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Tamilnad Mercantile Bank Limited – Education Loan

Last Modified : September 11, 2018

The Tamilnad Mercantile Bank Limited offers three types of education loan for students who are willing to pursue professional and technical courses in India and Abroad. The bank offers a maximum loan amount of INR 10 Lacs for Studies in India and INR 20 Lacs for Studies Abroad.

The Bank offers Education Loan for India and Abroad through three different schemes named as Tamilnad Mercantile Bank Limited Education Loan, Short Term Study Loan, and Skill Development loan for higher studies in India and Abroad.

Why Tamilnad Mercantile Bank?

The bank offers hassle-free education loan facility to students and instant loan approval with minimal processing charges which make it demanding in the education loan market. The bank doesn’t ask a student for any security for a loan up to INR 7.50 Lacs. Along with this, the maximum loan amount for studies in India offered by the bank is INR 10 Lacs and INR 20 Lacs for studies overseas.

Are you eligible for Tamilnad Mercantile Bank Limited Education Loan?

To avail education loan facility from the Tamilnad Mercantile Bank Limited, students must fulfill the following criteria set by the bank:

  • Indian National - The student and his/ her parents or guardian should be an Indian National.
  • 10+2 Pass - Student should have passed Class 12 examination.
  • Premier Universities - Should have taken admission to a professional or technical course in a recognized institution in India or Abroad.
  • Joint Borrower - The parents/ guardian of the applicant can become his/ her joint borrower

How can you apply for Tamilnad Mercantile Bank Limited Education Loan?

Students who wish to get the education loan from Tamilnad Mercantile Bank Limited are required to follow the steps mentioned below:

  • Visit the official website of Federal Bank
  • Visit the ‘Education Loan’ section
  • Click on ‘Download the application form’
  • On filling the required information correctly in the application form, submit the same to the nearby branch of the Tamilnad Mercantile Bank Limited to complete the further process of availing the education loan facility

Note: Students can also visit any branch of Tamilnad Mercantile Bank and ask for the application form for education loan and they will help you out in applying for education loan.

Various important aspects of education loan offered by the Tamilnad Mercantile Bank are given below:

1. Tamilnad Mercantile Bank Limited Education Loan

Tamilnad Mercantile Bank Limited offers this loan facility to meritorious students who wish to pursue professional courses or any other undergraduate or postgraduate courses from universities in India or Abroad.

What makes you eligible for Tamilnad Mercantile Bank Limited Education Loan?

  • Indian National
  • Passed HSC examination or graduation
  • Graduate/ Postgraduate and PG Diploma courses
  • Professional, Technical and Career-Oriented courses
  • Secured admission in Premier universities in India and Abroad

Interest rates on Tamilnad Mercantile Bank Limited Education Loan

Loan TypeLoan AmountInterest Rates
Special Vidya LoanUpto INR 4 LacsPLR – 0.75% = 13.05% pa
Above INR 4 Lacs up to INR 7.5 LacsPLR + 0.75% = 14.75% pa
Above INR 7.50 Lacs up to INR 20 Lacs (With 100% Collateral Only)PLR – 0.25% = 13.75% pa

Quick Facts about Tamilnad Mercantile Bank Limited Education Loan

MarginFor Loan of Up to INR 4 Lacs – No Margin
For Loan above INR 4 Lacs –
  • India : 5%
  • Studies Abroad : 15%
Note: For a loan up to INR 7.50 Lacs, there is no margin (if loan is under the credit guarantor scheme)
Maximum Loan LimitFor India - INR 10 Lacs
For Abroad - INR 20 Lacs
SecurityUp to INR 7.50 Lacs - No Security (parents should be joint borrowers)
Above INR 7.50 Lacs - Co-Obligation of parents along with 100% tangible collateral security and student’s future income assignment for payment of installments.
Moratorium PeriodCourse Period along with 1 year or 6 months after getting the job (whichever is earlier)
Repayment (Maximum)Upto 15 years after commencement of repayment
Prepayment ChargesNo prepayment charges will be charged by the bank

Additional Facts about Tamilnad Mercantile Bank Limited Education Loan

  • Zero margin for loan of up to INR 4 Lacs
  • Processing fee is Nil (in India)
  • 1% of the total sanctioned amount will be charged as the processing fee for studies in Abroad
  • No documentation charges
  • The bank will charge an interest of 2% p.a. over and above the rate of interest from time to time on the outstanding amount in case of any irregularity in repayment

Expenses Covered Under Tamilnad Mercantile Bank Limited Education Loan

  • Tuition Fee
  • Examination/ Library/ Laboratory Fee
  • passage money for Studies Abroad
  • Hostel Fee
  • Cost of books, uniform and necessary equipments
  • Miscellaneous expenses including educational tours, project work, thesis etc.

Courses Covered under Tamilnad Mercantile Bank Limited Education Loan

Tamilnad Mercantile Bank Limited offers education loan for various professional courses in various Indian and Foreign Universities. The details of courses covered by the bank are mentioned below:

For India

  • Graduate/ postgraduate/ postgraduate diploma courses from recognized institutes/ universities
  • Courses offered by institutions recognized by UGC, Government, AICTE, AIBMS or ICMR etc.
  • Courses like ICWA, CA, CFA etc.
  • Courses conducted by popular institutes such as IIMs, IITs, IISc, XLRI, NIFT etc.
  • Regular Degree/ Diploma courses including Aeronautical, pilot training, shipping etc. which need to be approved by the Director General of Civil Aviation/ Shipping (in case the course is pursued in India)
  • Any other approved course offered by the reputed foreign universities in India
  • Hotel Management course
  • Courses offered by National institutes and other popular private colleges/ universities.

For Abroad

  • Job oriented Professional and Technical Courses
  • Post graduation programs including MCA, MBA, MS etc.
  • Courses which are conducted by CIMA, London and CPA in USA etc.
  • Courses that provides a Degree or Diploma such as Pilot Training, shipping, aeronautical etc. which are recognized by any of the competent regulatory bodies in India

Documents required for Tamilnad Mercantile Bank Limited Education Loan

To complete the education loan process, candidates are required to submit the below mentioned documents to the nearest branch of the Tamilnad Mercantile Bank Limited:

  • Identity Proof – Passport/ Voter ID Card/ Driving License/ PAN Card
  • Address Proof – Ration Card/ Electricity Bill/ Telephone Bill/ Lease agreement/ Passport
  • Admission letter of the respective institute
  • Copies of qualifying courses and mark sheet
  • Proof of fee structure

2. Short Term Study Loan

Tamilnad Mercantile Bank Limited offers this loan to students who are unable to pay the fee of the institutions. Keeping in mind the benefit of students, the bank has kept the interest rate below the normal prime lending rate.

What makes you eligible for Tamilnad Mercantile Bank Limited Short Term Study Loan?

  • Indian National
  • Graduate/ Postgraduate degree and PG Diploma courses
  • Students must have secured admission to school education/ undergraduate course/ postgraduate courses and Diploma courses
  • Passed HSC examination or graduation

Present Rate of Interest

For all studentsBase Rate + 3.75% = 13.50% p.a.

Quick Facts about Tamilnad Mercantile Bank Limited Short Term Study Loan

Maximum Loan LimitMaximum of INR 25,000 or 3 months gross salary of the parent whichever is lower.
Moratorium PeriodCourse Period + 1 year/ 6 months after getting the job (whichever is earlier)
Repayment (Maximum)Maximum 10 to 12 monthly installments with interest (without holiday period)

Additional Facts about Tamilnad Mercantile Bank Limited Short Term Study Loan Scheme

  • Loan is sanctioned to the applicants and their guardians in which the guardians will be joint borrowers
  • 1% of the total sanctioned amount will be charged as the processing fee
  • Documentation charges are Nil
  • The bank will charge an interest of 2% p.a. over and above the rate of interest from time to time on the outstanding amount in case of any irregularity in repayment
  • Loan will be disbursed in stage as per the requirement

Expenses Covered Under Tamilnad Mercantile Bank Limited Short Term Study Loan Scheme

  • Fee Payable to the College/ School
  • Hostel Fee and Examination fee
  • Library and Laboratory fee
  • Expenditure on books, equipment and uniforms
  • Caution deposit/ Building fund/ Refundable deposit etc.

Courses Covered Under Tamilnad Mercantile Bank Limited Short Term Study Loan Scheme

  • Graduation courses such as Arts, Science and Diploma courses
  • School Education
  • Courses offered by institutions recognized by UGC, Government, AICTE etc.
  • Evening courses of approved institution

Documents required for Tamilnad Mercantile Bank Limited Short Term Study Loan Scheme

  • Admission letter
  • Applicant’s Date of birth and residence proof which need to be duly attested
  • Proof of income from the employer for the take home salary
  • Passport sized photographs of applicant, co-applicant (if any) and the guarantor (self attested)
  • Undertaking from the employer to deduct and remit the installment from the salary of the individual

3. Skill Development Loan

Tamilnad Mercantile Bank offers Skill Development Loan to students who wish to upgrade their skills and get additional Degree/ Diploma/ Certificates as per the National Qualification Skill framework.

What makes you eligible for Tamilnad Mercantile Bank Limited Skill Development Loan?

  • Indian National
  • Secure admission in any course offered by the it is, Polytechnics or in a school recognized by Central and State education boards
  • Must fulfill KYC norms

Present Rate of Interest

For all students9.75% p.a.

Quick Facts about Tamilnad Mercantile Bank Limited Skill Development Loan

Margin10% of the total course amount
Maximum Loan LimitMinimum INR 5,000 and Maximum INR 1,50,000
SecurityNo Collateral Security and third party guarantee. However, the bank will charge a guarantee fee of 0.50% of the total outstanding amount from the customer.
Moratorium PeriodCourse Period + 6 months up to 1 year and 12 months for course duration above one year
Repayment (Maximum)For Loans up to INR 50,000 – Up to 3 years For loans between INR 50,000 and INR 1,00,000 – Up to 5 years For loans above INR 1,00,000 – Up to 7 years
Prepayment ChargesNo prepayment charges

Additional Facts about Tamilnad Mercantile Bank Limited Skill Development Loan Scheme

  • Zero processing charges
  • Minimal documentation

Expenses Covered Under Tamilnad Mercantile Bank Limited Skill Development Loan Scheme

  • Tuition/ Course fee
  • Hostel Fee and Examination fee
  • Library, Assessment and Laboratory fee
  • Expenditure on books, equipment and uniforms
  • Caution deposit/ Building fund/ Refundable deposit etc.

Courses Covered Under Tamilnad Mercantile Bank Limited Skill Development Loan Scheme

  • Skill development courses
  • School Education
  • Certificate/ Degree and Diploma courses
  • Courses offered by institutions recognized by UGC, Government, AICTE etc.

Documents required for Tamilnad Mercantile Bank Limited Short Term Study Loan Scheme

  • Admission letter
  • Copies of date of birth proof and residence proof properly attested from a Gazetted Officer
  • Passport sized photograph of applicant, co-applicant (if any) and guarantor which need to be self attested

Interest Subsidy

Interest Subsidy Scheme administered by the Ministry of Tourism

In addition to the education loans mentioned above, Tamilnad Mercantile Bank Limited also offers Interest subsidy scheme which is offered by the Ministry of Tourism. This subsidy scheme is applicable only to those students who are seeking admission to hotel management institutes such as Central IHMs, State IHMs, Indian Institute of Tourism and Travel Management (IITTM) and Food Craft Institutes (FCIs). Students who fulfill the following criteria will be eligible for the Interest Subsidy provided by the Tamilnad Mercantile Bank Limited:

  • This subsidy scheme is given only to those students who are enrolled in any of the hotel management institutes recognized by the Govt. of India
  • Students who left the program mid way will not get any subsidy in the education loan

FAQs

Q: What schemes does Tamilnad Mercantile Bank considers for its education loans?

Answer: There is one scheme offered by Tamilnad Mercantile Bank apart from the basic education loan.

It is CSIS Scheme. The central government interest subsidy scheme is for economically weaker sections.

Q: In whose name is the loan granted?

Answer: The loan is granted in the name of the student

Q: What is the age limit for availing loan in Tamilnad Mercantile Bank?

Answer: There is no restriction on age. Student must clear the other eligibility criteria’s stated by the bank

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: Where can I avail Tamilnad Mercantile 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 Tamilnad Mercantile 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 Tamilnad Mercantile bank?

Answer:

  • 0.50% concession is given to girl students
  • 1% concession if interest is serviced during moratorium period

Q: What all is included in tangible collateral security?

Answer: Mostly Tamilnad Mercantile bank asks tangible security in lieu of the loan amount sanctioned along with assignment of future salaries in favour of Tamilnad Mercantile 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 Tamilnad Mercantile Bank is 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 Tamilnad Mercantile 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 Tamilnad Mercantile 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 Tamilnad Mercantile 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: Tamilnad Mercantile 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 Tamilnad Mercantile Bank does not carry any processing fee or any other charges

Q: What are the charges for late payment of EMI?

Answer: Tamilnad Mercantile Bank charges INR 500 + taxes per cheque bounce and a penal interest @24% per annum, that is, @2% per month.

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 Tamilnad Mercantile Bank education Loan (both for India and Abroad)?

Answer: Yes diploma or certificate courses are eligible under Tamilnad Mercantile 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 Tamilnad Mercantile 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 15 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 Tamilnad Mercantile 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. You can contact your nearest branch for the same.

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:

Tamilnad Mercantile Bank Education Loan

Loan TypeLoan AmountInterest Rates
Special Vidya LoanUpto INR 4 LacsPLR – 0.75% = 13.05% pa
Above INR 4 Lacs up to INR 7.5 LacsPLR + 0.75% = 14.75% pa
Above INR 7.50 Lacs up to INR 20 Lacs (With 100% Collateral Only)PLR – 0.25% = 13.75% pa

Short Term Loan Scheme

For all studentsBase Rate + 3.75% = 13.50% p.a.

Skill Loan Development

For all student9.75% p.a.

Q: What is interest subsidy on education loan?

Answer: Tamilnad Mercantile Bank offers CSIS Interest Subsidy Scheme initiated by government of India. The scheme is for Economically Weaker Sections (EWS) of the society, 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: 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 Tamilnad Mercantile 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 Tamilnad Mercantile Bank?

Answer: There are no such additional benefits on availing loan from Tamilnad Mercantile 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: +91 9842 461 461