availing the loan

Present Rate of Interest

Category

Loan Amount

Floating

For IBA approved courses

Upto INR 50 Lacs

PLR- 3.75= 10.50%

Present PLR – 14.25% p.a.

For IBA non- approved courses

Upto INR 50 Lacs

PLR- 2.00= 12.25% p.a.

Margin

Upto loan 4 Lacs – No margin

Above 4 Lacs –

for India: 5%

for Abroad: 15%

Maximum Loan Limit

or India – INR 10 Lacs

For Abroad- INR 20 Lacs

Security

Loan upto INR 2 Lacs: 2 guarantors required

Loan upto and above INR 5 Lacs: hypothentication of household articles along with 2 guarantors

Moratorium Period

Course Period + 3 year or 6 months after getting job

Repayment (Maximum)

Maximum 12 years inclusive of moratorium period

Prepayment Charges

Nil

Courses covered under Saraswat Bank Education Loan

For India

  • All 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 or 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, Hospital Management, Hotel Management, Event Management, Mass Communication, Fashion Studies, Agricultural Studies, 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 Saraswat Bank Education Loan

  • Cost of Books, Uniforms or Stationery
  • Cost of Laptop or computer (Reasonable rate and as per demand of the course)
  • Examination Fee along with charges applied for library, laboratory
  • Hostel Fee along with charges applied for hostel mess
  • Travel Expenses or passage money for studies abroad
  • Miscellaneous cost incurred while completion of the course

Documents required for Saraswat Bank Education Loan

  • Duly filled 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

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

Q. How to Avail Saraswat Bank Bank ‘Padho Pardesh’ Subsidy Scheme?

Answer: 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

Interest Subsidy Scheme for Saraswat Bank Education Loan

Saraswat Bank offeres this scheme launched by HRD Ministry for economically weaker sections to promote importance of education amongst them. The scheme is available for students pursuing approved professional course from Institute or University in India. HRD Ministry, Government of India to extend financial support to deserving and meritorious students in need.

Key points of Interest Subsidy Scheme for Saraswat Bank Education Loan

  • Scheme is applicable only for courses offered in India
  • Student must not be already enrolled in recognized professional courses after XII in institutes established by acts of parliament
  • Annual gross family income should not exceed INR 4.5 Lacs
  • Interest subsidy is available upto moratorium period (Course Period+1 year)
  • Interest subsidy is available only once either for undergraduate/ post graduate/ diploma courses.

Courses Covered under Interest Subsidy Scheme for Saraswat Bank Education Loan

Undergraduate and Post Graduate courses in:

  • Engineering
  • Medical
  • Para-Medical
  • Agriculture
  • Veterinary
  • Law
  • Dental
  • Management
  • Computer Science

FAQs

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

Answer: There are multiple schemes offered by Saraswat Bank apart from the basic education loan. These are:

  • Padho Pardesh
  • Interest Subsidy Scheme

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 Saraswat Bank?

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

Q. Are minors eligible to apply for Saraswat 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 Saraswat 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 saraswat 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 Saraswat 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 Saraswat bank?

Answer:

  • 0.50% concession is given to girl students
  • 0.25% concession to students securing admission to top premier institutes viz. IIMs, IITs, XLRI, ISB.
  • Eligibility criteria and margin on education loan is relaxed for SC/ST students

Q. What all is included in tangible collateral security?

Answer: Mostly Saraswat bank asks tangible security in lieu of the loan amount sanctioned along with assignment of future salaries in favour of Saraswat 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 Saraswat Bank is maximum 12 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 Saraswat 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 Saraswat 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: Saraswat Bank provides additional 0.25% concession to students who secure admission to premier institutes such as IITs, IIMs, XLRI, or ISB.

Q. What is the processing fee or prepayment charges?

Answer: The education loan offered by Saraswat Bank does not carry any prepayment charges or processing charges for studies in India. For studies abroad, 0.5% of loan amount is charged as processing fee on loan amount.

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

Answer: Yes diploma or certificate courses are eligible under Saraswat 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 Saraswat 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 Saraswat Bank?

Answer: You need at least 2 guarantors to avail loan from Saraswat 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 is 12 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 Saraswat 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. Refer the table below:

Category

Loan Amount

Floating

For IBA approved courses

Upto INR 50 Lacs

PLR- 3.75= 10.50%

Present PLR – 14.25% p.a.

For IBA non- approved courses

Upto INR 50 Lacs

PLR- 2.00= 12.25% p.a.

Q. What is interest subsidy on education loan?

Answer: Saraswat Bank offers

  • CSIS for students belonging to economically weaker section of the society to promote education amongst them.
  • Padho Pardesh Scheme for minority sector students who wish to pursue their 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: 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 Saraswat 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 Saraswat Bank?

Answer: Borrowers can invest in Saraswat Bank shares when they avail for 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 22 9999

Customer Care Id: corporatecenter@saraswatbank.com

Local rates apply on every call

Calls are answered only during business hours for corporate bank customers.