Federal Bank Special Vidya Education Loan

Federal Bank Special Vidya Education Loan

The Federal Bank Student Loan Scheme helps students who want to pursue higher studies in India and abroad afford the cost of the course and related expenses. This loan scheme is based on the Indian Banks Association (IBA) Model Education Loan schemes. The maximum loan amount you can get for studying in India is Rs. 10 lakh and the maximum loan amount you can get for studying abroad is Rs. 20 lakh.

Features of Federal Bank Special Vidya Education Loan

Why this Loan?

• The Federal Bank Special Vidya Education Loan is meant to help students fulfil their dreams of pursuing higher education in India or abroad
• The loan is disbursed as a series of payments over the required number of years and not as a lump sum
• It can be taken for all institution fees as well as related expenses including cost of books, laptops, hostel fees, lab fees, examination fees, etc.

Loan Amount

• The maximum loan amount for studying in India is Rs. 10 lakh. For studying abroad, the maximum loan amount a student can get is Rs. 20 lakh

Interest

• The interest rate for this loan starts from 10.05%. 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 plus 12 months after the completion of the course

Repayment

• The loan amount for each year is repayable in equated monthly instalments up to a period of 15 years after the end of the moratorium period
• The interest accrued during the loan moratorium period is added to the principal to calculate EMIs for repayment

Security Needed

• For loan up to Rs. 4 lakh: No collateral security is required. Parents must be co-borrowers of the loan
• For loan from Rs. 4 lakh up to Rs. 7.5 lakh: Parents must be joint applicants. Third-party guarantee or collateral security is mandatory to be submitted
• Loans Above Rs. 7.5 lakh: Parents must be joint applicants. Federal Bank also asks for tangible collateral security that is equivalent to the quantum of the loan

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

Eligible Courses

• Degree or 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
• MCA, MBA, MS. etc. postgraduation courses
• Hotel or Hospitality Management, Event Management, Mass Communication, etc. courses
• Job-oriented programmes from recognised foreign colleges and universities
• 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. These include courses from institutes such as IIMs, IITs, IISc, XLRIs, NIFTs, NIDs, etc.
• Study programmes that lead to CWA, CA, CS, CFA, etc. accreditations
• Computer certificate courses from accredited institutes
• Study programmes from recognized institutes or bodies such as CIMA-London, CPA USA, etc.
• Degree or diploma courses in aviation and shipping approved by the Director General of Civil Aviation or Director General of Shipping, or in case of studying abroad, 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

Margin Money (Borrower Contribution to the Total Cost)

• Loans up to Rs. 4 Lakh: The borrower does not have to offer any margin money to get the loan
• Loans above Rs. 4 Lakh to Study in India: The borrower must offer 5% of the loan amount as margin money to get the loan
• Loans above Rs. 4 lakh to Study Abroad: The borrower must offer 15% of the loan amount as margin money to get the loan

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) as margin for Indian courses and Rs. 3 lakh (15% of Rs. 20 lakh) as margin for foreign courses.

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 or school 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, if needed for the course
• Expenses on study tours, project work, thesis, etc.
• Payments categorised as caution deposit, building fund, refundable deposit, etc. supported by bills or receipts from college or school. This amount should not exceed 10% of the tuition fee

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 or income proofs are required

Reference Facts

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