Bank of Maharashtra Education Loan Scheme for students

Bank of Maharashtra Education Loan Scheme (Higher Study in India and Abroad)

This loan is meant for students who want to pursue graduate, postgraduate and professional studies from recognised institutes in India or abroad. The maximum loan amount is capped at Rs. 10 lakh for studying in India and at Rs. 20 lakh for studying abroad.

Features of Bank of Maharashtra Education Loan Scheme

Why this Loan?

  • The loan is meant for you if you have gained admission into a Bachelors, Masters, Doctorate (PhD) or a job-oriented programme in a reputed college/university in India or overseas
  • The Bank of Maharashtra Education Loan for Higher Studies in India and Abroad is disbursed to the institution as required to pay the fees or other approved charges and expenses
  • The loan is disbursed in stages over the loan period and not as a lump sum, as and when required, directly to the institute
  • You can apply for this loan if you do not have any other outstanding loan from other institutions

Loan Amount

  • The maximum loan amount is capped at Rs. 10 lakh for higher education in India and at Rs. 20 lakh for overseas. The bank may offer a higher loan amount on a case-to-case basis

Interest

  • The interest rate for a loan amount of up to Rs. 7.5 lakh is the sum of 1-year Marginal Cost of Funds-based Lending Rate (MCLR) which is currently 7.30% and an additional 2.00%. For loan amount more than Rs. 7.50 lacs, it is MCLR + 1.50%. This comes to 9.30% for loans less than Rs. 7.50 lakh and 8.80% for loans of above Rs. 7.50 lakh
  • Girl students can get a 0.5% concession in the interest rate
  • Mahasaraswati account holders get a 0.25% concession for 3 years
  • Existing home loan borrowers get a 0.5% concession in the interest rate
  • All students getting admission in the top premier institutions can get a 0.5% concession in the interest rate. The list of premier institutions as defined by the bank is not available on the bank’s website as of October 2020
  • All special concessions are capped at 0.5%
  • Simple interest is charged monthly during the moratorium period. Thereafter, the interest is compounded monthly
  • A 1% concession may be provided to the borrower if the interest is repaid regularly during the study and moratorium period. No concession is applicable after the repayment period starts

Repayment

  • Loans up to Rs. 7.5 lakh: The total repayment period is 10 years after the date of commencement of repayment. The moratorium period is the duration of the course
  • Loans above Rs 7.5 lakh: The total repayment period is 15 years after the date of commencement of repayment. The repayment period starts 1 year after the date of completion of the course
  • The loan needs to be repaid in equal monthly instalments (EMIs) after the moratorium ends in both cases

Security Needed

  • Loans up to Rs. 4 lakh: These loans need parents to be co-borrowers but do not need any security
  • Loans above Rs. 4 lakh up to Rs. 7.5 lakh: Bank of Maharashtra will need a third party guarantee as security for this loan amount. No collaterals are required
  • Loans above Rs. 7.5 lakh: The borrower must present a collateral equivalent to the loan amount and pay the margin money also (details below)

Eligibility

  • The borrower should be a Resident Indian (an Indian citizen who has stayed in the country for over 180 days in the last financial year falls under this category)
  • The student must have secured admission based on an Entrance Test or Merit-Based selection
  • The student must have a good academic record

Eligible Courses in India and Abroad

  • For Studying in India: Graduation and other diploma or degree courses conducted by colleges and universities approved by UGC, AICTE, AIBMS, ICMR, government, etc.
  • For Studying Abroad: Job-oriented professional, technical, graduate or post-graduate courses from reputed universities

Borrower Contribution to Total Cost (Margin Money)

  • Loans of up to Rs. 4 lakh: No margin money is needed
  • Loans above Rs. 4 lakh: Loans above Rs. 4 lakh need a margin money contribution of 5% for study in India and 15% for study abroad

Note: Margin money refers to the amount the borrower contributes to the overall amount required. Suppose a foreign course costs Rs. 40 lakh in which case the borrower will have to pay 15% of Rs. 40 lakh which is Rs. 6 lakh. The bank will cover the rest.

Processing and Other Charges

  • The applicant may not have to bear applicable processing charges for this Bank of Maharashtra Education loan. This based on the fact that the same is not mentioned for this loan on the bank’s website but while the processing charges for other loan schemes have been specifically mentioned

Uses of the Loan

  • Bank of Maharashtra pays amount due for fees, books, laptops, etc. directly to the institute, bookseller, computer seller, etc.
  • The loan does not cover any external tuition or coaching fees
  • The loan can be used to pay for the insurance premium of optional term insurance cover offered to education loan borrowers

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
  • Proof of Parental Income (Salaried Class): ITR of last 2 years, Form 16, Salary Slips of last 3 months and Bank Statement of last 6 months
  • Proof of Parental Income (Non-salaried Class): ITR of last 2 years, Audited Balance Sheet and Bank Statement of last 12 months
  • Admission Letter, Course Details and Prospectus
  • Fee Structure of the Institution
  • Any receipt of payments already made
  • All Proofs of Past Academic Record including Mark Sheets and Certificates
  • Certificate of recognition or approval of institute by a competent authority
  • 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 Maharashtra Website: www.bankofmaharashtra.in and www.mahaconnect.in (net banking)
  • Headquarters: Pune, Maharashtra
  • Call Centre Toll-Free Number: 1800 233 4526