Bank of Baroda Gyan Education Loan

Bank of Baroda (BoB) Education Loans – Baroda Gyan (Higher Study in India)

This loan is meant for students pursuing graduate, postgraduate and professional studies from recognised institutes in the country. The maximum loan amount is capped at Rs. 80 lakh for medical and aviation courses and at Rs. 60 lakh for all others.

Features of Baroda Gyan Education Loan for Higher Studies in India

Why this Loan?

• The loan is meant for you if you have gained admission into a Bachelors, Masters, Doctorate (PhD) or a professional studies programme in the country
• The loan can also be taken if you have enrolled for a course offered by foreign universities in India
• You can also take this loan if you a student in an evening college
• The Baroda Gyan Education Loan for Higher Studies in India is disbursed to the institution as required to pay the fees or other approved charges
• The loan is disbursed as a series of payments over the required number of years and not as a lump sum

Loan Amount

• The maximum loan amount is capped at Rs. 80 lakh for medical and aviation courses and at Rs. 60 lakh for all others

Interest

• The interest rate is a sum of Baroda Repo Linked Lending Rate (BRLLR) which is currently 7.00% and an additional 2% that includes Strategic Premium. This comes to 9.00% for the Baroda Gyan Loan
• 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 overdue amount if the loan amount is over Rs. 4 lakh

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 up to 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 borrowers should be Resident Indians (Indian citizens who have stayed in the country for over 180 days in the last financial year)
• As a student, you should have secured admission in a recognised institution for approved courses through Entrance Tests or Merit-Based selection process after completion of Class 12, HSC or any equivalent level
• If the selection happens on reasons other than entrance tests or merit, then Bank of Baroda will check certain criteria such as employability and reputation of the institution
• If a student qualifies for a seat under merit quota, he or she will be eligible for this loan even if he or she chooses to pursue a course under management quota

Eligible Courses

• Degree and Diploma courses from colleges and universities approved by the government, UGC, AICTE, AIBMS, ICMR, etc.
• Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Architecture, Computer, etc. courses
• Hotel or Hospitality Management, Event Management, Mass Communication, etc. courses
• Degree and Diploma courses in aviation and shipping approved by the Director General of Civil Aviation or Director General of Shipping
• Courses from IIM, IIT, IISc, XLRI, NIFT, NID, etc.
• Study programmes that lead to CWA, CA, CS, CFA, etc. accreditations
• Computer certificate courses from accredited institutes
• B.Ed. or Teachers and nursing courses offered by approved institutions and which lead to a degree or diploma and not a certificate

Borrower Contribution to Total Cost (Margin Money)

• Loans of Rs. 4 lakh or Less: No margin money is needed for a loan of Rs. 4 lakh or below
• Loans above Rs. 4 lakh: Loans above Rs. 4 lakh need a margin money contribution of 5%

Note: Margin money refers to the amount the borrower contributes to the overall amount required. Suppose a course costs Rs. 40 lakh in which case the borrower will have to pay 5% of Rs. 40 lakh which is Rs. 2 lakh. The bank will cover the rest

Processing and Other Charges

• There are no processing charges like the Baroda Vidya Education Loan for school children
• However, unlike the Vidya loan, the Baroda Gyan loan charges Rs. 8,500 for Advocate and Valuer fees in case a mortgage has to be created as security
• There is no charge for mortgage creation

Uses of the Loan

• Bank of Baroda pays amounts due for books, laptops, etc. paid directly to the seller. However, the loan cannot be used to pay off external coaching or tuition fees
• 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
• The loan can be used to pay for any insurance premium if it is opted for by the student. The bank website says it has tie-ups with India First Life Insurance and Kotak Life Insurance for Group Credit Life insurance cover for education loan borrowers
• The loan does not cover any external tuition or coaching fees

Other Features to Know

• The loan comes with its own debit card
• 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
• An Income Certificate from a Competent Authority to avail the interest subsidy under Central Interest Subsidy Scheme of Education Loans, if eligible
• Property or other security documents wherever applicable

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