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South Indian Bank Education Loan

South Indian Bank Education Loan


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South Indian 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 South Indian Bank

One of the earliest banks in South India, "South Indian Bank" came into being during the Swadeshi movement. The establishment of the bank was the fulfillment of the dreams of a group of enterprising men who joined together at Thrissur, a major town (now known as the Cultural Capital of Kerala), in the erstwhile State of Cochin to provide for the people a safe, efficient and service oriented repository of savings of the community. They now operate with 851 branches, 52 extension counters, 4 service branches and 1313 branches across India.

An Introduction to South Indian Bank (Vitjnan Pradhan Scheme) 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, South Indian 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 South Indian Bank education loans.

Advantages of South Indian Bank Education Loan

Following are some of the advantages of applying for an educational loan with South Indian 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 South Indian 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

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

Margin: No margin for up to INR 4 Lakhs and for above that limit, 5% of margin for studies in India and 15% for studies in abroad


1. Up to Rs.4.00 Lacs – Parents to be Joint Borrowers. No security required.

2. Above Rs.4 Lacs and up to Rs.7.50 Lacs – Parents to be joint borrowers together with collateral security in the form of suitable Third-Party Guarantee

3. Above Rs.7.50 Lacs – Any tangible security as collateral acceptable to the bank with suitable margin.

Repayment Period:

1. Repayment of the loan will be in equated monthly installments over a period of 15 years, excluding moratorium period

2. Repayment Holiday / Moratorium: Course period + 1 year.

3. Interest concession of 1% may be allowed, if interest is serviced during the study period and subsequent moratorium period prior to commencement of repayment.

Processing fees: NIL

Penal Interest

Penal interest @ 2 % to be charged for loans above Rs.2 Lacs, for the overdue amount and overdue period.

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.

SIB Excellence

Objective: To provide financial offers to the creamy layer of the talented youths pursuing professional studies in the top prestigious educational institutions in India to our bank.

Quantum of Loan: Maximum of Rs.15.00 Lakhs subject to actual requirement, whichever is lower.


Up to Rs.4 .00 Lakhs: NIL

Above Rs.4.00 Lakhs: 5%.

Scholarships/assistantship can be included in margin. Margin may be brought in on year-to-year basis as and when disbursements are made

Expenses covered

  • Fees payable to College including examination/library /laboratory fees
  • Caution deposits and refundable deposits (not exceeding 10% of tuition fees for the entire course)
  • Cost of study books / equipment/computers
  • Cost of uniform
  • Hostel Boarding and lodging
  • One time premium of life insurance policy (without maturity return) covering the entire period of loan with sum assured equal to the loan amount


No collateral security to be insisted. Only guarantee by one of the parents/ close relative envisaged.

Borrower Guarantor

  • In case of major students – borrower to be the student him/herself along with at least one of his/her parents as guarantor. Net worth of the guarantor/s should not be less than the loan amount.
  • If parents are not alive, close relative should be guarantor. (Either one guarantor with net worth not less than the loan amount or more than one guarantor with total net worth not less than the loan amount).
  • In the case of minor students – one of the parents to be the borrower along with the other parent/ close relative as guarantor.

Repayment Period

Repayment will start from 1 year after qualifying exam or six months after obtaining employment, whichever is earlier. Loan should be repaid in 60 equal monthly instalments after the holiday/ moratorium as above.

Prepayment Penalty

No prepayment penalty. Interest during holiday period may be funded /remitted as per option given by the borrower at the time of availing of loan.

Other Conditions

  • Only Indian Nationals (including NRIs) are eligible. Loan should not be granted for the payment of capitation fee / donation.
  • Copy of the mark sheet / progress report of the student/borrower Semester wise will have to produce to the bank. In case the student fails in any annual/semester examinations during his/her study, continuance of the loan should be reviewed by the sanctioning authority.
  • The borrower should submit application with identity proof including passport details, if available.
  • Individual worth statements of all the signatories and relevant record/proof for financial requirements for the entire course, including admission ticket if any to be provided.
  • Tariff of fees, refundable deposits, hostel fees, details of eligible stipend etc. should be certified by the educational institution. Books/instruments to be purchased should be certified by the program co- coordinator.
  • The borrower to open SB account with the nearest / loan emanating branch of our bank.

Vidyanidhi Scheme

This loan is for students who have newly secured admission to selected Professional Colleges in Kerala.

Objective: To enable the student to pay ‘refundable deposit’ demanded by the educational institution

Quantum of Loan: Maximum of Rs.1 Lakh

Servicing of interest

Option to fund the interest or service the interest monthly. If the interest is funded, the same is to be repaid by 60 EMIs after the holiday period.

Margin:Nil, if interest is serviced periodically; 15% margin if interest is funded



The parents of the students should guarantee the loan. If both the parents are not alive, guarantee may be obtained from the guardian or any other person having net worth not less than the loan amount.

Repayment of Loan

Bullet repayment from the Management of the college immediately after completion of the course. If the interest is funded, the repayment of funded interest to be effected by 60 EMIs which will start one year after the qualifying exam or six months after the student obtaining employment, whichever is earlier.


The student, along with the guarantors should give:

a. An authorization to the bank to effect payment of the loan proceeds direct to the College Management as prescribed in the Prospectus.

b. An authorization to the College Management -through the branch- to refund the amount direct to the bank (along with interest if any), after completion of the course or on discontinuance of studies whichever is earlier.


The student, along with the guarantors should give:

a. From the College Management: An irrevocable undertaking to be obtained from the College Management for repaying the entire amount received from the bank (along with interest, if any) direct to the bank on completion of the course by the student. If for any reason, the student is unable to complete the studies due to any reasons whatsoever, the payment has to be effected immediately by the management.

b. From the student: Student along with the guarantors should give an undertaking to the effect that in case of discontinuance of studies, for whatever reason, the smatter will be immediately intimated to the branch in writing along with copy endorsed to the College Management.

Penal Interest: 2% for default of sanction terms

Rate of Interest for Various Education Loan Schemes

Base rate is 10.20%

Vitjnan Pradhan Scheme Loan amount up to Rs.4 Lakhs Base rate + 5.80%
Vitjnan Pradhan Scheme Loan amount more than Rs.4 LakhsBase rate + 6.30%
Vidyanidhi loan schemeBase rate + 5.20%
SIB-Excellence up to Rs.10 LakhsBase rate + 1.10%
SIB-Excellence above Rs.10 LakhsBase rate + 2.10%

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

South Indian Bank education loan can be repaid in following three ways.

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

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

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

South Indian 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 South Indian Bank?

Yes, the interest rate ranges from 10.20 % - 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, South Indian 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 South Indian Bank?

There are no processing fees for an education loan with South Indian 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. South Indian 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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