Karur Vysya Bank Education Loan

Karur Vysya Bank (KVB) helps students with their education costs through a loan that covers many different expenses. Whether you're studying in India or abroad, KVB's loan includes various costs you might face during your studies. While you can find more details in a separate article, here's a quick look at some of the things the KVB education loan can help you with.

• Educational Institution Fees: This covers charges related to college/school/hostel, including tuition, lodging, examination, library, and laboratory fees.
• Study-Related Costs: Expenses such as travel expenses, and purchase of essential materials like books, equipment, instruments, uniforms, and computers necessary for course completion are included.
• Additional Course Expenses: This covers any other essential expenses required to fulfill the course requirements, such as study tours, project work, thesis expenses, etc.
• Deposits and Funds: Expenses related to the caution deposit/building fund/refundable deposit supported by institution bills/receipts
• Insurance Coverage: Borrowers have the option to include insurance in their loan package, and the premium amount will be factored into the loan term.
• Tax Collected at Source (TCS): The TCS for foreign remittances are also included in the expenses.

Starting from October 1, 2023, foreign remittances exceeding Rs 7 lakhs (except for medical and educational purposes) are subject to a TCS of 20%. For education remittances, the TCS rate is 0.5% for loans.

NOTE- According to the data above, it is clear that you would be paying almost 90% less tax on foreign remittances if you are sending money through an education loan.

Are you planning to apply for a student loan through the  KVB? Before you proceed, it's crucial to gather all necessary documents to ensure a smooth processing of your loan application. Meanwhile, you can check out this blog “Documents Required for an Education Loan”, there we have provided you the complete list of the mandatory documents required for processing your education loan.Below, we've outlined the essential documents required by SBI for your convenience

1. Completed Application Form: Obtain the application form either from the bank directly or request it from our financial officer through a callback.
2. Admission Confirmation: Provide proof of admission from your chosen university or educational institution.
3. Identification Copies: Submit copies of identification documents such as Passport, Voter ID, Driving Licence, or PAN Card.
4. Passport Photos: Include two recent passport-size photographs of the applicant, co-applicant, and guarantor.
5. Educational Records: Present your latest mark sheet along with the results of any relevant entrance exams (e.g., CAT, GRE, GMAT, TOEFL, IELTS, etc.).
6. Financial Records:
   
   1. Income Proof: Furnish income proof of parents/guardians supported by the last 2 years' income tax statements.
   2. Financial Statements: Provide six months' bank statements or recent salary slips.
   3. Course Expenses Plan: Detail your anticipated course expenses comprehensively.
   4. Current Financial Obligations: Disclose details regarding existing loans and any scholarships received.
7. Institute Prospectus: Include a copy of the institute's prospectus to effectively estimate costs associated with the course.

To get your own education loan documents checklist specially customized as per your profile, request a callback from financial officers at WeMakeScholars or fill out the common application form, to start your loan process.

Many aspiring students aiming to pursue studies abroad through KVB loans often lack awareness regarding the types of collateral security accepted by the bank. This article aims to shed light on the acceptable collateral types, not only by KVB but also by other major government banks offering study abroad loans. Understanding these collateral options is crucial for any secured loan application process.

• Immovable Property:
  Among the frequently pledged assets, immovable properties stand out as a common form of collateral for study abroad loans. These assets include houses, residential flats,  defined plot boundaries, independent houses, non-agricultural lands, and similar properties.
• Liquid Security:
  Contrary to common belief, government banks such as SBI and BoB accept liquid assets as collateral for study abroad loans. Examples of such assets include Fixed Deposits, government bonds, and life insurance policies from government-approved lenders.
• Third-Party's Assets:
  In scenarios where candidates lack the aforementioned assets or their value doesn't meet the loan requirements, third-party assets can be pledged as collateral. These third parties, not directly related to the candidate's immediate family, may include uncles, aunts, friends, or primary co-applicants.

If you provide liquid security for an education loan, you may be able to get a loan amount equivalent to 100% of the value of the security. 

NOTE- Commercial property is acceptable, and the market value of all the properties is considered instead of realizable value.

• Market Value: If the asset was sold today in the current market, the value it was sold for would be considered the fair market value.
• Realizable Value: The realizable value of a property is the expected selling price of the asset in the future after removing the costs of selling the property.)

Collateral Margin

The collateral margin for Karur Vysya Bank education loan for abroad studies is 100% if the interest is paid during the moratorium period and 90% if the interest is not paid during the moratorium period. 

If you can make a Simple Interest payment during the moratorium period, you will be eligible for a higher loan amount. But it is not mandatory to pay.

• Minimal Processing time - Your education loan from private banks and NBFCs will be sanctioned within 7 days and from government banks within 15-20 working days after your documents are submitted.
• Expert guidance - Our expert financial officer, analyzes your loan profile and guides you through the education loan process to get the best education loan deal as per your eligibility.
• Negotiation support - Wherever possible, we negotiate with the lenders team in terms of rate of interest and loan conditions, on your behalf to get you the best deal.
• Better Interest rates - The banks offer special interest rate discounts of 0.5% to 2% on the usual rate for the students who process their education loan with WeMakeScholars.
• End-to-end support - We are available at your service, even after your loan gets sanctioned, to resolve your disbursement issues, even when you are on the other side of the earth.
• Tax benefits - We help you save tax collected at source (TCS) and also under Section 80E, 80C, etc of the Income tax department.
• Digitized application process - The online application process empowers students to complete the loan process online, in the comfort of their homes, it reduces the hassle of going to the banks again and again.
• Cashback offer - You get a cashback of up to Rs 3,000 from us when your loan is disbursed.
• Free-of-cost services - We are supported and funded by the Ministry of Electronics & Information Technology, under the Digital India Campaign, and therefore all our premium loan sanctioning services are entirely free of cost for all students.

(If you facing any problem understanding the terms used in this article for if you have any other doubt related to education loan. Feel free to comment down your queries below.)

The education loan repayment process in Karur Vysya Bank usually lasts up to 10 years but can be extended up to 15 years depending on the student's loan profile. 

Karur Vysya Bank has an education loan EMI calculator available on its website for students to get an insight into their EMI amount, but we recommend students use WeMakeScholars EMI calculator, through which students can calculate their EMI for their entire repayment duration. 

For example:

If a student takes an education loan of 40 lacs at a 10% rate of interest, to pursue their higher education in India and decides to repay the loan in 10 years, then the amortization schedule of the EMI will be:

TIP: While paying the last EMI instalment, we recommend that you add a little extra amount around Rs 5,000 or Rs 10,000, so as to avoid any type of additional outstanding amount if in case the branch manager closes your loan the next day.

If you wish you can opt to repay the education loan even before the stipulated repayment duration by implementing the following strategies:

• Transferring education loan
• Opting for a shorter repayment period
• Part-payment or Prepayment