Karnataka Bank KBL Vidya Nidhi Education Loan

Karnataka Bank KBL Vidya Nidhi Education Loan for Higher Studies in India and Abroad

The KBL Vidya-Nidhi 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 Karnataka Bank Special Vidya Education Loan

Why this Loan?

  • The loan is meant to help students fulfil their dreams of pursuing higher education in India or abroad
  • This Karnataka Bank 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 institution fees as well as related expenses including purchase of books, laptops, hostel fees, lab fees, examination fees, etc.
  • Deserving students can avail interest subsidy on this loan under the Central Scheme of Interest Subsidy offered by the Government of India

Loan Amount

  • The maximum loan amount for studying is Rs. 10 lakh in India and Rs. 20 lakh for studying abroad

Interest Rate

  • Loans up to Rs. 7.5 Lakh (Covered under CGFSEL): The interest rate for this loan is 9.99%
  • Loans up to Rs. 7.5 Lakh (Not Covered under CGFSEL): Not specifically mentioned on the bank’s website. Probably the same interest rate as loans under CGFSEL but please check with the bank for details
  • Loans Above Rs. 7.5 Lakh: The effective interest rate for this loan amount is 12.39%. Meritorious students and girls get a concession of 0.05% and 0.10% respectively, making the effective interest rates 12.34% and 12.29% for them. Meritorious girl students get a concession of 0.20% and the effective interest rate for them is 12.19%
  • The moratorium period for this loan scheme is course period plus 12 months after the completion of the course


  • 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

  • Loans up to Rs. 7.5 Lakh (Covered under CGFSEL): Parents must be co-borrowers of the loan. No collateral security is required
  • Loans from Rs. 4 Lakh up to Rs. 7.5 Lakh (not under CGFSEL): Parents must be joint applicants. Third-party guarantee is mandatory
  • All Loans Above Rs. 7.5 Lakh: Parents must be joint applicants. Tangible collateral security that is equivalent to the quantum of the loan is required. The bank also requires an assignment of future income of the student


  • 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

  • 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
  • ICWA, CA, CFA courses
  • Courses from IIM, IIT, XLRI, NIFT
  • Courses offered by reputed foreign universities in India and Evening Courses from approved institutes
  • Job-oriented programmes from recognised foreign colleges and universities. Study programmes from recognised institutes or bodies such as CIMA-London, CPA USA, etc.
  • Vocational and Skill Development courses are not eligible

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.

Processing and Other Charges

  • As of November 2020, these details are available on the bank’s website. Please get in touch with the bank for more information

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 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, documentary proof of age, ID, signature and address, in addition to employment, business, or income proofs are required

Reference Facts

  • Karnataka Bank Website: www.karnatakabank.com
  • Headquarters: Mangalore, Karnataka
  • Call Centre Toll-Free Number: 1800 425 1444