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Karnataka Bank Education Loan

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Karnataka Bank 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 Karnataka Bank

The Karnataka Bank Limited is one of the largest bank in India, based in the coastal city of Mangaluru in Karnataka, India. The bank currently has a network of 776 branches, 1393 ATM's and 123 e-lobbies/mini e-lobbies across 22 states and 2 Union territories. It has over 8000 employees and 8.2 million customers throughout the country. Its shares are entirely privately owned by over 1,46,000 shareholders

An Introduction to Karnataka Bank 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, Karnataka Bank 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 Karnataka Bank education loans.

Advantages of Karnataka Bank Education Loan

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

  • 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 Karnataka Bank (KBL Vidyanidhi) 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:

  • In India - a maximum of Rs.10 lakh
  • Abroad - a maximum of Rs.20 lakh

Margin:

  • Up to Rs.4 lakh: No margin required.
  • Above Rs.4 lakh:
  • 5% for studies in India.

    15% for studies abroad. Scholarship / Assistantship may be reckoned as part of margin. Margin may be brought in on year-to-year basis as and when disbursements are made, on a pro-rata basis.

Security:

For loans up to Rs.4.00 Lakhs:

  • Up to Rs.7.5 lakh(covered under CGFSEL): No security
  • Above Rs.4 lakh and upto Rs.7.50 lakh: Collateral in the form of a suitable third party guarantee.
  • Above Rs.7.50 lakh: Collateral security of suitable value /suitable third party guarantee along with the assignment of future income of the student for payment of installments.

Repayment Period:

  • Repayment of the loan (after study period and subsequent moratorium period) will be in equated monthly installments for period up to 15 years.
  • The completion of the course includes internship or apprenticeship if compulsory for award of Degree.
  • If the student does not complete the course within the scheduled period, a maximum period of 2 years is permitted for completion.
  • If the student is unable to complete the course for reasons beyond his control then extension may be granted if deemed necessary to complete the course.
  • The accrued interest during the repayment holiday will be added to the principal and repayment in equated monthly installments (EMI) shall be fixed

Courses Covered

Studies in India:

  • Graduate Courses: B.A., B.Sc., B.Com, B.C.A., B.B.M., and Diploma in Engineering.
  • Post Graduate Courses: Masters and Ph.D.
  • Professional Courses: Engineering, Medical, Agriculture, Nursing, Veterinary, Law, Dental, Management, Computer, Pharmacy, Physiotherapy, Hotel Management, ICWA, CA, CFA.
  • Courses conducted by IIM, IIT, XLRI, NIFT
  • Courses offered in India by reputed foreign universities; Evening Courses of approved Institutes.
  • Other Courses leading to Diploma / Degree conducted by Colleges / Universities approved by UGC / GOVT. / AICTE /AIBMS / ICMR; Courses offered by National Institutes and other reputed private Institutions.

Studies abroad:

  • Graduation: Only for job oriented professional / technical courses offered by the reputed Universities
  • Post Graduation: MCA, MBA, MS; Courses conducted by CIMA-London, CPA in USA etc.

Expenses Covered

In India:

  • Tuition Fees, Hostel Fees and Boarding and Lodging Fees if resident outside Hostel; Examination / Laboratory and Library Fees; Purchase of Books / Study material / Equipment and Uniforms; Caution Deposit / Building Fund / Refundable Deposits (supported by Receipts issued by the Institution); Travel expenses / passage money .

For study abroad:

Purchase of Computer if certified as essential for completion of course.

other expenses like Project Work, Study Tour and Thesis, which are necessary for completion of course

For General up to Rs.7.50 lakh

Normal10.75
Meritorious10.75
Girl Student10.70
Girl Meritorious10.70

For General above Rs.7.50 lakh

Normal12.95
Meritorious12.45
Girl Student12.45
Girl Meritorious11.95

For Vocational Courses/Skill Development loans

Normal10.65
Meritorious10.65
Girl Student10.60
Girl Meritorious10.60

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

Karnataka Bank education loan can be repaid in following three ways.

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

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

You can either apply online or visit a nearby Karnataka Bank branch for the application. You can also download the education loan application form from the Karnataka Bank 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.

Karnataka Bank 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 Karnataka Bank?

Yes, the interest rate ranges from 10.60 % - 13.00%. However, 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, Karnataka Bank 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 Karnataka Bank?

There are no processing fees for an education loan with Karnataka Bank

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

There is special subsidy provided according to Central Government subsidy for education loans. Karnataka Bank 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

4 / 5 (6 Reviews)
9 Dec 2018

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