Union Bank of India Education Loan for Premier Educational Institutes
This loan helps students who have gained admission into premier educational institutions in India to pay for their course fees. The maximum loan you can get depends on Union Bank of India’s categorisation of the institute. The maximum loan amount that you can apply for is Rs. 40 lakh for Tier I Institutes and Rs. 12 lakh for Tier II Institutes.
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Features of Education Loan for Premier Institutes
Why this Loan?
- The loan is meant for you if you have gained admission into a Bachelors, Masters, Doctorate (PhD) or a professional studies programme at a premier institute in the country
- The Union Bank of India Education Loan for Premier Institutes is disbursed to the institution as required to pay the fees or other approved charges
- Tier I Institutes: The maximum loan amount is capped at Rs. 40 lakh. You can check the categorisation of premier institutes on the bank’s website
- Tier II Institutes: The maximum loan amount is capped at Rs. 12 lakh
- Tier I Institutes: These loans are charged only the External Benchmark Lending Rate (EBLR) which the sum of the RBI Repo Rate of 4.00% and a margin of 2.80%, which makes this rate 6.80%
- Tier II Institutes: These loans are charged the sum of EBLR and 1.75% which brings the effective interest rate for this loan to 8.55%. Girls and students from SC, ST or minority communities get a concession of 0.50%
- The repayment period for this loan is 15 years
- The loan amount for each year is repayable in 12 equated monthly instalments, with the first instalment becoming due after the end of moratorium period
- The moratorium period for this loan is course duration + 12 months
- Tier I Institutes: No collateral of third-party guarantee is required to avail this loan
- Tier II Institutes:
- Loan upto Rs. 4 lakh: No collateral or third-party guarantee is required for loans covered under Credit Guarantee Fund Scheme for Education Loans (CGFSEL)
- Loan from Rs. 4 lakh to Rs. 7.5 lakh: Third-party guarantee is needed but no collateral needed if loan covered under CGFSEL
- Loan from Rs. 7.5 lakh to Rs. 12 lakh: Tangible collateral worth more than or equal to the loan amount is required
- The applicant must be an Indian national
- The student should have gained admission into a recognised higher education course one of the listed premier educational institutes in India through an Entrance Test or a Merit-based Selection process
- All full-time regular higher education programmes at premier institutes in India
- Check the list of eligible institutes on the Union Bank of India website here for Tier I and here for Tier II
- Short-duration and executive coursed are not eligible for this loan
Borrower Contribution to Total Cost (Margin Money)
- Loans for Studying in Tier I Institutes: Students do not have to pay margin money for this loan
- Loan upto Rs. 4 lakh for Tier II Institutes: Students do not have to pay margin money for this loan
- Loan over Rs. 4 lakh upto Rs. 12 lakh for Tier II Institutes: Students have to pay 5% of the total course expense as margin money for this loan
Note: Margin money refers to the amount the borrower contributes to the overall amount required. Suppose a course costs Rs. 10 lakh in which case the borrower securing admission in a Tier II institute has to provide Rs. 50,000 (5% of Rs. 10 lakh) as their contribution while the UBI offers the rest.
Processing and Other Charges
- There are no processing charges for this loan
Uses of the Loan
- Admission acceptance fee, tuition fees, exam fees, library fees, laboratory fees
- Hostel charges or mess charges and living expenses
- Cost of books and of equipment such as desktop or laptop, uniforms, etc.
- Caution deposit or any other refundable deposit. This has to be deposited in the loan account as soon as it is refunded
- Insurance premium
- Other expenses such as expense for student exchange programme, project work, thesis, etc.
- The Tier I loan can be used for the purchase of a 2-wheeler vehicle subject to a spend limit of Rs. 1.5 lakh
Other Features to Know
- Life insurance of the student for an amount equal to the loan value is mandatory
- The student’s progress reports may have to be submitted with the bank at regular intervals
- Disbursed directly to the college, bookseller or publisher, computer seller, and so on and not to the applicant(s)
- 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, employment/business/income proofs are required
- Union Bank of India Website: www.unionbankofindia.co.in and www.unionbankonline.co.in (net banking)
- Headquarters: Mumbai, Maharashtra
- Call Centre Toll-Free Number: 1800 2222 44, 1800 208 2244