Looking for an Education Loan to Finance Your Technical Education?

Look no further. This page summarises the information you will need on Union Bank of India’s Skill Loan Scheme for technical courses.

Union Bank of India Skill Loan Scheme

This loan helps students who have gained admission into technical courses offered by training institutes, polytechnics, to pay for their course fees. The loan amount starts from Rs. 5,000 and can go up to Rs. 1.5 lakh depending on the duration of the course.

Features of Union Bank of India Skill Loan Scheme for Technical Courses

Why this Loan?

  • The loan is meant for you if you have gained admission into a technical course offered by a polytechnic, training institute (ITI), etc. in India
  • The bank disburses the loan as a series of payments over the required number of terms or years to pay the course fees or other approved charges

Loan Amount

  • The minimum loan amount starts from Rs. 5,000 and the maximum amount can go up to Rs. 1.5 lakh depending on the duration of the course

Interest

  • Loans Covered Under CGFSSD: The interest rate for this quantum of loan is EBLR + 1.50% where EBLR is External Benchmark Lending Rate. As of November 2020, the EBLR of Union Bank of India is 6.80% which brings the effective interest rate for this loan at 8.30%
  • Loans Not Covered Under CGFSSD: The interest rate for this quantum of loan is EBLR + 3.25%, which brings the effective interest rate for this loan to 10.05%. Girl students get a concession in interest of 0.50%

Note: Credit Guarantee Fund Scheme for Skill Development (CGFSSD) is a Central Govt. initiative to make it easy for banks to advance loans by guaranteeing the amount given as loan.

Repayment

  • Loans of up to Rs. 50,000: Repayment period is up to 3 years after course completion
  • Loans between Rs. 50,000 and 1 lakh: Repayment period is up to 5 years after course completion
  • Loans above Rs. 1 lakh: Repayment period is up to 7 years after course completion
  • The repayment moratorium for courses of less than 1 year is for the course duration and an additional grace period of 6 months after course is completed
  • The repayment moratorium for courses of over 1 year duration is for the course duration and an additional grace period of 12 months after course is completed

Security Needed

  • Union Bank of India does not ask for any security or third party guarantee. However, the parents have to sign the loan documents with the student as joint borrowers. If the child is a minor, then parents can take the loan under their own name

Eligibility

  • The borrower should be an Indian national

Eligible Courses

  • Students of courses offered by Industrial Training Institutes (ITIs), polytechnics, schools recognised for the same by the central or state education board or college affiliated to a recognised university are eligible for the loan
  • Even students pursuing a certificate, diploma or degree course from training centres that are affiliated to professional skill augmentation bodies such as National Skill Development Corporation (NSDC), sector skill councils, state skill missions, state skill corporations and who operate under the National Skill Qualification Framework (NSQF) are eligible to apply for the loan
  • The bank allows its State Level Bankers committee (SLBC) or State level Co-ordination Committee (SLCC) to add state-specific skill development courses that offer good employability opportunities for course students

Borrower Contribution to Total Cost (Margin Money)

  • The bank does not charge any margin money on this loan

Note: Margin money refers to the amount the borrower contributes to the overall amount required

Processing and Other Charges

  • There are no processing charges for this loan

Uses of the Loan

  • The loan amount can be used to pay any fees or other charges that are a part of the standard tuition cost
  • The loan can also be met to cover examination, library and laboratory fees
  • It also covers any caution deposit fees
  • It can also be used to buy books or equipment or instrument needed for the course

Other Features to Know

  • The student’s progress reports have to be submitted with the bank at regular intervals
  • The loan is disbursed directly to the college, bookseller 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 parents along with details of applicant and/or parents
  • Two Passport Size Photographs of applicant(s)
  • Photocopy of PAN Cards of the student or parents that need 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
  • Fee Details with Demand of Fee by the Institution
  • All Proofs of Past Academic Record including Mark Sheets and Certificates
  • An Income Certificate from a Competent Authority to avail the interest subsidy under Central Interest Subsidy Scheme of Education Loans, if eligible

Reference Facts

  • 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