Bank of Maharashtra Education Loan – Recent years have seen a proliferation of international courses being taught in English and Indian students aspiring to study abroad. The high cost of tuition fee and living expenses like accommodation, food, travel etc combined with the exchange rate of the Indian currency makes it difficult for Indian students to study in foreign countries. Fortunately, many public and private banks offer student loans to candidates interested in pursuing higher education from foreign universities. 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. Bank of Maharashtra is a major public sector bank in India with the largest network of branches in the state offering education loan to students for the purpose of studies in India and abroad.
Bank of Maharashtra Education Loan: Eligibility Criteria
Students must fulfill the eligibility criteria to be considered for education loan from Bank of Maharashtra:
Student should be an Indian national
There are no age limit restrictions on the student for him/her to be eligible for Bank of Maharashtra Education Loan
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)
Student must have secured admission in overseas college or university or institution in any of the following disciplines to be considered for Bank of Maharashtra 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 and AFFA in London, CPA and CFA in USA etc.
Degree or Diploma courses in the fields of aeronautical, pilot training, shipping etc. provided these are recognized by the competent regulatory bodies, in India or Abroad for the purpose of employment in India or abroad.
Bank of Maharashtra Education Loan Interest Rate
The interest rate on education loan from Bank of Maharashtra varies depending on the loan amount:
Up to 7.50 lakhs – MCLR (one year) + 2.00 %
Above 7.50 lakhs – MCLR (one year) + 1.50 %
The marginal cost of funds based lending rate (MCLR) refers to the minimum interest rate of a bank, as decided by the Reserve Bank of India, below which it cannot lend. Current MCLR for one year is 8.75%, subject to changes from time to time. Simple Interest rate will be charged on the disbursement amount from the date of the first disbursement. Bank of Maharashtra education loan interest rate has to be paid monthly by the student from the date of disbursement till the moratorium period, which is the duration of the programme + a period of 6 months or a year. After the moratorium period, Bank of Maharashtra education loan interest rate will be compounded monthly. Around 1% interest concession may be provided to the student during the moratorium period, if the interest is serviced regularly. Following interest rate concessions are provided by the Bank of Maharashtra:
0.25% for Mahasaraswati accounts for 3 years
0.50% for girl students
0.50% to existing House Loan borrowers
0.50% for students getting admission to top rated Premier Institutions, the list for which will be made available upon request to the bank
Interest concession of .25% may be offered if the student provides an additional guarantor for education loan between 4 and 7.5 lakhs. However, a maximum concession of 0.5% is allowed on Bank of Maharashtra education loan interest rate.
Bank of Maharashtra Education Loan Amount
The maximum loan amount of education loan from Bank of Maharashtra for students aspiring to study abroad is 20 lakhs. However, loan for a higher amount can be considered on merit and case to case basis. Following expenses will be considered towards the determination of Bank of Maharashtra education 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
Cost of Air Passage to the foreign country
Insurance required as per Foreign Exchange permit or visa application cannot be included in the loan amount for education loan from Bank of Maharashtra.
Bank of Maharashtra 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 Bank of Maharashtra education loan amount. Scholarships can also be included in margin money calculations. Following are the margin money requirements for different categories of Bank of Maharashtra education loan:
Up to 4 lakhs - Nil
Above 4 lakhs – 15%
Bank of Maharashtra Education Loan: Security
The security for education loan from Bank of Maharashtra 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 Maharashtra education loan will be determined by the loan amount:
Up to 4 lakhs – No collateral is required but parents must be co-borrowers
4 lakhs to 7.5 lakhs – No collateral is required except satisfactory third party guarantee
Above 7.5 lakhs – Collateral equivalent to the quantum of finance after providing requisite margin with parents as joint borrowers
Bank of Maharashtra Education Loan: Repayment
Repayment of education loan from Bank of Maharashtra will start after the holiday period, which is 1 year or 6 months after the duration of the programme. Equated Monthly Installment (EMI), which includes interest and principal amount, must be paid by the student or co-applicant on a monthly basis. Bank of Maharashtra Education Loan must be repaid in a maximum period of 15 years after commencement of the repayment period.
Bank of Maharashtra Education Loan: Co-borrower
Co-borrower is an individual who will co-sign the loan and act as the primary debtor. Co-borrower for education loan from Bank of Maharashtra must be an Indian citizen and parent of the student. Co-borrower will pay the monthly interest on the Bank of Maharashtra education loan, from the date of the disbursement till the moratorium period. On the start of the repayment period, EMI must be paid for the whole repayment period by the co-borrower or the student. Proof of income, to be submitted by the parent when applying for Bank of Maharashtra education loan, will not be considered for assessment of the loan.
Bank of Maharashtra Education Loan: Disbursement
Disbursement of education loan by Bank of Maharashtra will be done directly to the institute in stages as per the requirement or demand of the university. The first disbursement of Bank of Maharashtra education loan will cover the payment of semester fee and hostel expenses given in the admission card along with the cost of air passage. Subsequent amounts will be released annually, proportionate to the expenses towards tuition fees, hostel fees etc. Margin money for each disbursement of education loan from Bank of Maharashtra must be deposited by the student in a bank account deemed for the purpose.
Bank of Maharashtra Education Loan: Documents Required
List of documents given below have to be submitted by the student at the time of applying foreducation loan from Bank of Maharashtra:
Proof of Identity
Proof of Address
PAN Card wherever available and applicable
Proof of Parental Income - For salaried class
Last 2 years ITR
Form – 16
Last 3 months salary slips
Last 6 months bank statement
Proof of Parental Income - For non salaried class
Last 2 years ITR
Audited Balance Sheet
Last 12 months bank statement
For agriculturists not filing income tax returns, income certificate issued by Tahsildar or Mandal revenue officer or Revenue Department Officer having State level gazetted rank
Proof of admission to professional or technical courses abroad through an Entrance test or merit based selection process
Academic certificates (10th and 12th certificates and other qualifications)
Graduation Mark sheets or certificates
Requisite exam scorecard or proof of obtaining a seat through merit based selection process
Recognition of institute or college or university (approved by competent authority)
Letter confirming admission
Prospectus of institute or college or university
Fee structure of the course
Receipt of payment already made
Bank of Maharashtra Education Loan Customer Care
Interested students can visit the official website or contact the nearest branch for further information on education loan from Bank of Maharashtra. They can also dial All India toll free number - 1800 233 4526 / 1800 102 2636 or contact the head office at 020 - 25532731 for Andhra Bank Education Loan Customer Care.