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Union Bank of India Education Loan

Last Modified : June 29, 2018

Education Loan scheme is launched by Union Bank of India to deserving and needy students who wish to pursue basic higher education after 10+2. Union Bank Education Loan for India and Union Bank Education Loan for Abroad are provided with maximum benefits to the students. 

Education Loans for India and Abroad are extended by banks along with interest subsidy 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

Why Union Bank?

Maximum benefits offered by bank along with the education loan is what makes union bank one of the most preferred banks for education loan. High value loans and attractive rate of interest also plays a major role. The bank charges 12.25% for loan amount upto INR 7.50 Lacs and 12.00% for loan amount above INR 7.50 Lacs.

Are you eligible for Union Bank Education Loan?

  • Indian National. A student must be an Indian citizen or an Indian passport holder.
  • 10+2. You must have qualified 10+2 examination with essential marks.

1. Union Education

Eligibility to avail Union Education

  • Indian National
  • Graduate/ Post Graduate/ Diploma courses
  • Recognized University/ Colleges
  • Entrance exam/ Merit- based admission

Present rate of Interest

Loan Amount

Interest Rate (for Male Students)

Interest Rate (for Female Students)

Upto 7.50 Lacs



Above 7.50 Lacs



Quick Facts about Union Education Loan


Upto INR 4 Lacs: Nil

Above INR 4 lacs: 5%


Maximum Loan Limit

INR 20 Lacs


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

15 years

Prepayment Charges


Additional Facts about Union Education

  • No margin for loan upto INR 4 Lacs
  • No security for loan upto INR 4 Lacs
  • 0.50% concession to girl students
  • No processing fee

Courses covered under Union Education

  • All Graduation, Post- Graduation or Doctorate courses
  • Professional Courses including Medical, Law, Dental, Engineering, 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.
  • Degree or Diploma courses in Teacher Training, Nursing, B.Ed provided the training institutes are approved by Central/ State Government.

Expenses covered under Union Education

  • 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)

Documents required for Union Education

  • 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

Credit Guarantee Fund Scheme for Educational Loans (CGFSEL)

HRD Ministry has launched this scheme to promote education amongst economically weaker sections and provide them with basic education right. The scheme is available for students pursuing the 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 CGFSEL

  • 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
  • Available upto moratorium period (Course Period+1 year)
  • Available only once either for undergraduate/ post graduate/ diploma courses.

Courses Covered under CGFSEL

Undergraduate and Post Graduate courses in:

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

Note: Post Graduate Diploma approved by AICTE/ UGC


Q. What schemes does Union Bank of India considers for its education loans?

Answer: There are multiple other schemes offered by Union Bank of India apart from the basic education loan. These are:

  • CSIS Scheme
  • Padho Pardesh
  • Skill Loan Scheme
  • Credit Guarantee Fund Scheme for Education Loans (CGFSEL)

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 Union Bank of India?

Answer: There is no age restriction as stated by Union Bank of India. Borrowers must fulfil other eligibility criteria mentioned.

Q. Are minors eligible to apply for Union Bank of India 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 Union Bank of India 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 Union Bank of India 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 Union Bank of India 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 Union Bank of India?


  • 0.50% concession is given to girl students
  • 2% concession to students who have secured admission to any top premier institutes listed under List A and B provided by the bank
  • Eligibility criteria and margin on education loan is relaxed for SC/ST students

Q. What all is included in tangible collateral security?

Answer: Mostly Union Bank of India asks tangible security in lieu of the loan amount sanctioned along with assignment of future salaries in favour of Union Bank of India. 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 Union Bank of India 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 Union Bank of India 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: 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: Union Bank of India offers 2% concession to students who secure admission to top premier institutes. Also, there is no margin implied and no collateral security asked while availing education loan from Union Bank of India.

Q. What is the processing fee or prepayment charges?

Answer: The education loan offered by Union Bank of India does not carry any prepayment charges/ processing fee/ documentation 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 Union Bank of India education Loan (both for India and Abroad)?

Answer: Diploma courses are eligible under Union Bank of India 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 Union Bank of India.  

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 Union Bank of India?

Answer: You need at least 2 guarantors to avail loan from Union Bank of India.

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: The maximum term for repayment is 15 years for Union Bank Education Loan

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. 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: Interest rate education loan scheme provided by Union Bank of India are:

The Interest Rate for Union Education Loan is

Loan Amount

Interest Rate (for Male Students)

Interest Rate (for Female Students)

Upto 7.50 Lacs



Above 7.50 Lacs



Q. What is interest subsidy on education loan?

Answer: Union Bank of India offers

  • CSIS- Interest Subsidy scheme for economically weaker sections and to promote education amongst them
  • Padho Pardesh scheme for students who wish to pursue studies abroad
  • Skill Loan Scheme for students who wish to pursue courses to enhance their skills and attain better career opportunities.
  • CGFSEL for Economically Weaker Sections (EWS) of the society and to support them financially for their education needs.
  • ACSISOBCEBC Subsidy scheme is for OBC category and economically backward classes 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. 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 Union Bank of India?

Answer: Union Bank of India provides Group Life Insurance Cover Scheme for education loan borrowers. 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. 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 2244

Local rates apply on every call

Customer Care Id: