IDBI Bank Education Loan
Established in the year 1964 as subsidiary of RBI in order to provide credit support to various industrial entities – both public sector undertakings (PSUs) and private manufacturing companies – Industrial Development Bank of India, a public sector bank with over 18,000 employees, currently operates not only in the lines of industrial credit, but also diversified it’s capabilities into retail, corporate and agricultural credit to reach high levels of borrowers base thus making way for inclusive growth.
Overview of variants in education loan schemes offered by IDBI Bank
A common feature is that only students of Indian nationals can avail these loan facilities.
|Education loan for Non-Vocational courses
- Loan granted to students who have secured admission to higher education courses in any recognized college, institute or university in India or in abroad purely on the basis of merit (as per entrance test scores or HSC marks)
- Students who have secured admission under management quota, but have cleared the cut off marks of entrance tests or HSC, as released by the institute, college or university.
|Education loan for students under management quota
- Loan granted for students who reside in India for the period of their studies
- It will have to be confirmed whether the students have secured admission under management quota. Hence, confirmation is necessary
|Education loan for specialized courses
- The loan is for any kind of degree/ diploma/ PG/ certificate courses offered by any recognized institutes, colleges or universities or courses offered by corporates, industrial manufacturing companies or courses offered by companies and institutes jointly
|Education Loan for Skill courses (Skill Loan Scheme)
- Must have secured admission in either Industrial Training Institute or in any Polytechnic institutes or in any Skill Development and Training Institutes affiliated to NSDC or in any state government promoted skill development programmes and workshops that leads to a diploma or certificate courses
|Udaan – unique saving & education loan scheme
- School going students between 8th and 10th grade
- Students who have opened a joint Recurring Deposit account in their as well as their earning parent’s names and paying their instalments at regular intervals
Further details under each scheme mentioned in above table
1. Education loan for Non-Vocational courses
This scheme includes lending loans to students wanting to pursue:
- CA/ CWA/ CS
- Engineering graduate degree or PG in Engineering from recognized institutes such as IITs. NITs, Government run technical colleges and universities etc.
- Technical Diploma course consisting of 3 years offered by any AICTE approved polytechnic institutes
- Courses offered in Indian colleges / institutes by foreign universities
- MBA from ISB Hyderabad, IIMs, IITs, IIFT, etc
- Doctoral studies from IITs, IISc or any other Central or State Universities
- MBA / MCA/ MS / Doctoral courses from abroad
- MBBS & MD from top medical colleges and institutes recognized by ICMR in India
- Special courses or diploma in pilot training, aeronautical sciences, maritime studies etc.
- In the case of students wanting to pursue professional finance courses like CA / CWA / CS, the quantum of loan amount will be a maximum of ₹ 3 lacs with no collateral required. However, students availing loan for these courses will need to attach their earning parent as joint borrower. The moratorium period for this loan would be the entire course period and an additional 1 year. The repayment period will be available up to 15 years from the completion of the moratorium period.
- For students wanting to pursue engineering degrees from tier 1 colleges (IITs, NITs, government run engineering colleges), or management courses from IIMs, IIFT, ISB etc or medical studies from top medical colleges, no collateral security required for a loan amount of up to ₹30 lacs. The quantum of loan will be ₹30 lacs or 100% of total cost of program of these institutes, whichever is lower.
- For other premier institutes where the aforesaid courses can be pursued, the loan amount of up to ₹20 lacs can be availed without collateral and for loans exceeding ₹20 lacs, parent is required to be a joint borrower and a tangible collateral security would be made necessary. The moratorium period would cover the entire course period and also an additional 1 year. The repayment period will be up to 15 years after the completion of moratorium period.
- For students wanting to pursue any other diploma/ certificate/ MBA/ MCA/ Doctoral course from any other institutes as recognized by the Indian statutory authorities like UGC and AICTE, the maximum amount that can be availed is up to ₹20 lacs and for courses of universities abroad, the maximum amount that can be availed is up to ₹30 lacs. No collateral is required for a loan amount up to ₹4 lacs. In case the loan amount ranges between ₹4 lacs to ₹7.5 lacs, a third-party guarantee and parent as joint borrower will have to be mentioned. Tangible collateral as well as joint borrower is mandatory in case the loan amount exceeds ₹7.5 lacs. The moratorium and the repayment period conditions are the same as mentioned previously.
2. Education loan for students under management quota
The courses applicable under this scheme are mostly job-oriented courses recognized by UGC / AICTE and offered by educational institutes, central and state universities, colleges.
Although the maximum loan limit amounts to ₹10 lacs, tangible security is mandatory. Also, the loan can be availed along with the co-applicant only, who can be a parent or guardian. The tangible security will have to be an immovable property in in the name of loan availing student or the co-applicant. Other type of collateral securities could be financial investments in the name of applicant.
There is no minimum age bar for the applicant while the maximum age limit would be 50 years at the time of loan maturity.
However, certain conditions apply for the co-applicant:
- Salaried: 21 years – 65 years
- Self-employed / Agriculturist: 21 years – 70 years
A margin amount of 15% of the total cost of program will be paid off before initiating the disbursement of loan. This 15% is irrespective of the loan amount or the place of studies.
The moratorium period covers the course duration and an additional 1 year with simple interest being charged during this period. The repayment period will be up to 10 years which excludes the moratorium period.
3. Education loan for specialized courses
This scheme is granted to students who have enrolled into degree / diploma / certificate or training courses offered by Indian institutes, central or state universities, government colleges etc.
This scheme can also be availed by employees or working professionals of corporates or industrial manufacturing companies, wherein they might be required to complete programs or courses as required by their employers. Courses such as SAP, management program for executives, chartered institute courses serve to advance the employees in their career ladder within their organizations. Hence such courses can be offered jointly by corporates and institutes.
The maximum loan amount that can be availed under this scheme is up to ₹15 lacs wherein no collateral security is required for amount of up to ₹4 lacs. For any loan amount between ₹4 lacs and ₹7.5 lacs, third-party guarantee and parent as joint borrower would be required. For any amount above ₹7.5 lacs, tangible security is mandatory. Such tangible security can be any immovable property, provided it is not an open plot or land involved in agricultural and allied activities. Other securities could be financial investments in the name of applicant.
No moratorium period is applicable under this scheme, while the repayment period is up to a maximum of 7 years.
4. Education Loan for Skill courses (Skill Loan Scheme)
In order to avail this facility, the applicant must have enrolled into courses offered by Industrial Training Institutes (ITIs) or any polytechnic institutes or any recognized centres for training of skill development or any training partners affiliated to NSDC or State Skill Corporation, which leads to issuance of degree / diploma / certificate as prescribed by the National Skill Qualification Framework.
The minimum and maximum loan facility that can be borrowed under this scheme is ₹5,000/- and ₹1,50,000/- respectively wherein for any course that is for a duration of up to 6 months, the loan amount is ₹50,000/- and for courses exceeding 6 months duration, the amount is up to ₹1,50,000/-
Although no collateral or third-party guarantee is required, the applicant’s parent will be required as joint borrower
Moratorium period under this scheme depends on the duration of the course.
- For any course that is up to 1 year – moratorium period will be for 6 months from the completion of course.
- For courses that are more than 1 year – the moratorium period will be applicable for 12 months from course completion.
Repayment period will be initiated after the completion of moratorium period.
- Loan up to ₹50,000 – 3 years
- ₹50,000 to ₹1 lac – 5 years
- More than ₹1 lac – 7 years
5. Udaan – unique saving & education loan scheme
A multi-purpose scheme that allows for savings as well as loan disbursement at later stage, this scheme targets school going students between 8th and 10th grade. This scheme is availed by the parents of these students.
One of the pre-requisites is to open a joint RD account in the name of the student and his/her parent and to ensure that the RD instalments are paid off regularly.
The joint RD account will have to be opened for a minimum term of 36 months and a maximum of 60 months. The tenure of RD should be completed by the time student completes HSC.
The minimum contribution to this RD account will be ₹1000/- p.m. and the later instalments can be in multiples of ₹500/-.
The maximum loan facility will be limited to 5 times of the RD’s maturity value or the amount as mentioned in the existing education loan guidelines, whichever is lower.
The customer can choose to use the matured RD amount as per his/ her convenience and for any purpose.
How to Apply for the loan:
The above mentioned IDBI Education loan schemes can be applied in an online process via Vidya Lakshmi Portal, which is a centralized portal specifically catering to students wanting to explore multiple options offered by various banks before choosing the appropriate loan scheme which is in tandem to the applicants’ needs.
The other method is by way of offline process wherein the applicant will have to visit the nearest branch and file for application of loan by filling out the required forms and submitting the copies of mandatory documents. In case the applicant does not own any savings account with IDBI, he/she will first have to open a savings account before availing the loan.