Bank of Baroda Education Loan – With the proliferation of Indian students aspiring to study abroad, education loan has become an important aspect of the student’s admission plan. This is due to the high cost of tuition fee and living expenses coupled with a shortage of scholarships available to international students. In addition, many universities and visa applications require accepted students to show proof of funds before final allotment of seat. Along with being a source of fund for higher education, tax benefits under section 80E of the Income tax act can be availed on the interest paid on education loan. Many banks offer education loans to students interested in pursuing higher education from abroad or India. One such bank is Bank of Baroda, an Indian state-owned international banking and financial services company headquartered in Gujarat. It is India’s second-biggest bank by assets and has a network of more than 5500 branches in India and abroad. Education loan from Bank of Baroda is offered to Indian students aspiring to study abroad through two schemes:
Baroda Scholar - for students interested in pursuing higher education from abroad
Baroda Education Loans for Executive Development Programme being offered by Premier Institutions abroad
Student should fulfill the eligibility criteria laid down by the bank to be eligible for education loan:
Student should be an Indian National
Student should have secured admission to professional or technical courses in a university or institute situated abroad through Entrance Test or Merit-Based Selection process.
Students should be accepted to an eligible course to apply for Bank of Baroda education loan:
Graduation – For job oriented professional or technical courses offered by reputed universities
Post Graduation – MCA, MBA, MS etc.
Courses conducted by professional organisations like CIMA in London, CPA and CFA in USA
Regular degree or diploma courses in Aeronautical, Pilot training, shipping etc provided these are recognised by the local aviation or shipping authority, and Director General of Civil Aviation or shipping in India or the competent regulatory bodies in India for the purpose of employment in India or abroad
List of premier institutes for Management, STEM, Medical and other courses like Law, Economics, Art, performing arts and Design is given below. All the institutes on the list will be treated at par and Bank of Baroda education loan will be provided to the candidate admitted in these institutes. However, this is not an exhaustive list and the bank will consider loans for courses not given above. Students admitted in a college not given in the list will also be considered for Bank of Baroda education loan without any preferential treatment.
Education loan by Bank of Baroda can also be provided for Executive Development Programme (part-time or online programmes or distance learning) being offered by an institute given above. This will also include programmes using technology platforms like Times pro, Hughes Global Education etc. Student eligibility criteria for EDP loan is the same along with an additional condition that the student should be gainfully employed and would continue to be employed during the course of the study.
Bank of Baroda Education loan: Documents Required
Following documents are required to be submitted by the student when applying for Bank of Baroda education loan:
Proof of Identity of co-applicant (anyone)
Voter ID card
Any government department ID card
Proof of income
Latest salary slip from the organisation employing the parent showing all the deductions, or Form 16 along with the latest salary certificate
IT return of past 2 years or computation of income for past two years certified by a CA in case of a self-employed individual.
Proof of Residence (any one)
Latest electricity or telephone bill
Latest bank account or credit card statements
Existing house lease agreement
Current bank account statement in case of self-employed individuals
Passbook or bank account where the salary is credited - Required for the last 6 months
Insurer form (optional)
Educational documents of the student:
Copy of fee slip
Admission letter to the educational institutions
School leaving certificate
High School Examination mark sheet
Bank of Baroda Education Loan Interest Rate
Education loan from Bank of Baroda interest rate is the same for regular courses and Executive development programme:
Institutes specified in the list of premier institutes - 1 year MCLR + 1.25% Spread
Institutes not specified in the list of premier institutes - 1 year MCLR + 2 % Spread
The Marginal Cost of funds based Lending Rate (MCLR) is the minimum interest rate of a bank below which it cannot lend. MCLR with effect from 7th August 2018 as per Reserve bank of India is 8.50%. The spread of education loan from Bank of Baroda also includes Strategic Premium of 0.35%. There is a concession of 0.50% for girl students under both schemes. Bank of Baroda education loan interest rate will be charged on a monthly basis from the date of the first disbursement till the payment of last EMI. However, only the education loan interest rate will be charged during the Moratorium period, which is the duration of the course + 1 year. This means that interest rate will be paid on a monthly basis by the co-applicant on the amount of disbursement made by the bank. Interest during the holiday period, which is the year after completion of the course, if not paid will be accrued and added during Equated Monthly Installments(EMI). Penal interest on Bank of Baroda education loan exceeding 4 lakhs will be charged at the rate of 2% on the overdue amount for the overdue period.
Bank of Baroda Education Loan Amount
The maximum amount of education loan from Bank of Baroda depends on the college or university which the student has applied to:
Institutes specified in the list of premier institutions – 80 lakhs
Institutes not specified in the list of premier institutions – 60 lakhs
Bank of Baroda education loan amount also depends on the repayment capacity of the co-applicant i.e. parents or guardian of the student. Loan amount of education loan will cover the following expenses:
Fee payable to the college or institute or university
Living expenses like hostel and mess charges
Examination or Library or Laboratory fee
Purchase of books or equipment or instruments or personal laptops necessary for completion of the course.
Caution deposit, Building fund or Refundable deposit subject to the condition that the amount is less than 10% of the total tuition fees for the entire course. This claim should be supported by institution bills or receipts from the university
Insurance premium cover for the student if necessary according to university regulations or visa application.
Any other expenses required to complete the course like study tours, project works, thesis etc.
Travel expenses or passage money to and from the country in which the college is located
Students must remember that expenses involved in external coaching or tuition will not be considered for Bank of Baroda education loan. Unified Processing charges, which is 1% of the loan amount or a maximum of 10,000, has to be paid by the student when applying for education loan. However, this amount will be refunded after availing the first disbursement of education loan.
Bank of Baroda 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 with each disbursement. Margin money will be excluded from education loan amount. Scholarships can be included in the margin money for Bank of Baroda education loan. However, education loan from Bank of Baroda interest rate will not be charged on the margin money. Following are the margin money requirements for different categories of education loan:
Up to 4 lakhs - Nil
Above 4 lakhs – 10%
In case of education loan from Bank of Baroda for Executive Development Programme, margin money of 5% is required for loans exceeding 4 lakhs.
Bank of Baroda Education Loan: Repayment Period
Repayment of education loan from Bank of Baroda will start after the moratorium period, which is the duration of the programme + 1 year. education loan is repayable in 10 to 15 years (maximum). After the moratorium period, Equated Monthly Installments have to be paid by the student each month. EMI will include interest and the principal amount of education loan. education loans up to 7.5 lakhs have to be repaid in at most 120 installments. For education loans exceeding 7.5 lakhs, the maximum number of installment can be 180. Branch closest to the permanent residence of the parent or legal guardian will be the financing branch for Bank of Baroda education loan.
Moratorium period for education loan for Executive Development Programme is the course of the programme + 3 months.
Bank of Baroda Education Loan: Security
The collateral needed for Bank of Baroda education loan 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 Bank of Baroda education loan will be determined by the loan amount:
Up to 4 lakhs – No collateral is required
4 lakhs to 7.5 lakhs – Collateral in the form of a suitable third party guarantee is required along with assignment of future income. However, the regional authority may waive third party guarantee if it is satisfied with the net worth of the parent who would be executing the document as “Joint borrower”. Third party guarantee can also be waived to support highly meritorious and deserving students who are unable to offer a suitable third party guarantee but have secured admission to an institute of high repute
Above 7.5 lakhs – Tangible collateral security equal to 100% of the loan amount is required along with the assignment of student’s future income for payment of installments.
In case of Bank of Baroda education loan where the property is mortgaged, a non-refundable lump sum amount of 7,500 per property will be taken upfront towards advocate and valuer charges. However, no mortgage creation charges will be taken by the bank for education loan.
Bank of Baroda Education Loan: Disbursement
Disbursement of education loan from Bank of Baroda will be done term or year wise directly to the college or university, depending on the requirement or demand of the institute. Subsequent amounts will be released in stages according to the detailed university fee brochure provided by the student. Accommodation expenses like hostel and mess charges will also be directly paid to the respective organisations. If the student does not secure hostel facility with the university, he/she will be allowed to make his/her own arrangements as and when required. Lodging or boarding charges in such a case will be paid directly to the concerned establishment, after verification of the same. Margin money for each disbursement of Bank of Baroda education loan must be deposited by the student to a bank account set up for the purpose. Expenses involved in the purchase of books, instruments, equipment or laptop will be directly made to the seller or shopkeeper.
Bank of Baroda Education Loan Customer Care
For further assistance, aspirants interested in education loan can locate the nearest Bank of Baroda branch or visit the website for more information. They can also give a missed call on the number – 846 700 1122.
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