Bank of Baroda Scholar Education Loan

Bank of Baroda (BoB) Education Loans – Baroda Scholar (for Study Abroad)

The Bank of Baroda Scholar Education Loan helps students pursue notified courses such as an MBA, MCA, MS, etc. that improve their chances of landing a job. The maximum loan amount is capped at Rs. 80 lakh for specified institutes and at Rs. 60 lakh for non-specified institutes.

Features of Baroda Scholar Education Loan for Higher Studies Abroad

Why this Loan?

• The loan is meant for you if you have gained admission into a notified course such as a professional or technical graduate or postgraduate course, an MBA, MCA, MS, etc. that improve your chances of landing a job
• The bank disburses the Baroda Scholar Education Loan for Studies Abroad as a series of payments over the required number of terms or years to pay the fees or other approved charges

Bank of Baroda Scholar Education Loan Amount

• The maximum loan amount is capped at Rs. 80 lakh for specified premier institutes and at Rs. 60 lakh for non-premier institutes. The list of specified premier institutes can be downloaded from here
• The bank also offers need-based finance based on the repayment capacity of the parents

Bank of Baroda Scholar Education Loan – Interest

• For the specified list of premier institutes, the interest rate is the sum of Baroda Repo Linked Lending Rate (BRLLR) which is currently 7.00% and an additional 1.25%. This comes to 8.25% for the Baroda Scholar Loan
• For non-premier institutes, the interest rate is the sum of Baroda Repo Linked Lending Rate (BRLLR) which is currently 7.00% and an additional 2%. This comes to 9.00%
• Girl students get a 0.5% concession in the interest rate
• Simple interest is charged monthly during the repayment moratorium period. This simple interest is payable even during any moratorium but no loan principal amount needs to be paid during this time
• The bank charges a penal interest of 2% on the overdue amount if the loan amount is over Rs. 4 lakh

Bank of Baroda Scholar Education Loan – Repayment

• The repayment moratorium is for the course duration and an additional grace period of 1 year but simple interest is charged for this moratorium period
• A loan of up to Rs. 7.5 lakh needs to be repaid in 10 years in equal monthly instalments (EMIs) after the moratorium ends while loans above Rs. 7.5 lakh need to be repaid in 15 years as EMIs

Security Needed

• Loans below Rs. 4 lakh: These loans need co-obligation of parents but do not need any security
• Loans from Rs. 4+ lakh to Rs. 7.5 lakh: The parents would have to execute the document as joint borrowers with the student. In addition, Bank of Baroda will need an assignment of future income and seek a third-party guarantee. This third-party guarantee will not be required if BoB is satisfied with the net worth of the parents or to support deserving students who have gained admission into highly reputed institutes. (It is not clarified what constitutes a ‘highly reputed institute’)
• Loans above Rs. 7.5 lakh: These loans need tangible security for the entire loan amount in addition to an assignment of future income

Eligibility

• The borrower should be an Indian national
• As a student, you should have secured admission in a professional or technical course through Entrance Tests or a Merit-Based selection process

Eligible Courses

• Graduate courses that are of a professional or technical nature and help the student land a job
• MCA, MBA, MS. etc. post-graduation courses
• Study programmes from recognized institutes or bodies such as CIMA-London, CPA USA, etc.
• Degree and Diploma courses in aviation and shipping approved by the local foreign aviation or shipping authority and Director General of Civil Aviation or Director General of Shipping, or any other competent authority
• Premier institutes that offer management, medicine, STEM courses (Science, Technology, Engineering and Mathematics), and other courses such as law, economics, design, fine arts and performing arts
• You can also apply for this loan if you have gained admission abroad in any other course or institute

Borrower Contribution to Total Cost (Margin Money)

• Premier Institute: You do not have to pay any margin money if you get admission in a premier institute
• Non-Premier Institute: No margin money is needed for a loan of Rs. 4 lakh or below, but Bank of Baroda takes a 10% margin for loans above Rs. 4 lakh

Note: Margin money refers to the amount the borrower contributes to the overall amount required. Suppose a course costs Rs. 40 lakh in a non-premier which case the borrower will have to pay 10% of Rs. 40 lakh which is Rs. 4 lakh. The bank will cover the rest

Processing and Other Charges

• Though Bank of Baroda charges 1% of the loan amount (with a maximum cap of Rs. 10,000) as upfront processing charges, this is then refunded when the Bank of Baroda Scholar Education Loan is first disbursed. So, in effect, there are no processing charges for this loan
• Bank of Baroda charges Rs. 8,500 for Advocate and Valuer fees in case a mortgage has to be created as security for the Baroda Scholar loan
• There is no charge for mortgage creation

Bank of Baroda Scholar Education Loan – Uses of the Loan

• The Bank of Baroda Scholar Education Loan amount can be used to pay any fees or other charges that are a part of the standard tuition, hostel or any other institution-approved cost that are necessary to complete the course
• The loan can also be met to cover any travel expenses, study tours and so on
• The loan can be used to pay for any insurance premium if it is opted for by the student
• Any caution or refundable deposit moneys are allowed under the loan provided that the total such amount is less than 10% of the total loan
• The loan can also be used to pay off ex-college lodging in which case the amount is paid directly to the lodging establishment after its credentials have been verified
• However, the loan cannot be used to pay for external coaching or tuition

Other Features to Know

• The loan comes with its own debit card
• The bank asks for details of expenses for the course that the applicant(s) need to obtain from the institution
• During application, the borrowers should provide an affidavit that they have not taken an education loan from another bank for the same child. In case they seek another education loan from a different lender, then they will have to take an NOC from Bank of Baroda for the new loan
• The student’s progress report has to be submitted with the bank at regular intervals
• The lending branch should be near the institute or the place of residence of the borrower
• The loan is disbursed directly to the college, book seller or publisher, computer seller, and so on and not to the applicant(s)

Documents Needed

• Application Form duly filled and signed by applicant and/or guarantor along with details of applicant and/or guarantor and family
• Two Passport Size Photographs of student, applicant and/or guarantor
• Photocopy of PAN Card of the student that needs to be submitted at the time of application or during the course period
• Personal Identification Proofs (Any One): Electoral I-Card, Passport, Driving License, PAN Card or Aadhaar Card
• Residential Address Proof (Any One): Electricity Bill, Landline Telephone Bill, Electoral or Voter ID Card or Passport
• Admission Letter, Course Details and Prospectus
• Fee Details with Demand of Fee by the Institution
• All Proofs of Past Academic Record including Mark Sheets and Certificates
• Copy of Passport since loan is for overseas study
• An Income Certificate and/or a Minority Certificate from a Competent Authority to avail the interest subsidy under Padho Pardesh Scheme for Interest Subsidy on Educational Loan for Overseas Studies for Minority Communities, if eligible
• An Income Certificate and/or a Minority Certificate from a Competent Authority to avail the interest subsidy under Dr. Ambedkar Central Sector Scheme of Interest Subsidy on Educational Loan for Overseas Studies for OBCs & EBCs, if eligible
• Property or other security documents wherever applicable
• Cheque for processing charges that is refunded on first disbursal of loan

Reference Facts

• Bank of Baroda Website: www.bankofbaroda.com and www.bobibanking.com (net banking)
• Headquarters: Baroda (Vadodara), Gujarat
• Education Loan Number: 846 700 1122 (to give a missed call)
• Call Centre Toll-Free Number: 1800 223 344, 1800 102 4455