Andhra Bank Education Loan
Andhra Bank Education Loan – Recent years have seen an increase in the number of international courses and Indian students aspiring to study abroad. The high cost of tuition fee and living expenses like accommodation, food, travel etc should not hamper student’s dreams of higher education. This is where an Education loan comes in. Along with being a source of funds for higher education, tax benefits under Section 80E of the Income Tax Act can be claimed on the interest paid on education loan. Many public and private banks offer student loans to candidates interested in pursuing higher education from foreign universities. Andhra Bank is a public bank headquartered in Hyderabad offering education loan to Indian and NRI students for higher studies in India and abroad.
Andhra Bank Education Loan: Eligibility Criteria
Students must fulfill the eligibility criteria to be considered for Education Loan from Andhra Bank:
Student should be an Indian national
Student should have secured admission to a higher education course in recognized institutions in India or abroad through Entrance Test or Merit-Based Selection process after completion of Higher Secondary School (10 plus 2 or equivalent) or higher qualification (undergraduate or postgraduate degree)
In case of Merit based selection where marks secured in the qualifying examination are the only criteria, the student should obtain at least 65% aggregate in the qualifying academic examination.
Meritorious students who qualify through the entrance examination but choose management quota for reasons like proximity or choice of course or any other academic reason are eligible for Andhra Bank education loan.
At any point in time during the loan period, not more than 2 loans should be outstanding in the name of the student
Non-Resident Indian students who wish to pursue higher education from abroad have to fulfill the following eligibility criteria to be considered for Andhra Bank abroad education loan:
NRI students must be an Indian National
NRI student must be over 17 years of age to a maximum of 35 years.
NRI student must possess a valid passport and visa
NRI student must be in possession of an Admission confirmation letter from the concerned university
NRI student must have secured admission in overseas college or university or institution in any of the following disciplines to be considered for Andhra Bank abroad education loan:
Graduation – For job oriented profession or technical courses offered by reputed universities.
Post Graduation – MCA, MBA, MS etc
Courses conducted by professional organisations like CIMA in London, CPA in USA etc.
Graduate or postgraduate studies in Arts, Science, Commerce and Business Administration.
Graduate or postgraduate studies in Pharmacy
Graduate or postgraduate studies in any Professional or Technical courses
Ph.D. ( Doctor of Philosophy) courses from reputed university or institutions
The institution that has accepted the student must also satisfy the eligibility criteria for the student to apply for Andhra Bank abroad Education loan. The eligibility for Andhra Bank education loan will be determined by the employability of the course and the reputation of the foreign university. A list of all accredited institutions for different courses is available at the website. Andhra Bank abroad education loan is given to students who secure admission in an accredited institution.
Click here to check the accredited list of institutions in India for Andhra Bank Education Loan
There is also a list of ‘A’ rated universities admission to which will allow the student to avail different concessions on Andhra Bank abroad education loan.
Andhra Bank Education Loan Interest Rate
The interest rate on Andhra Pradesh abroad education loan varies depending on the loan amount:
Up to 7.50 lakhs – MCLR (one year) + 2.00 %
Above 7.50 lakhs – MCLR (one year) + 1.70 %
The marginal cost of funds based lending rate (MCLR) is the minimum interest rate below which bank cannot provide the loan. MCLR as decided by the Reserve Bank of India is 8.50% p.a., subject to changes from time to time. Girl students applying for Andhra Bank Education loan will be provided a concession of 0.50% in the interest rate. The education loan from Andhra Bank interest rate for students selected to a premier institute will be MCLR (one year) + 0.20%.
Andhra Bank Education Loan interest rate will be charged on the disbursement amount from the date of the first disbursement. The simple interest rate on education loan from Andhra Bank has to be paid by the co-borrower on a monthly basis during disbursements. Only simple interest will be charged during the moratorium period, which is the course of the programme + 6 months or 1 year (earliest depending on when the student gets a job placement). Interest charged during the holiday period of Andhra Bank education loan if not paid will be accrued and added to the principal during Equated Monthly Installments (EMI) calculations. No Andhra Bank Education Loan Interest Rate will be charged on the margin money paid by the student. For education loan from Andhra Bank above 2 lakhs, penal interest at the rate of 2% will be charged on the overdue amount for the overdue period.
Andhra Bank Education Loan: Loan Amount
The loan amount of Andhra Bank abroad education loan is need-based as informed in the admission or confirmation letter of the university, subject to a maximum of 20 lakhs. Following expenses will be considered towards the determination of loan amount:
Tuition Fees as present in the admission letter or university brochure
Study Tours, Project Work
Cost of book and stationery necessary for completion of the course
Equipment essential to the performance of the student during the programme
Caution Deposit, Building Funds, Refundable Deposits necessary for admission to the university
Bills or receipts, subject to the condition that the amount does not exceed 10% of the total tuition fees for the entire course
Cost of Air Passage to the foreign country including Health Insurance as per Foreign Exchange permit
Student aspiring to study in foreign universities must note that only one Andhra Bank abroad education loan will be sanctioned, subject to a maximum of 20 lakhs.
Andhra Bank Education Loan: Margin Money
Margin money is the amount to be paid by the student with each disbursement made by the bank. This is usually done by depositing the required amount in a bank account on a year to year basis. Margin money will be excluded from the Andhra Bank education loan amount. Scholarships can be included in the margin money for Andhra Bank abroad education loan. Following are the margin money requirements for different categories of Andhra Bank abroad education loan:
Up to 4 lakhs - Nil
Above 4 lakhs – 15%
Andhra Bank Education Loan: Disbursement
Disbursement of Education loan by Andhra Bank will be done directly and in stages as per the requirement or demand of the university. The first disbursement will cover the cost of air passage and foreign exchange towards the payment of semester fee along with hostel expenses given in the admission card of the college. Subsequent amounts will be released annually, proportionate to the expenses towards semester fees, hostel fees etc.
Andhra Bank Education Loan: Co-applicant
A co-applicant is a close relative of the student who will co-sign the loan and act as the primary debtor. Co-applicant or co-borrower must be an Indian citizen and the parent of the student. In case parents are not present, grandparents can be considered as co-applicant for Andhra Bank education loan taking into account their net worth. Guardians can also be a co-applicant for Andhra Bank abroad Education loan, given that he/she is a bonafide guardian to the student and is court appointed. Spouse or parents-in-law can serve as co-applicant for Andhra bank abroad education loan in case of a married individual.
Andhra Bank Education Loan: Security
The security for education loan from Andhra Bank can be in the form of Property (land or building), Bank Term Deposit, Government Securities, Public Sector Bonds, National Savings Certificate, Kisan Vikas Patra, Life Insurance Policy, Shares, and securities etc. Security for Andhra Bank education loan will be determined by the loan amount:
Up to 4 lakhs – No collateral is required
4 lakhs to 7.5 lakhs – No collateral is required. However, co-obligation of parent or guardian or third party is a must.
Above 7.5 lakhs – Tangible security of suitable value is required along with co-obligation of parent and assignment of student’s future income.
NRI student must provide suitable collateral security that is enforceable in India when applying for Andhra Bank abroad education loan.
Andhra Bank Education Loan: Documents Required
List of documents given below have to be submitted by the student at the time of applying for Andhra Bank abroad education loan:
Duly filled application form
Identity and address proof of borrower, joint borrower and co-obligants
Passport size photographs of borrower, joint borrower and co-obligants
Proof of date of birth of the borrower
Marks transcripts of the student from 10th grade onwards
Proof and source of income of parents or guardians:
1. In case of salaried individuals:
Salary slip from the employer
Bank records of the salary account
Income tax assessment for the last three years
2. In case of self-employed individuals:
Financial statements of the concerned business or entity for the last three years attested by an authorised Chartered Accountant
Profit and loss statements of the concerned business or entity for the last three years attested by an authorised Chartered Accountant
Bank records of all the accounts in the name of the co-applicant
Following documents will be required along with every security:
Certification of inspection of security
Legal Audit, wherever applicable
Wherever property is offered as a collateral, following documents must also be submitted:
Certified copy of the title deed indicating title to the property
Tax paid receipts
NIL encumbrance certificate
Valuation Report by an approved valuer
Managers certificate for valuation of property
Undertaking letter to adjust the residual amount of loan
A letter from the applicant declaring that he/she is not having any similar loan with any other branch of the bank or with any other bank
Verification report from outsourcing agencies or branch official
Credit information report from CIBIL and Declaration for giving information to CIBIL
Credit investigation or due diligence or Pre-sanction verification report
Bonafide Certificates to be submitted in case the student has applied to an Indian institution:
Certificate of Domicile
Study Certificates or Rank Card
Proof of allotment of seat
Fee particulars from college or university
Verification of accreditation of the college or university by Andhra bank
Acceptance letter along with Hostel accommodation and charges
Proof of availing scholarship, if any
- In case the student has applied to an institution present abroad:
Certified copy of passport and visa
Letter of offer – proof of allotment of seat
Copy of university admission letter indicating the course duration, fee structure, insurance particulars, cost of study and scholarship if any (I-20 in case of USA)
Estimate of travel and health insurance
Special power of attorney
Andhra Bank Education Loan: Repayment
Repayment of education loan from Andhra Bank will start after the holiday period, which is 1 year after course period or 6 months after students gets a job, whichever is earlier. Equated Monthly Installment (EMI), which includes interest and principal amount, must be paid by the student or co-applicant on a monthly basis. Andhra Bank abroad Education Loan must be repaid in 5-7 years after commencement of the repayment period.
Andhra Bank Education Loan Customer Care
Interested students can visit the Andhra Bank website or contact the nearest branch for further information on Andhra Bank abroad education loan. They can also dial the toll free number - 1800 425 1515 for Andhra Bank Education Loan Customer Care.