Bank of India Education Loan – Recent years have seen a proliferation of international courses being taught in English all over the world, along with an increase in Indian students studying abroad. However, tuition costs and living expenses for an undergraduate or postgraduate programme are immense when converted to Indian rupees. All major private and public banks in India offer education loan to students for pursuing higher education from abroad or India. Along with funding higher education, tax benefits under Section 80E can be claimed on interest paid on education loan. Bank of India is a public bank offering loans through two different schemes, which are aimed at providing financial support from the bank to deserving students for pursuing higher education in India and abroad:
Star Vidya Loan Scheme - Exclusive education loan scheme for students of premier educational institutions in India. The list of institutions covered under this scheme is given at the end of the article.
Star Education Loan Scheme – Education loan scheme for students of institutions not covered under Star Vidya Loan Scheme
Bank of India Education Loan: Eligibility Criteria
Students have to fulfill the eligibility criteria given below to apply for Bank of India (BOI) education loan:
Student should be an Indian National
Student should have secured admission to a higher education course in a recognised institution in India or abroad, through Entrance Test or Merit based selection process after completion of Higher Secondary School (10 plus 2 or equivalent)
Student should have a good academic background
Student should not have outstanding education loan from any other Institution
Father or Mother of the student should be the co-borrower
Student should have secured admission in an eligible course to be considered for an education loan from Bank of India. Following is an indicative list of eligible courses in India:
Courses leading to graduate or post-graduate degree, and P.G. diplomas conducted by recognised colleges or universities approved by UGC/Government/AICTE/AIBMS/ICMR
Courses like ICWA,CA, CFA etc
Courses conducted by IIM, IIT, IISc, XLRI, NIFT, NID and other Institutes set up by Central or State Govt.
Regular Degree or Diploma courses in disciplines like Aeronautical, Pilot Training, Nursing or any other approved by the Director General of Civil Aviation or Shipping or Indian Nursing Council
Students applying for Bank of India education loan should note that Professional courses not approved by AICTE and conducted by Institutes not recognized by State Universities are outside the purview of eligible courses.
Students aspiring to study abroad should be admitted in eligible courses to be considered for Bank of India education loan:
Graduation - Job oriented professional or technical courses offered by reputed universities
Post Graduation - MCA, MBA, MS, etc.
Courses conducted by reputed professional organisations like CIMA in London, CPA in USA etc
To be eligible under Star Vidya Loan Scheme, a student must be an Indian national and have secured admission in a premier educational institute of India. However, certificate or part-time courses are not covered under this scheme.
Bank of India Education Loan: Documents Required
List of documents given below have to be submitted by the student at the time of applying for BOI education loan:
Address proof of student and co-borrower – Voter ID, Ration Card, Passport etc.
Identity proof of student and co-borrower – Voter ID, Passport, PAN Card etc.
Income details of co-borrower (either salaried or self-employed) – PAN Card, Form 16, Form 60, Income Tax Returns, Salary Slips etc.
Education Documents of the student – SSC and HSC mark sheets, degree certificates.
Bank of India Education Loan Interest Rate
BOI Education loan interest rate is linked to 1 year Marginal Cost of Funds based Lending Rate (MCLR), which is 8.50% p.a. as per RBI guidelines. All interest rates on Bank of India Education loan are on floating rate basis. The rate of interest for an education loan from Bank of India is different for each scheme:
Star Education Loan Scheme
Education Loan covered under Credit Guarantee Fund Scheme for Education Loan (CGFSEL) with a limit of 7.5 lakhs – 1 year MCLR + 1.70%
For loans above 7.5 lakhs – 1 year MCLR + 2.50%
Star Vidya Loan Scheme – 1 year MCLR
Only simple interest will be charged during the moratorium period of Bank of India education loan. If the interest is serviced during the study period, 1% interest concession may be provided to the student. In addition, all students pursuing professional courses like Engineering or Medical or Management etc are eligible for a maximum of 0.50% interest rate concession. Bank of India interest rate concession of 0.50% p.a will be provided to women beneficiaries. In the case of Star Vidya Loan Scheme, no other concession will be provided to the student.
Bank of India Education Loan: Loan Amount
BOI education loan will be granted based on various factors subject to the following ceiling:
- Study in India – Maximum 10 lakhs
- Study abroad – Maximum 20 lakhs
Under Star Vidya Loan Scheme, the ceiling of Bank of India loan amount will vary according to the category of the institution in the list:
Institutes under List “A” – 30 Lakhs
Institutes under List “B” – 20 Lakhs
Institutes under List “C” – 10 Lakhs
Expenses given below will be considered for Bank of India education loan:
Fee payable to college or school or hostel as per brochure or demand letter from the university
Examination or Library or Laboratory fee
Purchase of books or equipments or instruments or uniforms or laptops necessary for completion of the programme
Caution deposit or building fund or refundable deposit supported by Institution
Travel expenses or passage money for studying abroad
Life Insurance Premium for life cover of student or co-borrower if required for visa approval
Any other expenses required to complete the course like study tours, project work, thesis, etc.
Bank of India 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. Scholarships can be included in the margin money for Bank of India education loan. Following are the margin money requirements for different categories of BOI education loan:
- Up to 4 lakhs - Nil
- Above 4 lakhs - Study in India: 5%
Study Abroad: 15%
Under Star Vidya Loan Scheme, no margin money is required to be paid by the student.
Bank of India Education Loan: Security
The security for Bank of India (BOI) 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 etc. Security for education loan from Bank of India should be in the name of the student or parent or guardian or guarantor with a suitable margin. Following is the security for Bank of India education loan, based on the loan amount:
Up to 7.50 lakhs - No collateral security or Third Party Guarantee since it is covered under Credit Guarantee Fund Scheme for Education Loans(CGFSEL). However, parents or guardians have to be joint borrowers for this scheme to be applicable.
Above 7.5 lakhs – Tangible Collateral security of suitable value along with the assignment of future income of the student for payment of installments, and a co-obligation of the parents or guardians.
Bank of India education loans up to 7.50 lakhs which conform to the guidelines of “IBA Model Education Loan Scheme for pursuing studies in India and Abroad” are eligible for coverage under CGFSEL by National Credit Guarantee Trustee Company (NCGTC)
Under Star Vidya Loan Scheme, no collateral security is required from the student. However, parents or guardians must be a co-borrower and an assignment of the student’s future income will be done.
Bank of India Education Loan: Repayment
Repayment of education loan from Bank of India (BOI) will start after the moratorium period, which is the programme duration plus a period of 1 year. An Equated Monthly Installment (EMI), which would include the principal and interest amount, will be calculated to be paid monthly by the student or the co-applicant. Any interest accrued during the repayment holiday period will also be added to the principal for estimating EMI. The repayment period for BOI education loan will be 15 years after the commencement of repayment. For loans above 4 lakhs, penal interest at the rate of 2% will be charged in case of overdue amount or period. For Bank of India education loan under Star Vidya Loan Scheme, repayment will be done in the same way.
Bank of India Education Loan: Disbursement
Disbursement of Education loan by Bank of India will be done directly and in stages as per the requirement or demand of the university. Before availing next installment of Bank of India education loan, a student must produce the mark list of previous term or semester. Furthermore, student or parent must immediately inform the bank in case of a change in course or completion or termination of studies or any refund of fees by the college, and on successful placement.
Bank of India Education Loan: Approval Process
Education loan by Bank of India will be approved by the branch closest to the permanent residence of the student, and is at the sole discretion of the bank. Students can also apply online for Bank of India education loan through the Vidya Lakshmi Portal developed by the NSDL e-Governance Infrastructure Ltd. No processing charges will apply for students aspiring to study in India while a processing fee of Rs 5000 will be charged from study abroad applicants. After availing education loan from Bank of India, this processing charge will be refunded excluding Service Tax. Following charges are to be borne by the applicant, if necessary, for the apporval of Bank of India education loan:
Valuation of property from Bank’s approved valuer
Obtaining of a Title Clearance Report from an Advocate on Bank’s approved panel
Registration of charges with the office of the Sub-Registrar (wherever applicable)
Registration of charge with ROC (wherever applicable) etc
Stamping charges for execution of documents
Premia for Insurance of property/assets
Credit Information Report charges
Bank of India Education Loan Customer Care
Interested students can visit the Bank of India website or contact the nearest branch for further information.