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Saraswat Bank Education Loan

Saraswat Bank Education Loan


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Saraswat 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 Saraswat Bank

Saraswat Bank is an urban co-operative banking institution based in Maharashtra, India and operating as a co-operative bank since 1918. Presently the bank has a correspondent relationship in 45 countries covering nine currencies with over 125 banks. The bank has a network of 282 fully computerized branches covering six states viz. Maharashtra, Gujarat, Madhya Pradesh, Karnataka, Goa and Delhi.

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

Advantages of Saraswat Bank Education Loan

Following are some of the advantages of applying for an educational loan with Saraswat 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 Saraswat Bank Student Loan Scheme

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

Who can apply

  • Individual who has secured admission in any of the graduate/post- graduate courses offered by College/Institute/University approved by IBA.
  • Student should be applicant and parent or relative should be co-applicant. 

Quantum of Loan:

  • Studies in India – Maximum up to Rs.10 Lakh and Maximum up to 30.00 Lakh for selected courses.
  • Studies Abroad – Maximum up to Rs.50 Lakh

Repayment Period:

  • Maximum 12 years exclusive of moratorium period.
  • Moratorium: Three years or duration of the course plus one year whichever is earlier.

Rate of Interest

Up to Rs 50 LakhsPLR – 3.75 = 10.50%
Present PLR: 14.25% p.a
  • 0.50% less rate of interest would be applicable in case of girl students.
  • 0.25% less rate of interest would be applicable in case of studies in Indian Institute of Management (IIMs) and Indian Institute of Technology (IITs), XLRI, ISB.
  • For courses not approved by IBA ROI at PLR-2.00 i.e. 12.25 % p.a. and terms and conditions as per MPLS.

Processing fees

  • For Studies in India – NIL
  • For Studies Abroad – 0.5% of the loan amount maximum Rs.10000/-. 


  • Up to Rs.1 Lakhs: Nominal Membership
  • Above Rs.1 Lakhs: 2.5% of the sanctioned loan amount, Maximum Rs.25000/-


  • Up to Rs.4.00 Lakhs: Without guarantors
  • Above Rs.4.00 Lakhs: Pledge of any other tangible security acceptable to the bank OR Equitable mortgage of Property

Insurance: Life insurance policy of the student borrower


  • Duly filled prescribed application form
  • Latest Photograph, Photo Identity & Residence Proof of the Applicant & Guarantor
  • Income proof a) or b) as applicable
  • a) Salaried person: salary slips for last 3 months, ITR/Form 16 of last 2 years and 3-month Bank statement.

    b) Businessman/Professional/self-employed: last three years profit & loss account and balance sheet, & ITR and Bank statement for last 3 months and 3-month Bank statement.   

  • Proof of confirmed admission
  • Estimate of course fees & other expense (traveling /lodging /boarding)
  • Fee receipts or proof of payments made.
  • Copy of Passport & Visa and related documents, if the student is going abroad for higher education

Courses Covered

Study in India:

  • Graduation, Post-graduation including regular technical and professional Degree/Diploma courses conducted by colleges/universities approved by UGC/ AICTE/IMC/Govt. etc.
  • Regular Degree/ Diploma Courses conducted by autonomous institutions like IIT, IIM etc.
  • Teacher training/ Nursing courses approved by Central government or the State Government
  • Regular Degree/Diploma Courses like Aeronautical, pilot training, shipping etc. approved by Director General of Civil Aviation/Shipping/ concerned regulatory authority

Studies abroad

  • Job oriented professional/ technical Graduation Degree courses/ Post Graduation Degree and Diploma courses like MCA, MBA, MS, etc. offered by reputed universities
  • Courses conducted by CIMA (Chartered Institute of Management Accountants) - London, CPA (Certified Public Accountant) in USA etc.

Expenses Covered: Up to 90% of cost of the fees and other related expenses.

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

The list of documents required are representative, for actuals do refer the respective lender

EMI Payment Methods

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

Standing Instruction (SI): If you are an existing account holder with Saraswat 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 Saraswat Bank account you specify.

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

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

Saraswat 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 Saraswat Bank?

Yes, the interest rate ranges from 10.50% - 14.25%. 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, Saraswat Bank offers up to INR 50 Lakhs for courses pursued abroad which also includes travel expenses and study tours.

5. Is there a processing fee for an education loan with Saraswat Bank?

There are no processing fees for an education loan with Saraswat Bank for studying in India. But 0.5% of the loan amount maximum Rs.10000/- is levied for loans availed to study abroad.

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

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

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