Bank of India Education Loan

Star Education Loan for Studies Abroad offered by Bank of India enables Education Loans up to Rs. 150 Lakhs for Full-time Degree/Post Graduate courses. The Indian nationals shall be required to gain admission to the recognized institutions. The loan includes the fee, books, equipment, laptops, and optional insurance to cater for. Courses approved should come from universities or faculties that have been recognized by the local education authorities or those highly ranked. The loan margin is different; there is no margin for loan amounts up to Rs. 4 Lakhs, while for loan amounts greater than Rs. 7 Lakhs there is a 10% margin. 5 Lakhs. Interest rates start from RBLR + 1. 70% to +2.50%. The repayment period is 15 years starting from the one-year grace period of the course duration.

Loan Purpose: STAR VIDYA LOAN is specifically designed to financially support students pursuing education in esteemed institutions across India.

Loan Amounts:

1. Institutions under List “A”: Up to Rs. 40.00 Lacs
2. Institutions under List “B”: Up to Rs. 25.00 Lacs
3. Institutions under List “C”: Up to Rs. 15.00 Lacs

Covered Expenses:

• Education Costs: Covers fees payable to college/school/hostel, examination/library fees, and purchase of books/equipment/instruments.
• Technology Support: Includes the purchase of computers/laptops, aiding students in their academic endeavors.
• Financial Security: Caution deposit/building fund/refundable deposit supported by institution bills/receipts.

Eligibility:

Exclusive to Indian Nationals who have secured admission in select Premier Educational Institutions in India via Entrance Test/Selection process.

Covered Courses:

• Full-time Degree/Diploma courses (certificate/part-time courses not covered).
• Full-time Executive Management courses like PGPX (For IIMs) are included.

Margin & Security:

• Requires NIL margin, ensuring financial ease for the applicants.
• No collateral security needed; however, parents/guardians must join as Co-borrowers.
• Assignment of future income acts as an additional form of security.

Interest Rate: Set at 10.45% for institutes listed in List A, B, or C by the bank.

(NOTE- To check the latest and detailed interest rate of Bank of India click here)

Repayment Period:

• Moratorium offered up to the course period plus an additional year.
• Repayment tenure extends up to 15 years from the commencement of repayment, providing ample time for repayment.

Key Features:

• Parents of students enrolled in recognized Indian schools from pre-school to senior secondary education.
• Offers a maximum loan amount of up to Rs. 4.00 Lakhs per educational stage, with repayment in 12 equated monthly installments immediately after loan disbursement.

Maximum loan: Rs. 4.00 Lakh (For each educational stage).

Expenses Covered:

• Tuition and hostel fees, examination/library/lab charges, purchase of study materials, uniforms, computers/laptops, and other school-related expenses.
• Additional expenses directly related to education.

Security and Insurance:

• No requirement for collateral security, ensuring accessibility for a wider range of borrowers.
• Optional Term Insurance cover available for student borrowers, with the premium included as part of the loan finance.
• Eligibility for parents and students as Resident Indians with a reasonable source of income.

Course Coverage:

Aligned with specific educational stages:

1. Pre-school (Play school to 2nd class)
2. Primary School (3rd to 5th class)
3. Upper Primary School (6th to 8th class)
4. Secondary School (9th and 10th class)
5. Senior Secondary School (11th and 12th class)

Margin and Interest Rate:

• Nil Margin for loans up to Rs. 4.00 lacs.
• Interest rate at RBLR+ CRP of 1.70% p.a., floating with monthly rests.

Key Features:
This specialized loan is designed for individuals seeking to pursue skill development courses within India.

Loan Amount Range:

Applicants can avail themselves of loan amounts ranging between Rs. 5,000/- to Rs. 150,000/- for courses meeting the eligibility criteria.

Margin & Security Measures:

• There is no necessity for a margin.
• No collateral or third-party guarantee is mandatory.
• The loan documentation involves the joint signing of the loan document by both the student borrower and a parent.

Expenses Covered:

• The loan covers various expenses such as tuition/course fees, examination/library/lab fees, caution deposit, and the procurement of essential study materials.
• Other justifiable expenses essential for course completion are also considered, such as accommodation and boarding where deemed necessary.

Eligible Courses:

• The loan encompasses courses offered by Industrial Training Institutes (ITIs), Polytechnics, schools recognized by Central/State Education Boards, and colleges affiliated with recognized universities.
• Additionally, courses conducted by training partners associated with the National Skill Development Corporation (NSDC), Sector Skill Councils, State Skill Missions, or State Skill Corporations leading to certifications, diplomas, or degrees aligned with the National Skill Qualification Framework (NSQF) are included.

Eligibility Criteria:

Applicant eligibility is contingent upon Indian nationality and securing admission to NSQF-aligned courses offered by recognized educational institutions.

Interest Rate Structure:

The interest rate is calculated at RBLR+ CRP of 1.50%.

Repayment Framework:

• The loan offers a moratorium period extending up to the course duration plus an additional year.
• Repayment tenure is categorized based on the loan amount:
  
  • Loans up to Rs. 50,000/-: Less than 5 years
  • Loans ranging from Rs. 50,000/- to Rs. 1.00 lakh: Up to 5 years
  • Loans exceeding Rs. 1.00 lakh: Up to 7 years

Loan Objective:
Facilitating working professionals pursuing part-time or distance education within India by offering financial assistance.

Loan Amounts:

Consideration extended up to a maximum of Rs. 20.00 Lakhs.

Covered Expenses:

• Coverage includes tuition fees, examination charges, and deposits supported by institution-provided bills/receipts.
• Additionally, it covers purchases like study materials, equipment, uniforms, computers/laptops, and any other supplementary expenses directly related to the course.

Eligibility Criteria:

• Requirements include Indian nationality, employment in reputable sectors (Govt./Private Sector/MNCs), consistent employment throughout the course tenure.
• Applicants must be below 55 years old, with a minimum of 2 years of work experience and a clean credit history.

Eligible Courses:

• Recognized part-time or distance education courses from established universities.
• Executive Diploma/Certificate Programs (EDP) from leading business schools listed in "List –A" under the Star Vidya Loan scheme.

Margin and Security Details:

• Margin requirement varies based on the loan amount, starting from 5% for amounts up to Rs. 4.00 lakhs and up to 15% for amounts exceeding Rs. 7.50 lakhs.
• Security measures involve no requirement for loans up to Rs. 4 lakhs, while collateral or future income assignment applies for higher amounts.

Interest Rates:

• Interest rates follow a structure with 1 Year RBLR + 1.70% for loans up to Rs. 7.50 lakhs 
• 1 Year RBLR + 2.50% for amounts more than 7.50 lakhs.

Charges and Repayment Terms:

• Zero processing charges and defined portal charges, with one-time deviation fees as per the scheme norms.
• Repayment specifics entail no moratorium post-course completion and a repayment period extending till the age of 60 or within 10 years after course conclusion, whichever arrives earlier.

Understanding your education loan's EMI and repayment options is essential. Imagine taking a Rs. 8 lakhs loan for a 36-month with an interest rate of 9.5% per annum and a 12-month moratorium. Here's how you'd calculate your EMI:

First, find the total amount due after the moratorium:

Total amount = Loan amount + (Loan amount * Interest rate * Moratorium period / 1)
Total amount = 8,00,000 + (8,00,000 * 9.5 * 12 / 100)
Total amount = Rs. 9,64,000

Now, compute the EMI using this formula:

EMI = [P x R x (1+R)N]/[(1+R)N-1]
Where,

P = Principal amount (loan amount)

R = Rate of interest (monthly)

N = Tenure (in months)

Monthly interest rate = Annual interest rate / 12
Monthly interest rate = 9.5 / 12 = 0.792%
Tenure = Course period + Moratorium period
Tenure = 36 + 12 = 48 months

EMI = [8,00,000 x 0.792% x (1+0.792%)48]/[(1+0.792%)48-1]

EMI = Rs. 24,603

Hence, the EMI for your loan would be Rs. 24,603. Remember, the repayment starts immediately after the moratorium ends. While the repayment period for Bank of India's education loan is 15 years, you have options to expedite repayment:

• Opt for shorter repayment periods.
• Consider pre-payment or part-repayment.
• Explore transferring your education loan to potentially better terms elsewhere.

The student loan EMI calculator of the Bank of India is given on its website along with a bank of India education loan interest rate calculator, but we suggest you use the WeMakeScholars, education loan EMI calculator for the following reasons:

• Pin-point accuracy in calculation
• Detailed analysis report of repayment plan
• It is free of cost
• Strategic advantage to decide repayment parameters

The Government of India has introduced several interest subsidy schemes for students who wish to pursue higher education in India or abroad. These schemes provide financial assistance or interest subsidies to qualifying students. Some of the popular schemes include:

1. Central Govt. Interest Subsidy Scheme (CSIS)
2. Padho Pardesh Scheme
3. Dr. Ambedkar Scheme for OBC and EBC

(To know more about these subsidy schemes click here)

Central Scheme for Interest Subsidy (CSIS)

Eligible students belonging to the EWS section of society are benefited under the CSIS scheme.

Eligibility criteria for CSIS 

• Students should take admission in India only
• Students should belong to the EWS section of society.
• Student’s family income should not be more than Rs 4.5 lacs per annum
• Benefit: Eligible students are not required to pay any interest on their education loan during the moratorium period.

Dr. Ambedkar Interest subsidy scheme for OBC and EWS students

Eligible students belonging to OBC and EBC sections, get interest subsidies in the moratorium period of their loan. It is only for study abroad aspirants.

Eligibility for Dr. Ambedkar Interest subsidy scheme for OBC and EBC students

• Admission of students must be confirmed in M.Phil, Phd or masters courses abroad
• Family income should be less than Rs 8 lacs annually for EBC category and OBC category students
• Caste certificate is mandatory for students belonging to OBC category.
• Only those loans which are taken from scheduled bank as per IBA guidelines are considered eligible

Benefit: Interest payable in moratorium period of the loan will be waived off.

Padho Pardesh Scheme

The Ministry of Minority Affairs launched the scheme to benefit abroad study aspirants, belonging from EWS of notified minority communities.

Eligibility criteria for Padho Pardesh Scheme

• Students should enroll in M.Phil., Ph.D., and Masters-level courses.
• According to the criteria of the Indian Banks Association, students should have obtained the loan from a scheduled bank.
• The student's family's combined income should not exceed Rs 6 lacs annually.
• Income documentation certified by the government is required.

Note: The scheme has been discontinued by the government, after 31st March 2022. But, the existing beneficiaries will continue to enjoy the benefits.