Federal Bank Education Loan

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Federal Bank Education Loan

History

Federal Bank was founded as Travancore Federal Bank on 23rd April 1931. It was later renamed as Federal Bank after it completed all the legal obligations under the Banking Regulation Act, 1949.

Federal Bank is a Private, scheduled commercial bank with its headquarters in Aluva, Kochi. It has a workforce of over 12,500 employees along with offices spread across all over India.

Overview

Federal Bank offers three products / schemes under their education loan -:

  1. Special Vidya Loan
  2. Fed Scholars
  3. Career Solutions Loan
Scheme Name Details
Special Vidya Loan
  1. -Applicable to Indian National
  2. -Loan for students to study in India and abroad
  3. -Loan amount up to 20 lakh

Special Vidya Loan

The main purpose of this loan is to allow meritorious students to pursue their higher education in India as well as abroad, by providing them with financial assistance. The loan amount can be used to cover a variety of expenses a student may incur while studying abroad. This may include college tuition, books and stationery, lodging or hostel charges, caution deposits, instruments, travel expenses etc.

Eligibility of courses

The loan is applicable only for pursuing technical and professional courses in India and abroad. Vocational training and skill development courses will not be applicable for this loan. Some e.g. of vocational profession may include electrician, truck drivers, hair stylists etc. Applicable Courses include Diploma, Graduate/Post-Graduate courses in Arts, Science and Commerce etc.

Eligibility of applicants

There are some prerequisite criteria’s that has to be satisfied by the applicant before he is eligible for the loan. These criterions are -:

  1. Applicant should be an Indian National.
  2. The courses to which he is applying to should have necessary recognition and approvals.
  3. The course certificate / degree should be issued by the university or a Government department.

Max Loan Amount

 

The maximum loan amount for studying in India is 10 lakh rupees, whereas students can take loan of up to 20 lakh rupees for studying abroad

 

Margin Amount

It is the amount which the borrower will have to pay towards the loan amount thus contributing to the entire amount borrowed.

For loan amount up to 4 lakh rupees there is no margin amount. For loan amount above 4 lakh rupees the margin is 5% and 15% for India and abroad respectively.

 

Processing Fee

There is no processing fee applicable for this loan.

Loan Security

For loans up to 4 lakh rupees – No security is needed

For loans up to 7.5 lakhs – Third party guarantee (he will be liable for the loan amount in case the applicant defaults) and/ or collateral security

For loans above 7.5 lakhs – Collateral security (they are your property which the bank will use as a security against the loan they are providing with stipulated margins)

Repayment

The loan tenure is usually between 5- 7 years. The repayment of loan starts after the moratorium period (this the duration of applicant’s course + 1 year / 6 months after the applicant gets a job, whichever is earlier). The repayment of the loan is done through EMI by the means of cheques, online transfer, ECS etc. Only simple interest will be charged during moratorium period.

Scheme Name Details
Fed Scholars
  1. -Applicable to Indian National
  2. -Loan for students to study in select Indian Institutes
  3. -Loan amount up to 20 lakhs

Fed Scholars

The aim of this loan is to provide financial assistance to applicants to pursuing various courses at select premier institutes in India. This loan is offered to applicants with a longer loan tenure and with no security.

Eligibility of courses

The loan will be provided only to those students who are pursuing courses at select premier Indian Institutes. This includes -:

  1. IIM
  2. IIT
  3. AIMS
  4. IIFT
  5. XLRI

Eligibility of applicants

There are some prerequisite criteria’s that has to be satisfied by the applicant before he is eligible for the loan. These criterions are -:

  1. Applicant should be an Indian National
  2. Should have secured admission in one of the 50 listed institutes
  3. Management quota seats will not be considered for the loan

Max Loan Amount

The maximum loan that can be availed is 20 lakh rupees without any collateral security.

Margin Amount

No margin amount for loan up to 10 lakh rupees. A margin of 5% is however applicable to loan amount above 10 lakh rupees.

Processing Fee

There is no processing fee applicable for this loan.

Loan Tenure and Repayment

This scheme has a tenure of 15 years. The repayment of loan starts after the moratorium period (this the duration of applicant’s course + 1). The repayment of the loan is done through EMI by the means of cheques, online transfer, ECS, FEDNET, Mobile banking. Only simple interest will be charged during moratorium period.

Scheme Name Details
Federal Career Solutions Loan
  1. -Applicable to Indian National
  2. -Loan for students for vocational training, pilot training or other management courses
  3. -Loan amount up to 1 Crore

Federal Career Solutions Loan

The aim of this scheme is to provide financial assistance to applicants who are pursuing vocational training courses, Pilot trainings, skill up gradation, diplomas or degrees in aviation, hospitality, travel management etc. in India and abroad.

Eligibility of courses

A wide range of vocational training courses, pilot training programs, skill up gradation courses (this includes industrial training) , hospitality (flight attendant , event managers , hotel management) , travel management , executive development courses are eligible for the loan.

Eligibility of applicant

There are some prerequisite criteria’s that has to be satisfied by the applicant before he is eligible for the loan. These criterions are -:

  1. Should be an Indian citizen
  2. Should be at least 18 years of age and not more than 45 years old
  3. Proof of admission in the particular course or programme
  4. Net worth should be double the loan amount

Max Loan Amount

The maximum loan that can be availed to pursue a course in India is 75 lakh rupees. The maximum loan that can be availed to pursue a course abroad is 1 crore rupees.

Loan Security

Assets / equipment’s purchased by the applicant using the loan amount will be hypothecated by the bank. The loan amount will be collaterally secured by ne or more following securities:

SECURITY MARGIN
Pledge of Bank’s own deposit 10%
Shares / Debentures 50%
LIC (Surrender Value) 10%

Loan Tenure and Repayment

The loan tenure is 10 years. The repayment of loan starts after the moratorium period (this is the duration of applicant’s course + 1 year / 3 months after the applicant gets a job, whichever is earlier). The repayment of the loan is done through EMI by the means of cheques, online transfer, ECS etc. Only simple interest will be charged during moratorium period.

  • Even if the student/ applicant fails to earn a degree / complete the course the repayment still has to be made.

Interest Rates

The interest rates offered by Federal bank is very competitive and at par with its competitors. Interest rates on educational and career loans are floating and fluctuates with respect to the MCLR. MCLR stands for marginal cost funds-based lending rate. It is the minimum rate at which a bank can lend. Thus, the interest rates lie in the range of 10.85%- 15.25%.

Documents Required (may vary depending on the scheme)

Proof of Identity – Passport/ Voter’s ID

Address Proof – Telephone Bill / Electricity Bill

Photograph of applicant and guardian

Mark list of qualifying exams

Proof of income of guardian – Bank statements

List of all possible expenditure to be incurred during the course

Proof of selection into the course – Offer/ Admission letter from the college

How to Apply for the loan?

  1. Applicants can download pdf application form, from the bank’s website. They can then fill and upload the pdf to the website. They will then be called to their nearest bank branch for further procedures.
  2. Applicants can visit its nearest bank and make an appointment to know more about the schemes
  3. The applicant can also apply online using the Vijay Lakshmi portal. Students will have to create an account and will have to fill and upload necessary documents and information. They can then track their application process through this portal.

 

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