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Central Bank of India Education Loan

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Central Bank of India Education Loans

What Is an Education Loan?

An Education loan is the loan or funds acquired by an individual to pursue higher studies in India or abroad. The loan repayment commences for the student after completing the education and a period of 6 months is given as grace period to students to get or join a job.

The repayment amount will be determined by your choice of interest, you need to decide how you want to repay the loan. That is if you want to start paying during the time of moratorium period itself or after the moratorium period. The Moratorium period is the time of your education plus 6 months or 1 year given to get a job. It is only after this time that you are expected to pay the loan.

The loan interest starts to accrue at the time of dispersal of funds, so at the time of your graduation you have a huge amount to repay. The other option is your parents or guardian can start paying the loan during the moratorium period itself where it is calculated as a simple interest.

This way your loan amount at the time of graduation is drastically reduced.

There are 4 types of education loans in India

1. Under Graduate education loan - These are given to students who have completed their secondary education and looking to do higher studies in the form of under graduation. It can be done in India or abroad.

2. Post graduate education loan - These are education loans given to individuals who want to pursue post-graduation after completing under graduation course from a reputed university/college. Here also the loan can be for studying in India or abroad.

3. Parents availing education loan - This is the case where the parents take loan for the education purposes of their children. This is an unsecured loan and need not be for graduate or post-graduation courses but also for elementary and higher secondary courses.

4. Career growth education loans - These are loans provided to young people who want to pursue courses or trainings, certifications that will benefit their career growth.

About Central Bank of India

Central Bank of India Bank Limited is one of the oldest and largest commercial banks in India. The bank has 4730 branches, 5319 ATM's and 4 extension counters across 27 Indian states and three Union Territories. It provides a wide range of banking products and financial services to corporate and retail customers.

An Introduction to Central Bank of India Education Loans

Education is one area where everybody is willing to spend a lot of money to live a prosperous life in the future. Being one of the major education loan providers, Central Bank of India understands the needs of the students and offers extremely competitive education loans at better interest rates. Every year, a large number of students secure admissions in top universities and colleges in India and abroad with Central Bank of India education loans.

Advantages of Central Bank of India Education Loan

Following are some of the advantages of applying for an educational loan with Central Bank of India.

  • Low interest rate
  • Less paperwork
  • No processing fees
  • Faster Disbursal
  • No prepayment charges

Key Highlights of Central Bank of India Education Loan

Eligibility CriteriaStudents who have secured the admission
Loan TenureUp to 15 years
Loan AmountUp to 20 Lakhs
Interest RateMCLR + 2.00%
Processing FeesNil

Features of Central Bank of India Cent Vidyarti

Objective: To provide term loan to Indian students for pursuing higher education in India and foreign universities

Quantum of Loan:Up to 10 Lakhs for studies in India and up to 20 Lakhs for studies overseas

Margin: No margin required for loans up to INR 4 Lakhs, 5% of margin for loans above INR 4 Lakhs for studies in India and 15% of margin for above 4 Lakhs for studies overseas

Repayment Period: The tenure is up to 10 years after completing the course for loans up to 7.5 Lakhs and 15 years for above 7.5 Lakhs. The moratorium period is 12 months after completing the course and 6 months after getting a job.

Security: The parents or the guardian will be the co-applicant or the loan and the primary debtor. Tangible collateral will be accepted as security by the bank with the third-party guarantee. No security required for loans up to 4 Lakhs.

Processing Fees: There are no processing fees for studies in India and INR 500 for studies abroad for loans up to 10 Lakhs and INR 1000 for loans above that limit.

Expenses Covered

  • Fee payable to college/ school/ hostel
  • Examination/ Library/ Laboratory fee
  • Travel expenses/ passage money for studies abroad
  • Insurance premium for student borrower, if applicable
  • Caution deposit, building fund/refundable deposit supported by Institution bills/receipts.
  • Purchase of books/ equipment's/ instruments/ uniforms
  • Purchase of computer at reasonable cost, if required for completion of the course
  • Any other expense required to complete the course - like study tours, project work, thesis, etc.
  • While computing loan required, scholarships, fee waiver etc., if any available to the student borrower may be considered

Eligibility Criteria: Who Can Apply?

  • Must be an Indian Resident
  • Applicant should have secured admission with the educational institution

Interest Rate

The rate of interest for male students = MCLR + 2.00%

For female/SC/ST/IIT students = MCLR + 1.50%

1% of concession is provided if the interest is paying during study or moratorium period.

Features of Central Bank of India Education Loan for Financing Executive MBA

Objective: To provide term loan to Indian students for pursuing higher education in business administration

Quantum of Loan:Up to 20 Lakhs for higher amount collateral is required

Margin: No margin required

Repayment Period: The tenure is up to 8 years after completing the course for loans up to 7.5 Lakhs and 12 years for above 7.5 Lakhs. The moratorium period is 3 months after completing the course.

Security: No security required for loans up to 4 Lakhs, however parents/guardian to be co-borrower. For loans between 4 Lakhs to 7.5 Lakhs, suitable collateral is accepted with the third-party guarantee. Tangible collateral will be accepted as security by the bank with the third-party guarantee for loans above 7.5 Lakhs.

Processing Fees: Nil

Eligibility Criteria: Who Can Apply?

  • Must be an Indian Resident
  • Should be minimum of 23 years old
  • Applicant should have secured admission with the educational institution

Interest Rate

The interest rate for male students is MCLR + 0.50%.

For Female/SC/ST/Minority community students, the interest rate is MCLR.

Features of Central Bank of India Education Loan for Vocational Education and Training

Objective:To provide term loan to Indian students for pursuing vocational courses

Quantum of Loan: Minimum of INR 50,000 and Maximum of INR 1,50,000

Margin: 5% of margin.

Repayment Period: For loans of INR 50,000 – 3 years, for loans between INR 50,000 and 1 Lakh – 5 years and above 1 Lakh – 7 years.

Security: No security required, however, the loan is covered under credit guarantee scheme of NCGTC.

Processing Fees: There are no processing fees for availing Central Bank of India education loan.

Courses Covered

The courses covered under Central Bank of India education loan are Development Courses of duration from 2 months to 3 years preferably leading to a Certificate /Diploma/Degree, etc. issued by a Government Organization or an Organization recognized/authorized by the Government to do so.

Expenses Covered

Expenses covered under Central Bank of India education loan are payment of course fees, purchase of books, equipments, instruments, uniform, payment of hostel fees, examination fees, study tools etc.

Eligibility Criteria: Who Can Apply?

  • Must be an Indian Resident
  • Applicant should have secured admission with the educational institution

Interest Rate

The interest rate is MCLR + 1.50%

Documents Required

  • Letter of admission
  • Filled in Loan Application Form
  • 2 passport size photographs
  • Statement of cost of study
  • PAN Card of the student and Parent/ Guardian
  • AADHAR Card of the student and Parent/ Guardian
  • Proof of identity (Driving Licence/Passport/Aadhar/ any photo identity)
  • Proof of residence (Driving Licence/Passport/Electricity bill/Telephone bill)
  • Student/Co-borrower/ guarantor's bank account statement for last 6 months
  • IT return/ IT assessment order, of previous 2 years of Parent/ Guardian/ other co-borrower (if IT Payee)
  • Brief statement of assets & liabilities of Parent/ Guardian/ other co-borrower
  • Proof of income (i.e. salary slips/ Form 16) Parent/ Guardian/ other co-borrower

EMI Payment Methods

Central Bank of India education loan can be repaid in following three ways.

Standing Instruction (SI): If you are an existing account holder with Central Bank of India, Standing Instruction is the best mode of repayment. Your EMI amount will be debited automatically at the end of the monthly cycle from the Central Bank of India account you specify.

Electronic Clearing Service (ECS): This mode can be used if you have a non-Central Bank of India account and would like your EMIs to be debited automatically at the end of the monthly cycle from this account.

Post-Dated Cheques (PDCs): You can submit post-dated EMI cheques from a non-Central Bank of India account at your nearest Central Bank of India Loan Centre. A fresh set of PDCs will have to be submitted in a timely manner. Please note Post Dated Cheques will be collected non-ECS locations only.

It is recommended that you opt for either the SI or ECS mode of payment for faster and less prone to error than the use of PDCs.

How to Apply for Central Bank of India Education Loan?

You can either apply online or visit a nearby Central Bank of India branch for the application. You can also download the education loan application form from the Central Bank of India official website, complete the form and submit it the bank representative.

You can also check your eligibility for an education loan through CreditMantri and apply for it.

Central Bank of India Education loan FAQ

1. What is the interest charged during moratorium period?

Only simple interest will be charged during the moratorium period. After the moratorium period the actual interest mentioned will be charged.

2. Can I take an education loan without a co-borrower?

No, a co-borrower is needed to take an education loan. The loan will be taken as a joint loan in collaboration with your parent/ guardian or spouse.

3. I am planning to study abroad. Am I eligible to apply for an Education Loan?

Yes, Central Bank of India offers up to INR 20 Lakhs for courses pursued abroad which also includes travel expenses and study tours. Higher amount can be obtained based on eligibility and creditworthiness.

4. Is there a processing fee for an education loan with Central Bank of India?

No, there are no processing fees for studies in India, however for studies abroad, the fee will be up to INR 1000.

5. Is there a way I can reduce the interest paid?

There is special subsidy provided according to Central Government subsidy for education loans. Central Bank of India also provides special interest rates for some premier institutions. The other option is your parent/ guardian or spouse can pay the loan amount during the moratorium period due to which the loan amount you need to repay is less.

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