A Quick Review of the SBI Education Loan

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    As most of Indians prefer to study abroad, most of the banks provide education loan, however, they have set basic eligibility criteria to avail the loan.

    And availing loan, can even help the co-applicant in saving tax, as you will be eligible for a tax rebate for the interest you pay on an education loan under Section 80-E of the Income Tax Act 1961.

    A Quick Review of the SBI Education Loan
     

    What are the Expenses considered for loan?

    • Fees payable to college/school/hostel
    • Examination/Library/Laboratory fees
    • Purchase of Books/Equipment/Instruments/Uniforms, Purchase of computers- essential for completion of the course (maximum 20% of the total tuition fees payable for completion of the course)
    • Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tuition fees for the entire course)
    • Travel Expenses/Passage money for studies abroad
    • Cost of a Two-wheeler upto Rs. 50,000/-
    • Amount of Loan can be availed
    • For studies in India, maximum Rs. 10 lacs
    • Studies abroad, maximum Rs. 30 lacs

    What are the Documentation Required?

    • Completed Education Loan Application Form.
    • Mark sheets of last qualifying examination
    • Proof of admission scholarship, studentship etc
    • Schedule of expenses for the specified course
    • 2 passport size photographs
    • PAN Card of the student and the Parent/ Guardian
    • Borrower's Bank account statement for the last six months
    • Income tax Returns/ IT assessment order, of last 2 yrs (If IT Payee)
    • Brief statement of assets and liabilities, of the Co-borrower
    • Proof of Income (i.e. Salary slips/ Form 16 etc. if applicable)
    Loan Limit and Repayment period
    Maximum Loan Limit Repayment Period
    Upto Rs. 4 Lacs Upto 10 years
    Above Rs. 4 Lacs and upto Rs. 7.5 Lacs Upto 10 years
    Above Rs. 7.5 Lacs Upto 12 years

    Security and Amount

     
    Particular Security
    Upto Rs. 4 lacs loan amount Only Parent/ Guardian as co-borrower Parent/ Guardian as co-borrower and Collateral security in the form of suitable third party guarantee*.
    Above Rs. 4 lacs to Rs. 7.50 lacs loan amount *Third Party Guarantee can be replaced with Parent/Guardian as co-borrower provided the Gross Annual Income of Parent/Guardian (co-borrower) as given in latest Income Tax Return is 3 times of the loan amount.
    Above Rs. 7.50 lacs loan amount Parent/ Guardian as co-borrower and tangible collateral security

    Margin required:

    • For loans up to Rs.4.0 lacs : No Margin is required
    • For loans above Rs.4.0 lacs:
    • Studies in India: 5% margin is required
    • Studies Abroad: 15% margin is required

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