Union Bank of India Education Loan

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Introduction

United Bank of India or UBI is one of the most famous and large government banks in India. It is a public bank with its headquarters in Mumbai. Founded on 11 November in the year 1919, the ban has been successfully operating for more than 100 years. The bank was amalgamated with Andhra Bank and Corporation bank which has come into effect on 1st April 2020. After the amalgamation, there are currently almost 9500 branches all over the world. There are four overseas operations of the bank as well in Sydney, Dubai, Hong Kong, and Antwerp. There are also offices in Abu Dhabi, Shanghai, and Beijing. Almost 75000 employees are working in the different branches of the bank all over the world. It is currently the fourth largest bank in terms of the network of the branches.

Overview of Loan Schemes

The different education loan schemes provided by United Bank of India are as follows:

SCHEME NAME DETAILS
Education Loan The loan is aimed to provide financial support to students who are poor and are unable to take care of their basic education. Furthermore, this loan is also for those meritorious students who want to pursue higher education in any field after their 10+2. The loan is for students applying for both inland studies and abroad studies.
Credit Guarantee Fund Scheme for Educational Loans This is a scheme of central government that has been launched by the HRD Ministry for students who belong to the weaker section of the society and wish to pursue higher education. Students who will be able to fulfill the criteria of the scheme would be eligible for an interest subsidy on their education loans.
Padho Pardesh Scheme This loan scheme gives interest subsidy to students who wish to pursue higher education abroad but are a part of the minority community. The parameters associated with this scheme would have to be fulfilled by the student to be eligible for the scheme.
ACSISOBCEBC Scheme – Dr. Ambedkar Central Sector Scheme of Interest Subsidy on Educational Loan For Overseas Studies For Other Backward Classes (OBCs) & Economically Backward Classes (EBCs) The loan scheme provides subsidy on the interest of educational loans for students who belong to the other backward classes and economically backward classes and wish to opt for overseas education.
Special Schemes for ISB Students This scheme is only for those students who have secured an admission in the Indian School of Business in Hyderabad, Mumbai and Mohali for specific courses.
Special Scheme for IIMs, XLRI, MDI, SPJIMR, IITs, NITs, IISc, IMT and Thapar University Patiala This scheme is for students applying for regular courses in specific universities mentioned under this scheme.
Special Scheme for NIFT, SIBM, IIFT, SCHMRD, VIT, NID, BITs, FMS, NITIE etc This is a special scheme for students who want to apply for regular courses in the eligible universities mentioned under this scheme.

Education Loan

The education loan provided by the Union Bank of India is for the needy and the poor students who want to pursue basic education. It is also for the meritorious students who want to pursue higher education in different fields after completing their 10 + 2.

Eligibility:

  1. Citizen of India
  2. Admitted in a recognized institute in India or overseas after clearing the required selection process or examination.
  3. Courses in India: Graduation / Post Graduation / Diploma / Technical / Professional / Management / PhD Courses
  4. Courses Abroad: Graduation / Post Graduation / PhD / Certified Degree Courses by recognized institutes

Quantum of Loan:

  1. For studies in India the maximum quantum is Rs. 20 lakhs.
  2. For studies abroad the maximum quantum is Rs. 30 lakhs.

Margin:

  1. For up to 4 lakhs the margin is Nil.
  2. For above 4 lakhs the margin for Inland studies is 5% and for overseas studies is 15%.

Expenses Covered under Loan:

  1. Tuition fees of the school, college or university
  2. Admission fee
  3. Mess or hostel charges
  4. Examination, laboratory or library fee
  5. Computer or laptop if required for the course
  6. Student’s insurance premium
  7. School dress, books, instruments and equipments
  8. Travel for studies abroad
  9. Caution deposit or refundable deposit required by the institution
  10. Other expenses mandatory for course completion such as projects, study tours, thesis etc.

Moratorium Period: Course period + 1 year

Repayment Period: 15 years irrespective of the loan amount

Rate of Interest:

  1. Covered under CGFSEL – For loan amount up to 7.50 lakhs, the rate of interest is 9.20% for both male and female students.
  2. Not covered under CGFSEL – For loan amount up to 4 lakhs, the ROI for male student is 10.45% and female student is 9.95%. For loan amount between 4 lakhs and 7.50 lakhs the ROI for male student is 10.20% and female student is 9.70%. For loan amount above 7.50 lakhs the ROI for male student is 9.30% and female student is 8.80%.

Security:

  1. Up to 4 lakhs – If loan is covered under the CGFSEL, no security or guarantee is required by the bank.
  2. Above 4 lakhs and up to 7.50 lakhs – If loan is covered under the CGFSEL, no security or guarantee required. In case it is not, then third party guarantee required with collateral equaling the loan amount.
  3. Above 7.50 lakhs – Tangible security accepted as collateral which is equal to the minimum amount of the loan.

Insurance: Life insurance of the student provided

Scheme Details

  1. Credit Guarantee Fund Scheme for Educational Loans 

The CGFSEL is a central government scheme formulated by the HRD Ministry for providing interest subsidy to the students who want to follow their career path and pursue higher education but belong to a weaker economy of the society.

Eligibility: Students wanting to apply for this scheme should have been admitted to any course in a professional or technical field from a recognized university in the country after their 10+2 completion. Since this scheme is for students of the economically weaker sections (EWS), the annual gross income of the family must be lower than 4.50 lakhs.

Features: 

  1. The subsidy will be granted for an amount of 10 lakhs irrespective of the total loan amount.
  2. The student would have to submit a proof of their family income signed by an authority who is appointed by their state government.
  3. The subsidy is given in the moratorium and the course period only.
  4. The student would be eligible for the scheme only once, i.e., either their undergraduate r their postgraduate course in India.
  5. Padho Pradesh Scheme

The scheme aims to provide interest subsidy to students of the minority comminutes who plan to pursue their education overseas.

Eligibility: Students who were able to secure their admission to Master, M. Phil or Ph. D courses abroad are only eligible for this scheme. Moreover, students whose annual gross income of the family do not exceed 6 lakhs and hence are a part of the economically weaker section of the minority category are granted this scheme.

Features: 

  1. An income certificate to be submitted to the bank duly signed by an authorized person appointed by the state.
  2. Scheme available only for the course period and the moratorium period.
  3. The scheme is only eligible for students wanting to study abroad.
  4. The students applying for the scheme will not be eligible for the interest subsidy if they give up the citizenship of India during the loan tenure.
  5. Dr. Ambedkar Central Sector Scheme of Interest Subsidy on Educational Loan For Overseas Studies For Other Backward Classes (OBCs) & Economically Backward Classes (EBCs) (ACSISOBCEBC Scheme) 

The scheme grants an interest subsidy in the educational loans of students who aim for overseas studies and belong to the other backward classes (OBCs) and the economically backward classes (EBCs).

Eligibility: Students applying for higher study levels only such as Masters, M. Phil, and Ph. D overseas are granted this scheme. Students belonging to the economically backward classes (EBC) and other backward classes (OBC) whose annual gross income of the family does not exceed 1 lakh and 3 lakhs respectively.

Features:

  1. Students applying for this scheme would have to submit a proof of income or a Form-16/ITR/certificate which is issued by an authority appointed by the state.
  2. The subsidy will be granted on the interest that is charged on the loan whose amount is disbursed in a financial year.
  3. The scheme is applicable only for overseas higher education.
  4. The scheme is only for the moratorium and the course period.

Special Schemes

  1. ISB Students

This scheme is only for those students who have secured an admission in the Indian School of Business in Hyderabad, Mumbai and Mohali for specific courses.

Eligible Courses:

  1. Post Graduate Programme in Management (PGPM)
  2. Post Graduate Programme in Management for Working Professionals (PGP-PRO)
  3. Post Graduate Programme in Management for Senior Executives (PGP –MAX)

Quantum of Loan:

  1. PGPM – 40 Lakhs
  2. PGP-PRO – 31.11 Lakhs
  3. PGP-MAX – 38.62 Lakhs

Margin:

  1. PGPM – Nil
  2. PGP-PRO – 15%
  3. PGP-MAX – 15%

Processing Fee:

  1. PGPM – Rs. 36 lakhs + 4 lakhs for student exchange program
  2. PGP-PRO – 15% margin on the total fee of Rs. 36.60 lakhs
  3. PGP-MAX – 15% margin on the total fee of Rs. 45.44 lakhs

Rate of Interest:

  1. PGPM – 1 Year MCLR (floating)
  2. PGP-PRO – 1 year MCLR + 0.20% (floating)
  3. PGP-MAX – 1 year MCLR + 0.20% (floating)

Security:

No third party guarantee or collateral required for any of the courses.

Moratorium Period:

  1. PGPM – Course period (12 months) + 1 year
  2. PGP-PRO – Course period (16 months)
  3. PGP-MAX – Course period (15 months)

Repayment Period:

  1. PGPM – 180 months
  2. PGP-PRO – 180 months or up to the age of 60 years of the borrower whichever is earliest
  3. PGP-MAX – 180 months or up to the age of 60 years of the borrower whichever is earliest
  4. Special Scheme for IIMs, XLRI, MDI, SPJIMR, IITs, NITs, IISc, IMT and Thapar University Patiala

Eligible Courses: Regular courses for selected universities

Quantum of Loan: maximum 30 lakhs

Margin: Nil

Processing Fee: Nil

Rate of Interest: 1 year MCLR (floating) i.e., 8.20%

Security: No collateral required

Moratorium Period: Course period + 1 year

Repayment Period: 180 months

  1. Special Scheme for NIFT, SIBM, IIFT, SCHMRD, VIT, NID, BITs, FMS, NITIE etc

Eligible Courses: Regular courses for selected institutions

Quantum of Loan: 12 lakhs

Margin:

  1. Up to 4 lakhs – Nil
  2. Above 4 lakhs and up to 12 lakhs – 5%

Processing Fee: Nil

Rate of Interest:

  1. Male Students – 1 year MCLR + 1.65% (floating)
  2. Female Students – 1 year MCLR + 1.15% (floating)

Security:

  1. Up to 4 lakhs – No security
  2. 4 lakhs to 7.5 lakhs – Third party guarantee
  3. 7.5 lakhs to 12 lakhs – Tangible security of minimum value equal to the loan amount

Moratorium Period: Course Period + 1 year

Repayment Period: 180 months

Loan without Collateral

  1. Education Loan – Up to the amount of Rs. 7.50 lakhs if covered under CGFSEL
  2. Special Scheme for ISB Students
  3. Special Scheme for IIMs, XLRI, MDI, SPJIMR, IITs, NITs, IISc, IMT and Thapar University Patiala
  4. Special Scheme for NIFT, SIBM, IIFT, SCHMRD, VIT, NID, BITs, FMS, NITIE etc. – Up to loan amount of 4 lakhs no security required

Application Process for Education Loan

The education loan provided by the Union Bank of India can be availed through the following process –

  1. Application of the loan by submitting all the necessary documents as required by the bank. The application can be done offline by visiting the bank or online from the education loan portal Vidya Lakshmi.
  2. The loan will then be sanctioned by the bank after a thorough scrutiny of all the provided documents and also the necessary criteria for each scheme.
  3. The final stage involves the disbursement of the loan amount.

Documents Required For Application

  1. KYC Documents –
  2. Photo identity proof of student, co-borrower and guarantor
  3. Resident proof of student, co-borrower and guarantor
  4. Passport size photo of student, co-borrower and guarantor – 2 each
  5. PAN card of student, co-borrower and guarantor
  6. Income proof of student, co-borrower and guarantor
  7. Academic Documents –
  8. Admission letter
  9. Certificate and mark sheet of completed examinations
  10. Expense schedule of the course
  11. Confirmation letter from the institution
  12. Security Documents –
  13. Valuation certificate
  14. Guarantee documents
  15. Others –
  16. Credit information of the student, co-borrower and guarantor
  17. Caste certificate if required

Education Loan Details

Details Study in India Study Abroad
Rate of Interest
  1. Covered under CGFSEL – For loan amount up to 7.50 lakhs, the rate of interest is 9.20% for both male and female students.
  2. Not covered under CGFSEL – For loan amount up to 4 lakhs, the ROI for male student is 10.45% and female student is 9.95%. For loan amount between 4 lakhs and 7.50 lakhs the ROI for male student is 10.20% and female student is 9.70%. For loan amount above 7.50 lakhs the ROI for male student is 9.30% and female student is 8.80%.

 

Max loan amount Rs. 20 Lakhs Rs. 30 Lakhs
Margin Amount based on loan amount
  1. Up to 4 Lakhs – NIL
  2. Above 4 Lakhs – 5 %
  1. Up to 4 Lakhs – NIL
  2. Above 4 Lakhs – 15 %
Processing fee No processing fee
Collateral / Loan security needed depending on loan amount
  1. Up to 4 lakhs – If loan is covered under the CGFSEL, no security or guarantee required.
  2. Above 4 lakhs and up to 7.50 lakhs – If loan is covered under the CGFSEL, no security or guarantee required. In case it is not, then third party guarantee required with collateral equaling the loan amount.
  3. Above 7.50 lakhs – Tangible security accepted as collateral which is equal to the minimum amount of the loan.
Moratorium period Course Period + 1 Year
Loan repayment/tenure period (with and without collateral) 15 years irrespective of the loan amount
Insurance Coverage Life insurance

Rate of Interest

The Rate of Interest charged by the Union Bank of India ranges from 7.30% to 10.45% depending on the schemes and the quantum of the loan.

Education Loan Eligibility Criteria

For all loan schemes the basic eligibility criteria for application is as follows:

  1. The student has to be a citizen of India.
  2. The student should have completed their 10+2 from a recognized board in India.
  3. The student should have been selected for the course in the university which is eligible for each loan scheme.

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