Bank of Baroda (BoB) Education Loans – Baroda Vidya (Education from Nursery to XII)
The Baroda Vidya loan helps people educate their children up to Class 12, so they become eligible for undergraduate courses or other higher studies. Let’s look at its different features:
Features of Baroda Vidya Education Loan for Children from Nursery to Class 12
Why this Loan?
- The loan is meant to help schoolchildren complete their school education
- The loan is disbursed as a series of payments over the required number of years and not as a lump sum
- The loan can be taken for all school fees including for purchase of books, laptops, uniforms, hostel fees, etc. However, the bank does not provide its Baroda Vidya Education Loan for external coaching or tuition
- The maximum loan amount you can get is Rs. 4 lakh with the final amount being based on your needs and repayment capacity as the parent
- Bank of Baroda has stated that the loan and interest amounts to be deducted should not exceed 60% of parents’ incomes
- The interest rate is a sum of Baroda Repo Linked Lending Rate (BRLLR) which is currently 7.00%, a Strategic Premium rate of 0.25% and 2.5% for non-BOB employees. This currently comes to 9.75% for the Baroda Vidya Loan
- There is no Strategic Premium for BOB employees and family members. The additional rate for them is also only 0.25%. This means they get an interest rate of 7.25%
- If you have a girl, then the interest rate on the loan you take for her is lower than the standard rate by 9.25%
- One thing to note is that the 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. 2 lakh
- The loan amount for each year is repayable in 12 monthly instalments, with the first instalment becoming due 12 months after the first amount for that year was disbursed by the bank.
- This means if the loan amount for this year was first paid in April of this year (say), you will have to pay the first EMI in April of next year
- This is an unsecured loan (i.e. no security is needed). However, any laptop or equipment bought with the loan has to be hypothecated to the bank
- The loan is given in the name of the father or the mother
- The father or the mother has to be a resident Indian national
- The student should have gained admission into a recognised school
- The loan is disbursed directly to the school or publisher or book / equipment seller and not to the parents
- The disbursement for the next year happens only after the child passes the annual exams of the current year
Borrower Contribution to Total Cost (Margin Money)
- The borrower does not have to offer any margin money to get the loan
Note: Margin money refers to the amount the borrower contributes to the overall amount required. Suppose a house costs Rs. 40 lakh in which case the borrower usually has to provide a margin money percentage of 15-25% of the total house value while the lender bank offers the rest
Processing and Other Charges
- There are no processing or documentation charges probably considering the equitable goal of the loan
Other Features to Know
- Bank of Baroda has divided the student class group into 4, viz., Stage I being Junior School from Nursery up to Class 5, Stage II being Middle School from Class 6 to Class 8 and Stage III being High School from Class 9 to Class 12. The bank has an additional grouping of students attending evening classes
- 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
- Also, the lending branch should be near the institute or the place of residence of the borrower
- The loan is disbursed directly to the school, book seller or publisher, computer seller, and so on and not to the applicant(s)
- Application Form duly filled and signed by applicant and/or guarantor along withdetails 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
- 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
IMPORTANT: Thousands of smart students and their parents lose lakhs of money every year by choosing a costlier education loan.
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