Federal Bank Education Loan

The tables below outline the details of two education loan schemes offered by the Federal Bank for abroad studies: the Federal Career Solution Loan and the Special Vidya Loan. These loans are intended for students who wish to study abroad for higher education and they entail rules and regulations concerning the loan limit, expenses that are covered, co-applicant criteria, interest rate, grace period, repayment period, and guidelines. 

Federal Career Solution loan

Students can apply to take loans for their higher education in any course abroad, except for vocational training and skill development.

Special Vidya Loan

The following tables provide an in-depth overview of three education loan schemes offered by the Federal Bank: the Special Vidya Loan, Fed Scholars (without collateral), and Federal Career Solution Loan. In each table, the loan limits, the expenses covered, the co-applicant requirements, the interest rates, the moratorium periods, the repayment duration, and certain eligibility criteria are provided. These schemes are introduced to help the students to manage their educational expenses of higher studies in India and these have different features and benefits as per the financial requirements and objectives of the students. 

Special Vidya Loan

Fed Scholars (without collateral)

Features of Fed Scholars

• Interest subsidy is available for eligible students
• Students can reimburse their expenses made during the running academic year
• There are no processing fees for this education loan scheme

Federal Career Solution loan

Acceptable collaterals with their collateral margin

The requirement of documents may differ for each scheme but here we have provided a list of general documents required for Federal bank education loan:

Section 1: Application form 

Student loan application form (hardcopy) filled on WeMakeScholars website with 2 passport size photographs

Section 2: Basic documents for Applicant (student) and co-applicant and/or Guarantor

• Identity proof – Passport of the applicant (if going abroad), PAN Card 
• 6 months latest bank statement of personal and salary account of the applicant, showing salary crediting or if self-employed 1 years business transactions
• At least 2 proof of address – Electricity Bill/ Passport/ Ration card/ Bank account statement/ Voter ID Card/ Telephone Bill/ Aadhar card. 
• Personal asset and liability statement (approved by the bank professional)

All the documents should be self-attested.

Section 3: Applicant Academic Documents

• Certificates and study marksheets- 10th, 12th, Degree
• Proof of admission in the course (mentioning total duration of the course)
• Score card of entrance examination
• Fee structure given by the college or university’s side

Section 4: Co-applicant Income documents

If Salaried

• ID card of the company
• Last 2 years form 16 
• Last 3 month’s salary slip
• ITR of last 2 yrs

If Self-employed

• Address proof of  business
• Last 3 yrs balance sheet
• Profit & Loss account of last 3 years (only if self-employed)
• ITR of last 3 yrs

Section 5: Other Documents

• Letter mentioning other expenses, apart from those covered in loan expenses will be borne by the co-applicant as per the format provided by your financial officer at WeMakeScholars
• Notarised joint affidavit with the student and co-applicant in bank’s standard format Format to be provided by WeMakeScholars Financial officer

Section 6: Additional docs (if applicable)

• All loan account statements of 1 year, if any pending loans.
• Certificate of gap if the student has had a failure or break in studies on Rs. 100 stamp paper. (Format to be provided by WeMakeScholars Financial officer)
  Receipts of payments made previously if any.

You can take a leap ahead of others by uploading your documents on the WeMakeScholars documents portal as per the documents checklist provided by your financial officer, request a callback or fill the common application form to  get your specially customized documents checklist.

The application process to take an education loan from Federal bank is:

Step 1 : Reach out to WeMakeScholars by Requesting a callback or filling a common application form

Step 2 : Give all your education loan details to your assigned  financial officer over a call

Your financial officer will analyze your loan profile and suggest you the best lenders, to get your loan sanctioned.

Step 3 : As per your eligibility and bank policies, choose your lender and tell your financial officer.

Step 4 : Submit all your documents in the bank, or upload them on WeMakeScholars documents portal according to the document checklist given by your financial officer.

Step 5 : Sit back and relax, your financial officer will take care of everything else, if required take follow ups from them from time to time.

Step 6 : Within 1 week, collect your loan sanction letter from private banks or NBFCs and within 15-20 days from the government bank.

The application process is not as simple as it looks if you go directly to the banks to get your education loan sanctioned. Following is the list of issues if you go directly to the banks:

• No clear idea about the eligibility for education loan
• Lack of proper customer services
• No particular list of required documents
• Unavailability of correct information
• Issues in legal and valuation reports
• Lots and lots of documentation
• Multiple visits to the banks, delaying the process

To fast track your education loan process, visit WeMakeScholars and apply online for an education loan. Here are the benefits of processing your education loan via WeMakeScholars:

• Minimal Processing time - Your education loan will be sanctioned within 15-20 days from a public bank and within 7 days from any public bank or NBFCs, after your documents are submitted.
• Digitized application process - Capitalizing the power of digitalization, you can apply for your education loan from the best lender and even complete the entire process, online.
• Expert guidance - With years of experience, we hold expertise in guiding students to get their education loan sanctioned, as we process 1000’s of loan files everyday. 
• Negotiation support - Our financial officers, if required, will negotiate on your behalf with the lenders team in terms of interest rates and bank policies. 
• Consistent availability - Your financial officer will be available from 9 AM to 9PM on all working days to help you out at every step of the process, till your loan is sanctioned, disbursed and repaid back to the banks.
• Cashback offer - When processing an education loan with WeMakeScholars you can get up to Rs 3,000 as a cashback at the time of your disbursement from us. 
• Tax benefits - We make sure you save your taxable income by informing you about the tax benefit schemes under Section 80E, Section 80C of the Income tax department.

We are the leading education loan processing partner and have helped thousands of students in getting their education loan sanctioned within their deadline. Request a callback, or fill a common application form, that will connect you to 10+ public and private banks in India, so that you can compare and get the best education loan deal.

The Federal Bank provides a moratorium period of course duration plus 6 months or 3 months after getting a job. And then the education loan repayment period starts, which can last upto 15 years at maximum.

Suppose a student gets an education loan of Rs 25 lacs at a 12% rate of interest for 15 years. Then the repayment schedule table of that student will look like the following:

However, students can choose to pay back their Federal Bank education loan even earlier by using the following methods:

• Prepayment or Part Payment
• Opting for shorter repayment periods
• Considering transferring your education loan

TIP - While giving the last cheque as your education loan EMI repayment, we suggest you keep a little extra amount of around Rs 5,000 or Rs 10,000, to avoid any penalty or CIBIL issue in the future.

WeMakeScholars' team will provide you with additional money-saving advice while you complete your student loan, from application to repayment when you do so through our service. Choose WeMakeScholars to handle your student loan processing by requesting a callback or filling out a common application form.

Padho Pardesh Scheme

The scheme was launched to benefit students belonging to EWS of notified minority communities, going for their studies abroad.

Eligibility criteria for Padho Pardesh Scheme

• Only loan taken under IBA guidelines from a scheduled bank
• Students should pursue courses at M.Phil, Ph.D. levels, and Masters.
• Annual family income of the student should not exceed Rs 6 lacs per year.
• The student’s family income certificate is mandatory.

Note: The scheme has been stopped. However, beneficiaries as of 31st march 2022 will continue to receive interest subsidy.

Dr. Ambedkar Interest subsidy scheme for OBC and EBC students

The Ministry of Social Justice and Empowerment launched the scheme for students belonging to  EBC and OBC categories, to give rebates on their interest payable within the moratorium period of their education loan. Eligible students going abroad can take benefit of this scheme.

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

• Family income of the student should not be more than Rs 8 lacs per annum for EBC category and OBC category
• Students should secure admission in the approved courses at M.Phil, Masters, or Ph.D. levels abroad
• Students belonging to OBC category will have to produce their caste certificate.
• Loan taken from scheduled banks as per the Indian Banking Association guidelines are only acceptable

Central Scheme for Interest Subsidy (CSIS)

The scheme was announced by the MHRD, now the Ministry of Education, to grant interest subsidies on education loans taken by students belonging to the EWS section of society. 

Eligibility criteria for CSIS 

• Students should have proof of belonging from the EWS section of society.
• Students must have secured admission in India in an approved course.
• Student’s annual family income should not exceed Rs 4.5 lacs.

Benefit: In the moratorium period, eligible students are not required to pay any interest on their education loan taken to study in India.