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City Union Bank Education Loan

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City Union Bank (CUB) Education Loan

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 City Union Bank (CUB)

Headquartered in Kumbakonam in Tamil Nadu, City Union Bank is Indian public-sector bank, offering a wide range of financial services to its customers. With the network of 557 branches and over 1530 ATMs, City Union Bank offers many loan products catering to the financial needs of individual customers to large industries.

An Introduction to City Union Bank(CUB) Vidhyavani 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, City Union Bank (CUB) understands the needs of the students and offers extremely competitive education loans at better interest rates. Every year, many students secure admissions in top universities and colleges in India and abroad with City Union Bank (CUB) education loans.

Advantages of City Union Bank (CUB) Education Loan

Following are some of the advantages of applying for an educational loan with City Union Bank (CUB).

  • Low interest rate
  • No hidden costs and administrative charges
  • Less paperwork
  • No processing fees
  • No security required for up to 4 Lakhs
  • 0.50% concession for girl students

Features of City Union Bank (CUB) Student Loan Scheme

Objective: To provide term loan to Indian students for pursuing higher education in India and abroad where admission has been secured

Quantum of Loan:For studies in India, up to INR 10 Lakhs and for studies in abroad INR 20 Lakhs

Margin:

Up to 4 Lakhs – Nil

bove Rs. 4.00 Lakhs - Studies in India - 5 % and Studies abroad – 15 %

Scholarship / Assistantship to be included in Margin.

Margin may be brought in on a year to year basis as and when disbursements are made on a pro-rata basis.

Security

Up to Rs.4.00 Lakhs:

Parents / Guardian should join the execution of documents.

Security need not be insisted upon Above 4.00 Lakhs and up to Rs.7.50 Lakhs,

Above Rs.4.00 Lakhs and Up to Rs.7.50 Lakhs:

Co-obligation of parents / guardian together with collateral security in the form of suitable third-party guarantee. If we are satisfied about the net worth of the parents/means of parents /guardian, we may waive the condition of obtaining third party guarantee.

However, if the party offers security of immovable property and or guarantee from third party on a voluntary basis, it may be accepted for the loans up to Rs.7.50 Lakhs

Above Rs.7.50 Lakhs

  • Third party guarantee and immovable security equal to 100% of the loan amount.
  • Assignment of future income of the student for payment of instalments
  • The document should be executed by both the student / and the parent / guardian.
  • The security can be in the form of land / building / Govt. securities / Public Sector Bonds / NSCs / KVPs / LIC Policies, Gold, shares / MF units / debentures, bank deposits in the name of the student/parent/guardian or any other third party. If land/bldg. is already mortgaged, the unencumbered portion can be taken as security on second charge basis, provided it covers the loan amount. In case of married person, obligator can be either spouse or parent / parent-in-law
  • In case the loan is given for purchase of computers, the same is to be hypothecated to the bank.

Repayment Period:

The student/parents have the option to repay the interest during the holiday period.

If the student / parent does not opt for the same, the principal o/s together with interest

payable should be clubbed and should be repaid in EMIs.

The EMI amount should be fixed at the time of commencement of repayment

The loan to be repaid in 5 – 7 years after commencement.

Holiday Period: Course period + 1 year (or) 6 months after getting job whichever is earlier.

Processing Fees:

No processing fees / upfront charges may be collected for studies in India. For studies abroad, processing fee @ 0.20% should be collected

Capability Certificate

The bank can also issue the Capability Certificate for students going abroad for higher studies after obtaining the relevant supporting documents from the applicant.

Other Conditions

  • In case student/parents approach for educational loan after having completed one/two semesters/years, such loans based on future expenses can be considered, provided the student has cleared all the papers in the previous exams.
  • If any of the loans of the borrower/co-borrower/ guarantor is in default, no loan will be entertained under this scheme till account/s become regular.
  • Life of student should be insured for the loan value
  • Life insurance policy should be assigned in favor of the bank.
  • No Due certificate need not be insisted upon as a precondition for considering educational loan. However, branches may obtain a declaration / an affidavit confirming that no loans are availed from other banks.
  • Loan applications must be disposed of within a period of 15 days to one month

General

  • If the fees have already been paid to the college because urgency/payment before the stipulated date by borrowing from the friends/relatives/outsiders/institutions by availing loans, the bank may consider the loan under the scheme for payment of such dues provided sufficient material proof is provided for payment of such fees and avail of loans from friends/relatives/outsiders. In such case, the payment should be made direct to the persons from whom borrowed, and receipts should be obtained and kept on record.
  • If the college/institution indicates arrears of fees for the previous year (not yet paid by the student) it may also be considered for finance.
  • If the student has paid fees for certain semester/s and seeks loan for subsequent semesters, the fees paid for earlier semester may be taken as margin and full (100%) fees may be advanced for subsequent semester/ years, provided original receipts for earlier years are provided to the bank for verification and Xerox copies thereof must be obtained for our records.

Courses Covered

Eligible Courses of Study in India

Graduation courses – B.Sc., B. A, B. Com etc.

Post-graduation courses- Masters & Ph.D.

  • Professional courses – Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc.
  • Computer certificate courses of reputed institutes accredited to Dept. of electronics or Institutes affiliated to University
  • Courses like ICWA, CA, CFA etc.
  • Courses conducted by IIM, IIT, IISc, XLRI, NIFT etc.
  • Regular degree/diploma courses like aeronautical, pilot training, shipping etc. approved by Director general of Civil Aviation / shipping, if the course is pursued in India. In case the course is pursued abroad, the institute should be recognized by the competent local aviation/shipping authority
  • Courses offered in India by reputed foreign universities
  • Evening courses of approved institutes
  • Other courses leading to diploma / degree etc., conducted by colleges / universities approved by UGC / Govt. / AICTE / AIBMS / ICMR etc.

Eligible Courses of Studies abroad:

  • Graduation: For job oriented professional / technical courses offered by reputed universities
  • Post-Graduation - MCA, MBA, MS, PhD etc.
  • Courses conducted by CIMA-London, CPA in USA etc.

Student Eligibility

  • Should be an Indian Resident.
  • Secured admission to Professional/Technical courses through Entrance Test/Selection
  • Process and should produce proof.
  • Secured admission to Foreign University / Institutions and should produce proof.
  • No specific age restriction about age of the student to be eligible for educational loan

Expenses Covered

  • For payment of College / School/ Hostel Fees.
  • For payment of Examination / Library / Laboratory Fees.
  • For purchase of books/equipment/instruments.
  • For payment of Caution Deposits (caution deposit not to exceed 10% of total tuition fees for the entire course)
  • For making Travel Expenses / Passage Money for studies abroad.
  • For purchasing inputs essential for completion of the course.
  • Any other expenses required to complete the course like study tours, project work, thesis, etc.
  • For purchase of computer / laptop of uniforms
  • Insurance premium for student borrower

Rate of Interest

CUB Vidhyavani (Management)

Up to Rs.4.00 LakhsFor BoysBR plus 5.25 (15.00)
For GirlsBR plus 4.75 (14.50)
Above Rs.4.00 LakhsFor BoysBR plus 6.25 (16.00)
For GirlsBR plus 5.75 (15.50)

CUB Vidhyavani (Meritorious)

Up to Rs.4.00 LakhsFor BoysBR plus 4.75 (14.50)
For GirlsBR plus 4.25 (14.00)
Above Rs.4.00 LakhsFor BoysBR plus 5.75 (15.50)
For GirlsBR plus 5.25 (15.00)

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

City Union Bank (CUB) education loan can be repaid in following three ways.

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

Electronic Clearing Service (ECS): This mode can be used if you have a non-City Union Bank (CUB) 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-City Union Bank (CUB) account at your nearest City Union Bank (CUB) 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 City Union Bank (CUB) Education Loan?

You can either apply online or visit a nearby City Union Bank (CUB) branch for the application. You can also download the education loan application form from the City Union Bank (CUB) 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.

City Union Bank (CUB) 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. Is there a range on the rate of interest charged on Education Loan offered by City Union Bank (CUB)?

Yes, the interest rate ranges from 14.00 % - 16.00%. However, the it is subject to change at the sole discretion of the bank.

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

Yes, City Union Bank (CUB) offers up to INR 20 Lakhs for courses pursued abroad which also includes travel expenses and study tours.

5. Is there a processing fee for an education loan with City Union Bank (CUB)?

There are no processing fees for an education loan with City Union Bank (CUB)

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

There is special subsidy provided according to Central Government subsidy for education loans. City Union Bank (CUB) 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.

Customer Reviews

5 / 5 (2 Reviews)
10 May 2019

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