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Karur Vysya Bank Education Loan

Last Modified : September 01, 2018

Karur Vysya Bank extends single variant of education loan for studies in India and Abroad. The loan is extended with maximum benefits and for amounts upto INR 20 Lacs (for studying abroad).

The bank extends Education Loan for India and Abroad to students who have secured admission to professional/ technical courses either in India or overseas.  

Why Karur Vysya Bank?

Karur Vysya Bank offers several benefits to students. The interest rate offered by bank ranges within 2.1% to 3.1%, in addition to the MCLR. Further, there is no margin requirement for loans up to 4 lacs. Also, the bank does not charge any processing fee for its loans too.

Are you eligible for education loan from Karur Vysya Bank?

The bank has not specifically provided for any eligibility criterion. However, under the features of the loan, the following points are necessary to be fulfilled, to get the loan: -

  • The candidate must be an Indian National.
  • The candidate must have secured admission in a Management/Technical course through an entrance test or respective selection.
  • For the loan to study abroad, the candidate must have secured admission in a foreign university or institution.
  • The candidate will need to bring his/her father/guardian as guarantor, in case of Individual loans only.

How can you apply for Karur Vysya Bank Education Loan?

Candidates can choose both online and offline modes to apply for the loan. Mentioned below are the steps to use both the methods: -

Online – Through Vidyalakshmi Portal

Candidates can apply for an educational loan from Karur Vysya Bank using the Vidyalakshmi Portal. Here are the steps to use it: -

  • Candidates will first need to reach the portal, the web address for which is www.vidyalakshmi.co.in/students
  • After reaching there, candidates will need to click on ‘Click to Apply Now.’
  • After this, candidates will first need to fill in their basic details to register on the platform. This will be followed by a verification of email address of the candidate.
  • Further, a detailed form will appear. Candidates have to enter their personal details, academic details, bank account details and have to upload some documents to complete the form.
  • With all the details being filled in, the form is complete.

Offline Method – By Visiting the Branch

The traditional method of getting an education loan from Karur Vysya Bank involves visiting the nearest bank branch and enquiring there. Candidates may get the guidelines from the bank branch and may produce the necessary documents to get the loan.

Karur Vysya Bank Education Loan

The eligibility criterion for getting an education loan from Karur Vysya Bank has already been listed above. In addition to this, candidates must be looking to know other important features like interest rates and collateral rules for the education loan. All such features, along with other important ones, are listed below: -

Interest Rates for Karur Vysya Bank Education Loan

As per the RBI guidelines, Karur Vysya Bank uses the MCLR method for calculating the interest rate on loans. The details of this are given in the table below: -

Loan AmountInterest Rates for Boys/Male StudentsInterest Rates for Girls/Female Students
For education loan up to INR 7.5 lacsOne-year MCLR + 3.10%One-year MCLR + 2.60%
For education loans ranging from INR 7.5 to INR 10 lacsOne-year MCLR + 2.85%One-year MCLR + 2.35%
For education loans with value of above INR 10 lacsOne-year MCLR + 2.60%One-year MCLR + 2.10%

Quick Facts about Karur Vysya Bank Education Loan

MarginFor loan up to INR 4 lacs - Nil
For loan above INR 4 lacs: -
For studying in India – 5%
For studying Abroad – 15%
Repayment Period5-7 years maximum
Moratorium PeriodIn addition to the Course Period, 1 year or 6 months after getting the job are, whichever is earlier, is considered
Primary SecurityDemand Promissory Note (If the loan is used for purchasing any equipment/instrument, the same is to be hypothecated towards the bank)
Collateral SecurityFor loans upto INR 4 lacs:
Parents and have to join in as Co-Applicants and No security is needed.
For loans between INR 4 lacs to INR 7.5 lacs:
Parents have to join in as co-applicants, and a suitable third party guarantee needs to be given.
For loans above INR 7.5 lacs:
Parents have to join in as co-applicants, a suitable tangible security is to be given along with assignment of future income of the student.
GuaranteeFather or Guardian have to give the guarantee in case of individual applicant
Processing ChargesNil, Although INR 110 are needed to be paid as Vidyalakshmi Portal Handling Charges

Courses covered under Karur Vysya Bank Education Loan

For India

  • Graduate/ postgraduate degree/ diploma courses conducted by renowned institutions/ universities recognized by UGC, Government, AICTE, AIBMS or ICMR.
  • Academic courses such as CA, CFA, and ICWAI.
  • Courses conducted by NIFT, IITs, IIMs, XLRI, IISc, and NID.
  • Regular degree or diploma courses like, shipping, pilot training, and aeronautical that are approved by Director General of Civil Aviation or Shipping (only if it is pursued in India).
  • Courses for noble cause such as teaching training (like B.Ed.), nursing courses, and from other training institutions approved by Central Government or by State Government
  • Reputed foreign universities offering approved courses offered in India.

For Abroad

  • 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 Karur Vysya Bank Education Loan

A similar thing goes with expenses of education too, as with courses covered. The bank has not mentioned any specific expenses which will be covered under the loan.

In general, the candidates can expect the following expenses to be covered under the loan: -

  • Basic Tuition Fees
  • Cost of Books/Uniform
  • Library/Laboratory Fee
  • Residence/Hostel Fee
  • Travel Expenses (for studying abroad)
  • Cost of Laptop/Computer (At reasonable rates and as per the demand of the course)

Documents Required for Karur Vysya Bank Education Loan

There is no mention of essential documents required for Education Loan from Karur Vysya Bank. However, as a rule of thumb, the following documents are deemed to be the most important ones while applying for an education loan: -

  • A valid identity proof: Passport / Aadhaar Card / Voter ID / PAN Card
  • Proof of Income of the candidate (if any): Latest Salary Slip, Form 16 and Latest Salary Certificate
  • Income Tax Return of Parent/Guardian (if applicable)
  • Bank Statement of past 3 or 6 months
  • Proof of Residence
  • Guarantor Form
  • Proof of Admission and Educational Proofs: Admission/Offer Letter, Class 10th Certificate, Class 12th Certificate and Degree Certificate (if any), along with marks sheets.

Benefits of Education Loan from Karur Vysya bank

Karur Vysya Bank is an excellent avenue for getting an educational loan, as it offers several benefits. These benefits are listed below: -

  • Faster processing of loan
  • Special discounted rates to girl/female students
  • No processing fee
  • Availability on Vidyalakshmi Portal

FAQs about Karur Vysya Bank Education Loan

Q. What are the schemes that Karur Vysya Bank considers for Education Loan?

Answer: There is no mention of any further schemes on bank’s website. Candidates may enquire at their nearest branch for such details.

Q. On whose name is the loan granted?

Answer: The loan is granted on the name of student/applicant only.

Q. What is the age limit for the loan?

Answer: There is no age limit as such. If a candidate has got the admission and he/she fulfills other points too, then he/she can avail the loan irrespective of the age.

Q. What is the meaning of ‘margin’ on loan?

Answer: Margin is that portion of the loan which is not given by the bank, and thus candidate has to arrange such money by his/her own resources only. For example, if loan amount is INR 1 lac and margin is 4%, then bank will give the candidate INR 96000 only.

Q. Where can I avail Karur Vysya Bank Education Loan?

Answer: Candidates can either apply through the Vidyalakshmi Portal or can contact their nearest branch to avail the loan.

Q. Is there any method to apply online for the loan?

Answer: Yes. As mentioned earlier, students can use the Vidyalakshmi Portal for this.

Q.Is there any minimum aggregate marks criteria to get the Karur Vysya Bank Education Loan?

Answer: Nothing such is mentioned on the website. Candidates are advised to enquire about the same at bank’s branch.

Q. Is there any discount/rebate offered on Karur Vysya Bank Education Loan?

Answer: Yes. Female students do get a rebate of 0.50% on interest rate, as compared to male students.

Q. What all can I provide as tangible security?

Answer: Karur Vysya Bank does require the candidate to submit a tangible security equivalent to the amount of loan, in certain cases. Candidates can submit land records/ shares / debentures / public sector bonds / units of UTI, NSC / Life Insurance Policy / bank deposits as a tangible security.

Q. What is Moratorium Period?

Answer: Moratorium Period is the time in which the student does not need to start paying the installments of loan. This includes the course period, plus a further period of either 1 year or of 6 months after getting the job, whichever is earlier.

Q. What is tenure of education loan?

Answer: Candidates can take the loan for a maximum period of 7 years.

Q. What is the meaning of MCLR?

Answer: MCLR (Marginal Cost of Funds based Lending Rate) is a new method devised by RBI of determining the interest rate on loans. It is the minimum rate which a bank needs to charge on any loan.

Q. What all expenses are covered under Karur Vysya Bank Education Loan?

Answer:

  • Basic Tuition Fees
  • Cost of Books/Uniform
  • Library/Laboratory Fee
  • Residence/Hostel Fee
  • Travel Expenses (for studying abroad)
  • Cost of Laptop/Computer (At reasonable rates and as per the demand of the course)

Q. Are candidates taking admission through the management quota eligible for the loan?

Answer: Yes, such candidates are eligible.

Q. What is meant by reputed or recognized institutes?

Answer: Recognized institutes are those which fall under the ambit of national level bodies like UGC and AICTE. Reputed institutes include some of the well known institutes of the country, e.g. the IITs and the IIMs.

Q. Is there any special benefit for students getting admission into top colleges of the country?

Answer: Nothing such is mentioned on bank’s website. Candidates may contact the nearest branch to know this.

Q. What is the processing fee for the loan?

Answer: There is no processing fee charged for Karur Vysya Bank Education Loan.

Q. What are the charged for delayed payment of EMI?

Answer: This will be informed during the application/sanction of loan, as no such details are mentioned on the website.

Q. Will the cost of computer be covered under the loan?

Answer: Yes, but only upto a reasonable limit.

Q. Why do I need a PAN Card for loan?

Answer: PAN Card makes it easier for banks to get reliable information about the borrowers. It does not harm the applicant and thus the candidate must not hesitate is providing it.

Q. Are Diploma or Certificate courses also included under Karur Vysya Bank Education Loan?

Answer: Candidates are advised to contact the bank branch for such queries.

Q. Is it necessary to have a co-borrower?

Answer: Since the bank’s rules state it, it is necessary to have one.

Q. Who can be my co-borrower?

Answer: A parent or guardian is the first preference for this. Spouse is also a valid co-borrower. The co-borrower should have a good credit history and a steady source of income.

Q. What all documents are required from the part of co-borrower?

Answer: These include Attested Copies of Age Proof, Residence Proof and Date of Birth. A self-attested passport size photograph. Income Proof and Documents related to Collateral Security.

Q. What are the KYC requirements for the loan?

Answer: KYC guidelines require a proper proof of identification and residence, for both the applicant and the co-borrower.

Q. What is the maximum term for repayment of the loan?

Answer: It is 7 years.

Q. How can I pay the loan?

Answer: Generally the EMI is auto debited from the account of the borrower. Post-Dated cheques can also be used for this purpose.

Q. How is EMI calculated?

Answer:

  • The general formula is EMI = [P x R x (1+R) ^n] / [(1+R)^ n-1]
  • In this equation, P is Amount of Education Loan, R is Rate of Interest, n is Tenure of the Loan.
  • Applicants can use general EMI calculators available on the web to calculate the EMI.

Q. Will the loan amount be handed over to me or the institute directly?

Answer: The amount is directly submitted to the institute.

Q. What if I am not able to complete the course in designated period? Will the loan repayment be extended?

Answer: This query can only be handled by the bank’s officers themselves, as there are no set rules for this.

Q. Is the interest charged on loan Simple or Compound?

Answer: Simple Interest is charged till the beginning of the repayment period. After this, Compound Interest is charged on reducing balance.

Q. What is the interest rate charged on loan?

Answer:

Loan AmountInterest Rates for Boys/Male StudentsInterest Rates for Girls/Female Students
For education loan up to INR 7.5 lacsOne-year MCLR + 3.10%One-year MCLR + 2.60%
For education loans ranging from INR 7.5 to INR 10 lacsOne-year MCLR + 2.85%One-year MCLR + 2.35%
For education loans with value of above INR 10 lacsOne-year MCLR + 2.60%One-year MCLR + 2.10%

Q. What is interest subsidy on education loan?

Answer: It is a scheme of Government of India which offers benefits on interest to Economically Weaker Sections. Since the bank has not mentioned any of the details related to this on the website, candidates may contact the branch of the bank to know about this.

Q. What is employment verification in relation to the loan?

Answer: Banks verify the employment details of the applicant while granting the loam. This forms an important aspect of processing of the application.

Q. Is there any tax benefit on loan?

Answer: Under section 80, candidates can avail benefits up to the extent of interest paid by them on the loan, up to a maximum of INR 1.5 lacs every year.

Q. To get Karur Vysya Bank Education Loan, do I need to have bank account with Karur Vysya Bank too?

Answer: No, it is not necessary.

Q. Can I repay the loan in foreign currency?

Answer: Yes, but some additional charged may be charged on such transaction.

Q. Why banks ask for Insurance Policy as a security?

Answer: This is to safeguard the bank in case of sudden demise of the borrower. The banks use the life insurance policy to recover the money.

Q. What is credit score and is it needed while taking the loan?

Answer: Credit Score is a measure used by banks to check the credibility of the borrower. If it is not available, the banks evaluate details like reputation of the institute, academic record of candidate etc to determine the credibility.

Q. Are NRIs eligible for loan?

Answer: Yes, but only if they have Indian Citizenship and Indian Passport with them.

Q. Is Visa necessary for availing loan for studying abroad?

Answer: Yes, Visa is required as a necessary document, along with several others.

Q. What all procedures are required for applying for an education loan for studying abroad?

Answer: The first step is to get a valid admission letter from the foreign institute. All further details will be provided by the bank. The bank officials are generally very helpful in such matters and probably the candidate will not face any major issue while taking the loan.

Q. Apart from the bank branch, where can I inquire further about the education loan?

Answer: Candidates can use the ‘Live Chat’ feature available on the bank’s website (www.kvb.co.in) to enquire further about any product.

Further, Candidates can use the helpline numbers of the bank. These are 1860-216-1916 (within India) and +91 044 30719161 (outside India). Normal call charges are applicable on these numbers.

For more details, candidates can use the information and links available on the bank’s ‘contact us’ page. It can be reached by clicking on https://www.kvb.co.in/global/contact_us.html .