Punjab And Sind Bank Education Loan
Punjab and Sind Bank, shortly known as PSB, was established in the year 1908 with its headquarters in Delhi. The guiding principle followed by the bank since its inception has always been about the upliftment of the poor, weaker and backward sections of the society by enabling them to foray into economic activities. It is a government owned public sector bank actively conducting business across the country with around 1560 branches out of which approximately 620 branches are in Punjab state. The bank is run by its almost 10,300 strong manpower.
Overview of variants in education loan schemes offered by PSB
|PSB Education Loan
- Loan facility for Indian national students who have secured admission to higher education in India or abroad.
|PSB Excellence – Education Loan
- Loan facility for students wanting to pursue higher education and have secured admission to IITs, IIMs, and ISB Hyderabad.
|PSB Skill Education Loan
- Loan scheme to provide financial support for students wanting to pursue skill development courses from either Industrial Training Institutes 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.
Further details under each scheme mentioned in above table
1. PSB Education Loan
The said loan scheme is for Indian national students wanting to pursue higher education in India or abroad and admission has been secured for the same.
Courses that the loan scheme covers in India are:
- Any regular graduation or post-graduation courses recognized by academic bodies such as UGC / AICTE / AIBMS / State and Central Government.
- CA/ CWA/ CS
- Engineering graduate degree or PG in Engineering from recognized institutes such as IITs. NITs, Government run technical colleges and universities etc.
- Courses offered in Indian colleges / institutes by foreign universities which includes evening / weekend courses (based on the employability of the course)
- MBA /PGDM / PGPM / PGPX from ISB Hyderabad, IIMs, IITs, IIFT, XLRI etc
- Special courses or diploma in pilot training, aeronautical sciences, maritime studies etc.
- Professional courses – Medical, Law, Hotel Management, Dentistry, Veterinary, Agriculture, etc.
Courses that the loan scheme covers abroad:
- Job oriented/ professional/ technical/ graduation or PG degree/ MCA/ MBA/ MS offered by reputed institutes
- Courses offered by CIMA, UK and CPA / CFA of USA
Note – Certificate and other diploma courses that are not considered as PG, are not included in the list of eligible courses in PSB Education loan scheme.
The maximum quantum of loan for studies in India is up to ₹10 lacs and for studies in abroad the amount is up to ₹20 lacs. However, loan amount greater than these said figures are also available subject to the type of courses and institutes.
No margin is applicable for any loan amount of up to ₹4 lacs and an amount above ₹4 lacs will attract a margin of 5% for studies in India and 15% for studies in abroad. Scholarship amounts can be considered for margin as well.
For any loan amount up to ₹7.50 lacs, no collateral security is required while parent(s) / guardian will be required to sign up as co-borrower and third-party guarantee will be required to sign up for loan amount between ₹4 lacs and ₹7.50 lacs. Any amount more than ₹7.50 lacs will require collateral and tangible security equivalent to the loan availed.
No processing fee / upfront charges is applicable under the scheme. However, for loans towards studies abroad, the applicant must deposit ₹2,000/- in their savings account as part of processing fee till the time the loan application process is completed and availed by applicant.
Almost all expenses of the course (including study tours, hostels, library, laboratory, equipment, books, project work, examination, caution deposit, purchase of computer / laptop, etc.) are covered under the scheme.
The rate of interest for the scheme is described below:
(EBLR – External Benchmark Linked Lending Rate)
The repayment period of the loan is up to a maximum of 15 years post the completion of moratorium period which covers the entire course duration and an additional 1 year.
The repayment period may be extended to any existing account holders / borrowers whose accounts are classified under the ‘standard’ category and have a credible repaying history and ability.
2. PSB Excellence – Education Loan
The loan facility is available to students who have secured admission to full time degree, post graduate degree / diploma course of IITs, IIMs, and ISB Hyderabad.
The quantum of finance is up to a maximum of ₹20 lacs. No margin is applicable for loans up to ₹4 lacs. A margin rate of 5% is applicable for loans above ₹4 lacs, while a margin of 15% is applicable for loans above ₹10 lacs.
Almost all expenses of the course (including study tours, hostels, library, laboratory, equipment, books, project work, examination, caution deposit, purchase of computer / laptop, personal monthly expenses of up to ₹5,000/- etc.) are covered under the scheme.
Under the scheme, no collateral security is applicable, however, the co-obligation of parents as co-borrowers is a mandatory requirement. It is also to be noted that no processing fee is applicable as per this scheme.
Rate of Interest is described below –
(EBLR – External Benchmark Linked Lending Rate)
The repayment period is up to a maximum of 10 years post the completion of moratorium period which covers the entire course duration and an additional 1 year.
3. PSB Skill Education Loan
To avail the loan scheme, 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 quantum of loan 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. No margin nor processing fee is applicable under this scheme as it is a government promoted loan facility.
The Rate of interest is described as follows –
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
Documents Required for the above loan schemes
The self-attested copies of following documents will have to be submitted along with the loan application:
- SSC, HSC marksheets; Graduation marksheets (for students wanting to pursue PG or further education)
- Entrance exam scorecard sheet (CAT / GMAT / XAT / GRE / NEET / JEE etc.)
- Admission proof (admission letter)
- Fee schedule / structure from the institute for the entire course
- Scholarship certificates (if any, for margin purposes)
- Gap certificate (if any – self declaration by applicant regarding gap in studies)
- Passport size photographs of applicant (student), co-borrower (parent), third party guarantor (if any)
- Bank account statements for the 6 months of Parent / Co-borrower/ guarantor
- In case of salaried persons –
- Latest salary slips
- Copy of Form 16 / recently filed Income Tax Return
- In case of non-salaried persons –
- Address proof of business (if applicable)
- Copy of latest Income Tax Returns
- Documents relating to collateral and tangible security (if applicable)
- PAN (Permanent Account Number) Card Copy for identity proof of applicant/ Co-borrower (parent)/ Guarantor (self-attested)
- Aadhar (UID) Card copy of student /co-borrower (parent)/guarantor for address proof (self-attested)
- Passport Copy (mandatory for loan availed towards studies abroad)
- Voter’s ID card issued by Election Commission of India
- Job card issued by NREGA and duly verified by a gazetted officer of government (in the case of Skill Loan Scheme)
How to Apply for the loan
Online process – The above-mentioned PSB’s Education loan schemes can be applied via online from 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.
One can also apply for the loan facility via their website and track for approval. Once the preliminary application is approved, one will need to take printouts of the application form and along with the aforementioned documents’ copies, must visit the nearest branch to complete the entire loan process.
Application link – https://www.psbindia.com/module/retail-loan-application
PSB has not included insurance cover in the standard procedures of education loan application as of now, but they may as well make it mandatory in the near future.
Few reasons for inclusion of insurance cover by banks these days are –
- Covering of default risk rising due to poor job markets
- Exchange rate risks in the case of overseas education loans
- Below satisfactory campus placement records
- Possibility of discontinuation of course by student or debarring by institutions on disciplinary or academic grounds.
Note – At the time of enquiring about these Education Loan schemes, kindly confirm with the bank officials regarding the opening of savings bank account for loan disbursement.