Looking for a Suitable Education Loan from Federal Bank for vocational and Skill Enhancement Courses in India and Abroad?

Look no further. This page summarises the information you will need on Federal Bank’s Career Solutions Education Loan.

Federal Bank Career Solutions Education Loan

This Federal Bank study loan helps students finance their skill-development and vocational courses. The bank offers up to Rs. 75 lakh for studying in India and Rs. 1 crore for studying abroad. Applicants can apply for loans up to 75% of the estimated course expenses. Let’s look at its different features:

Features of Federal Bank Career Solutions Education Loan

Why this Loan?

  • The loan is meant to help students who have secured admission into higher education, skill development or vocational courses such as pilot training, skill upgrade, diploma or degree courses
  • The fields may cover aviation, hospitality and travel management, executive development, and so on
  • This Federal Bank Career Solutions 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.

Loan Amount

  • The bank offers loan amount of up to Rs. 75 lakh for studying in India and Rs. 1 crore for studying abroad
  • Federal Bank covers up to 75% of the course expenses and the borrower has to cover the rest, i.e. 25%

Interest

  • The interest rate for this loan starts from 8.10%. The effective rate of interest on this education loan from Federal Bank has not been mentioned on the bank’s website. Please get in touch with the bank for details
  • The moratorium period for this loan scheme is course period + 6 months after the completion of the course or course period + 3 months after getting a job, whichever is earlier

Repayment

  • The loan amount for each year is repayable in equated monthly instalments up to a period of 10 years after the end of the moratorium period
  • Accrued interest must be paid during moratorium

Security Needed

  • Parents must be joint applicants
  • Tangible collateral security is required to avail this loan. Applicants can choose to pledge a Federal Bank deposit, NSC, Units of UTI, Shares, LIC, Gold Ornaments, Equitable Mortgage of Land, etc.

Eligibility

  • The applicant must be a resident Indian national (Indian citizens who have stayed in the country for over 180 days in the last financial year)
  • The student must have secured admission in a higher studies programme at a recognised educational institute in India or abroad
  • The minimum age of the applicant should be at least 18 years and the maximum not more than 45 years
  • The minimum net worth of all the borrowers should be at least double the loan amount

Eligible Courses

  • Graduate courses that are of a professional or technical nature and help the student land a job
  • MCA, MBA, MS. etc. postgraduation courses
  • 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
  • Job-oriented programmes from recognised foreign colleges and universities. Study programmes from recognized institutes or bodies such as CIMA-London, CPA USA, etc.

Margin Money (Borrower Contribution to the Total Cost)

  • The margin on the loan varies according to the collateral
    • For shares or debentures that are quoted above their face value and for equitable mortgage of land, the bank asks the borrowers to contribute 50% of the loan amount
    • For other security such as pledging of bank deposits or gold ornaments, National Savings Certificates (NSC), UTI units or LIC insurance, Federal Bank asks for a 10% margin

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 has to provide margin money Rs. 10 lakh (25% of the total course) while Federal Bank offers the rest.

Processing and Other Charges

  • As of November 2020, these details are not available on the bank’s website. Please get in touch with the bank for more information

Uses of the Loan

  • Fee payable to the college including tuition, hostel, examination, library or laboratory fees
  • Cost of books, equipment, instruments or uniform
  • Travel expenses including overseas travel expenses when studying abroad
  • Cost of computer or laptop, as needed for the course. The cost of a computer for home assignment can also be included in the total loan amount
  • Expenses on student exchange programme, study tours, project work, thesis, etc.
  • Payments categorised as caution deposit, building fund, refundable deposit, etc.
  • Insurance premium

Other Features to Know

  • The bank may ask for the student’s progress report to be submitted with the bank at regular intervals since the satisfactory performance of the student is necessary for continued disbursal of the education loan
  • The loan is disbursed directly to the school, 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 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, employment/business/income proofs are required

Reference Facts

  • Federal Bank Website: www.federalbank.co.in
  • Headquarters: Kochi, Kerala
  • Call Centre Toll-Free Number: 1860 267 6161