IDBI Education Loan for Non-Vocational Courses (Higher Studies in India and Abroad)
This IDBI study loan helps students finance their education and realise their dreams of pursuing higher education at recognised education institutions in India or abroad. Let’s look at its different features:
Features of IDBI Education Loan for Non-Vocational Courses
Why this Loan?
- The loan is meant to help students who have secured admission into a higher education course in a recognised institution in India or abroad through Entrance Test or Merit-based Selection Process
- This IDBI Education 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 expenses directly related to the course including for fees, purchase of books, laptops, hostel fees, lab fees, examination fees, etc.
- The maximum loan amount you can get is Rs. 20 lakh for studying in India and Rs. 30 lakh for studying abroad
- The quantum of loan may be lowered by the bank depending on the course. For instance, the loan amount is capped at Rs. 20 lakh for Executive Programmes in India and abroad
- Loans up to Rs. 7.5 Lakh: As of November 2020, the interest rate for this quantum of loan is 8.65%
- Loans Above Rs. 7.5 Lakh: As of November 2020, the interest rate for this quantum of loan is 9.15%
- The bank charges a penal interest of 2% on overdue amount if the loan amount is over Rs. 4 lakh
- The repayment period for this loan is 15 years. The first instalment becomes due after the end of moratorium period
- The moratorium period for this loan is course duration + 12 months
- The bank only accepts Standing Instructions (SI) as a mode of loan repayment
- Prepayment is accepted by the bank subject to a minimum of Rs. 25,000
- No prepayment or foreclosure charges are levied by the bank
- Loans up to Rs. 4 Lakh: No security required, however, parents must be co-borrowers
- Loans from Rs. 4 Lakh to Rs. 7.5 Lakh: Parents must be co-borrowers with the student. A third-party guarantee is also required
- Loans Above Rs. 7.5 Lakh: Parents must be the joint-borrowers of the loan. Tangible collateral as well as future assignment of the student income is also required to avail the loan. Land or immovable assets must have a value of at least 1.33x the value of the loan while movable property like shares, debentures, etc. must be at least 1.1 times the value
- The applicant must be an Indian national
- The student should have gained admission into a recognised higher education course in a recognised institution in India or abroad through Entrance Test or Merit-based Selection process
- If the student has secured admission under Management Quota then she must have secured marks above the cut-off level required for regular merit-based admission in the institution
- If the student is a minor, parents can execute the loan. Once the student turns 18, a ratification letter is obtained by the bank from the student
- The co-borrower must be in the age group of 21 – 70 years
- Graduate or Postgraduate (PG) degree or PG diploma courses from colleges and universities approved by the government, UGC, AICTE, AIBMS, ICMR, etc.
- Job-oriented technical or professional courses from reputed universities in India or abroad
- Technical diploma courses of usually 3 years offered by approved polytechnic institutions after Class 10
- Degree and Diploma courses in aviation and shipping approved by the Director General of Civil Aviation or Director General of Shipping
- Courses in India from foreign universities
- MCA, MBA, MS, etc. or other approved postgraduate diploma courses abroad
- Professional courses from CIMA-London, CPA in the USA, etc.
Borrower Contribution to Total Cost (Margin Money)
- Loan up to Rs. 4 Lakh: Students do not have to pay any margin money
- Loans above Rs. 4 Lakh: Students studying in India have to pay 5% of total course expenses as margin money while those studying overseas need to pay 15% of total course expenses as margin money
Note: Margin money refers to the amount the borrower contributes to the overall amount required. Suppose a course costs Rs. 20 lakh in which case the borrower will have to offer Rs. 1 lakh (5% of Rs. 20 lakh) for domestic studies and Rs. 3 lakh (15% of Rs. 20 lakh) for foreign studies while IDBI Bank offers the rest.
Processing and Other Charges
- The borrower is required to pay mortgages charges, documentation charges and stamp duty wherever applicable
- For change of institution and enhancement in loan, the borrower is required to pay Rs. 500 + taxes
Uses of the Loan
- College, school and hostel fees
- Examination, library and laboratory fees
- Caution deposit, building fund or refundable deposit supported by institution bills or receipts
- Cost of books, equipment, instruments, uniforms
- Purchase of computer, if required for the course
- Travel expenses including passage money for foreign studies
- Insurance premium for the borrower student, if applicable
- Other expenses needed for completing the course such as study tours, project work, thesis, etc.
Other Features to Know
- The bank may ask for the student’s progress report to be submitted with the bank at regular intervals
- The loan is disbursed directly to the school, book seller or publisher, computer seller, and so on and not to the applicant(s)
- The applicant must pay applicable margin money upfront for each disbursement
- If there is a hike in course fees during the tenure of the loan, the enhanced amount may be considered as additional loan amount for the same course subject to overall loan eligible limit
- Top-up loan may also be offered to eligible students for pursuing further studies within the overall eligibility limit, if such further studies are commenced during the moratorium period of the first IDBI education loan. The repayment of the loan will commence after the completion of the second course and further moratorium period. The maximum exposure is currently restricted to Rs. 30 lakh
- Application Form duly filled and signed by applicant and/or guarantor along with details of applicant and/or guarantor and family
- A declaration/ affidavit from the borrower confirming that, no educational loans have been availed from other banks
- 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 as proof of admission
- Fee Details with Demand of Fee by the Institution
- All Proofs of Past Academic Record including Mark Sheets and Certificates
- For the co-borrower, documents as age, ID, signature, address and employment, business or income proofs are required. Income proof for salaried includes last 3 months salary slips and salary account statement with salary credits while for pensioners or those with rental income, income tax proofs, bank account statement, rent agreement, etc. will be needed. Self-employed borrowers need to show audited financial statements for the last 2 years. An income certificate will also be needed by civic authorities authorised to provide the same
- For studying abroad, a self-attested copy of the passport is also required along with a self-attested form issued by the institute for visa purposes
- IDBI Bank Website: www.idbibank.in and www.inet.idbibank.co.in (net banking)
- Headquarters: Mumbai, Maharashtra
- Call Centre Toll-Free Number: 1800 209 4324, 1800 22 1070
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