What are the documents required for an education loan to study abroad?
Almost every bank provides
education loans to the students for studying abroad. Primarily, the bank checks
the repaying capacity of the co-applicant. Here is the list of documents
required to apply for the education loan:
The government of India, ministry of finance, department of economic affairs (Banking Division) has considered and decided to accept the model scheme prepared by IBA for implementation, subject to the following modifications:
The condition of minimum qualifying marks in the last examination may be dropped. No margin may be insisted upon for loans up to Rs 4 lakh. However, for loans of higher amounts, the margin requirement may be 5% for inland studies and 15% for studies abroad. No security may be insisted upon for loans up to Rs.4 lakh. However, for loans above this amount, collateral security of suitable value or co-obligation of parents/guardians/third party along with the assignment of future income of the student for payment of instalments may be obtained. Loans up to Rs.4 lakh may be advanced at an interest rate not exceeding PLR of the bank. Above Rs.4 lakh, the interest rate may be PLR + 1%.
Rate of interest
- Up to Rs 2 lakh: PLR
- Above Rs 2 lakh: PLR + 1%
* The interest to be debited quarterly/ half yearly on simple basis during the Repayment holiday/ Moratorium period.
* Penal interest @ 2% be charged for above Rs.2 lakh for the overdue amount and overdue period.
Repayment holiday/Moratorium: Course period + 1 year or 6 months after getting job, whichever is earlier.