HDFC Education Loan – With the increase in the number 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 along with the scarcity and competitiveness of scholarships available to international students. In addition, many universities and visa applications require proof of funds before final approval and acceptance. 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 private and public banks offer education loans to study abroad aspirants, including HDFC Bank, which was incorporated in 1994 and is India’s largest private sector lender by assets.
Housing Development Finance Corporation Limited provides HDFC education loan through its subsidiary, HDFC Credila which has been formed for the specific purpose of tackling fund requirements for Indian students aspiring to study in India and abroad. Banks typically offer fixed education loan packages for certain category of students, but HDFC bank offers unique education loans based on various factors like the institute, co-borrower details, collateral security offered and the academic background of the student. Thus, each student is offered a specific education loan product with its own rate of interest, the requirement of collateral, repayment period and loan amount. Due to the customisable nature of student loan packages, students must fill out the application form or visit the nearest HDFC bank branch to know the specific terms being offered to them.
Furthermore, HDFC bank has distinct education loan products for various countries like USA, Germany, Canada etc tweaked according to the different demands and processes of universities and the visa process of each country.
Student and co‐applicants must meet HDFC’s credit and underwriting norms as applicable from time to time. Below is the criteria students need to fulfil to be eligible for HDFC bank education loan:
Student must be an Indian citizen
Co‐applicant or applicants must be an Indian citizen
Co‐borrower or borrowers must have a bank account in any bank in India with cheque writing facilities
Confirmed admission in the respective college before disbursement
HDFC Education loan: Documents Required
Other than the application form, the applicant is not required to provide any original supporting documents at the time of applying for HDFC bank education loan. All the copies of the documents listed below should be self‐attested:
Fully Completed and Signed Application Form
Two Passport Size Photographs – of student and co‐applicant with one set to be pasted and other to be affixed to the application form
Photo Identification – of student and co-applicant’s (any one of the following):
Permanent Account Number (PAN) Card
Voter ID card
Residence Proof – of student and co-applicant’s (any one of the following):
Proof Of Admission (if available) – printed admission letter from the Institute on its letterhead
Academic Documents of Student (all of the following):
Marksheet / Certificate of 12th examination
Marksheet / Certificate of subsequent years of education eg BE, Bcom, BSC etc
GRE / GMAT / TOEFL / IELTS etc scorecard (if applicable)
Scholarship documents (if applicable)
Last 8 Months Bank Statements of Co‐Applicant (if more than one bank account, copies of all are required) – should include bank statements of the individual where salary or business / professional receipts are credited every month.
Income Proof of Co‐Applicant
In case of Salaried Employee (All of the following):
Latest 3 Salary Slips or Certificate on employer’s letterhead
Last 2 year’s Form 16 from Employer or Last 2 Year’s Income Tax Returns
Any other Income Proof that is not reflected in the above documents
In case of Self Employed or Professional (All of the following):
Last 2 Year’s Income Tax Returns
Last 2 Year’s Certified Financial Statements or Provisional Financial Statements Duly Certified by CA
Proof Of Office (Lease Deed or Utility Bill or Title Deed)
Appropriate Collateral documents (if applicable)
In case of Immovable Property (All the Relevant Documents from the following list):
Property Title Deed
7/12 extracts in case of land
Registered Sale Agreement along with Society Share Certificate
Original Registration receipt for the above agreement
Allotment Letter By Municipal Corporation or Authorized Government Authority like MHADA, CIDCO, HUDA, DDA, JDA, GIDC etc
Previous Chain of Sale Deed to establish title
Latest Maintenance bill along with Receipts issued by the builder/society
Latest Property tax bill along with receipts
No Objection Certificate for a mortgage from society/builder
Approved building plan
To obtain loan money from HDFC bank, a student must visit the bank’s office to hand over all the below documents in their original form and sign the education loan agreement:
Original KYC Document of student e.g. PAN Card, Passport etc.
Original KYC Document of co-borrowers & guarantors e.g. PAN Card, Passport etc
Two original copies of completed Electronic Clearing System (ECS) Mandate Form signed and stamped by the co-applicant's bank
8 cheques favouring HDFC Credila Financial Services Pvt. Ltd. as security from the above bank
Copy of student’s visa
In case of collaterals:
Fixed Deposit - original FD receipt
Immoveable property - all original documents
In case of Tuition fees already paid - photocopy of the fees paid receipt.
‘Education Loan Sanction Letter’ is a document that approves the student for HDFC bank education loan and includes the different terms and conditions regarding loan amount, the rate of interest, collateral, disbursement etc. Approval letter for HDFC education loan can be obtained before acceptance of admission from the university or the visa. This is beneficial for students going to countries like Germany, where 60 – 70% of education loan disbursement is required before the Visa process. Estimation of education loan from HDFC amount will be based on student’s past academic records, test scores etc. However, HDFC bank education loan interest rate will be charged only after the loan is disbursed and on the actual amount of disbursement. HDFC education loan approval letter helps students in showing proof of funds to the university and visa authorities which in some cases is required to determine the financial ability of the student. In case, of the United States, the approval letter demonstrates ‘Availability of Liquid Funds’ which is needed for getting I-20 for US visa.
Banks typically charge a fixed rate for certain category of students, but HDFC education loan interest rate differs for each student. Education loan from HDFC interest rate is floating i.e. HDFC’s Benchmark Lending Rate (CBLR) + Spread. HDFC’s current CBLR is 11.85% per annum, which is subject to change from time to time. Added to this is the spread, which is determined by the risk profile of the case and varies from student to student on account of factors like student’s academic background, employability of the course, reputation of the selected college and country of study, financial strength of the co‐borrower, loan repayment capability, credit history, collateral offered or not, and cost/s associated with underwriting and servicing the loan. HDFC education loan interest rate will be calculated using simple interest on daily, monthly or yearly reducing principle. HDFC bank education loan interest rate will be charged and paid by the co-applicant after the first disbursement.
Loan amount for HDFC bank education loan has no upper limit, but depends from individual to individual, while the minimum loan amount is 1 lakh. Loans exceeding 25 lakhs are also available, subject to the case meeting bank’s credit and underwriting norms.
HDFC bank education loan provides 100% funding of all the expenses including
tuition fees as determined by the college /university
living expenses including food
Accommodation and hostel or boarding expenses
Travelling expenses which are restricted to one return ticket between India and the country of student’s education
other costs necessary for completion of the course like examination fees, library/laboratory fees, purchase of books/equipments/instruments, purchase of computers or laptops
HDFC bank education loan is disbursed in Indian rupee with 100% disbursement of the loan amount. At the time of disbursement, all the money will be provided by the bank. In other words, no margin money is required to be paid by the co-applicant for each instalment. Disbursement of the tuition fee is done directly to the university as per the requirement of the educational institute. Loan amount related to other expenses will be disbursed in instalments spread over the duration of the study. A student must decide the exact date of HDFC education loan disbursement, depending on the visa or last date of fee payment, and the amount of the first disbursement along with the distribution between tuition fee and living expenses. After receiving these details, the bank will prepare the final loan agreement which must be signed by the student, co-borrowers and guarantor (if any).
Collateral for education loan from HDFC is not fixed and varies from case to case depending on the student’s academic abilities, employability after the course and the creditworthiness of the co-applicant. The reputation of the institute and the type of degree course affects the determination of collateral for HDFC bank education loan since some courses like MBA and engineering have a higher chance of employment and placement in the job industry. In certain cases of meritorious students going to select colleges, HDFC education loan up to 20 lakhs can be provided without any collateral. Since partial collateral is accepted in some cases, collateral required for HDFC bank education loan can be less than 100% of the loan amount.
Collateral accepted for HDFC bank education loan should be any one of the following assets:
Fixed Deposit, assigned in favour of the bank
Residential House or Bungalow
Land – Non-Agricultural or Shop etc.
Loan against property mortgaged with HDFC can also be used as collateral for obtaining HDFC education loan. HDFC bank accepts the property with a clean title and appropriate documents since the value of the property will be independently assessed by the credit team before granting a loan.
Repayment of HDFC bank education loan must be done in Indian rupee after the end of moratorium period. The tenure of education loan from HDFC consists of Duration of the study + grace period after the study + repayment period. There are two ways of repayment: complete moratorium which means no payment of interest during the duration of the study; or principal moratorium which means simple interest payment during the duration of the study. In the first way, HDFC education loan interest repayment will start immediately after disbursement of the first installment. However, students should note that Estimated Monthly Installment (EMI) for the second way will be higher since the education loan from HDFC interest rate from the duration period will be compounded yearly.
Grace period is a period of 6 or 12 months after the completion of the course where repayment of the loan will not start. This is done to allow the student to find suitable placement opportunities and ease the transition from campus to corporate. The repayment period will start after the grace period where Estimated Monthly Installment (EMI), consisting of interest and principal, will be deducted from the bank account of the borrower/co-borrower using Electronic Clearing System (ECS).
HDFC bank offers a maximum tenure of 12 years, subject to factors like repayment capacity of the customer/s, future prospects of the course, age of the co‐applicant and risks involved in extending the loan. For students aspiring to study in United States, HDFC offers the choice of repayment from USA in US dollars.
A co-applicant is a close relative of the student who will co-sign the loan and act as the primary debtor. A co-applicant based in India is mandatory for obtaining an HDFC education loan. Co-applicant may be Father or Mother or Brother or Sister (married) or spouse of the student and his/her income would be considered in determining the loan eligibility of the applicant. Co-applicant’s liability is coextensive with the student and documentary proof must be provided to establish the relationship with the student. In case the collateral for obtaining HDFC bank education loan is not provided by one of the above relatives, following relatives could provide collateral after becoming co‐applicant(s):
Father‐in‐law or Mother‐in‐law or Sister‐in‐law or Brother‐in‐law
Maternal or Paternal Uncle or Aunt
Maternal or Paternal Grandparents
The application process of education loan from HDFC consists of the student filling the online application form, followed by a visit of the bank’s representative to collect supporting documents. A final review of the application and all the documents is done to verify the value of collateral and the creditworthiness of the co-applicant before granting the approval letter and/or disbursement of the first instalment.
After completion of the online or offline application form, the student is required to pay the origination fee, which includes all legal and registration charges. Bank will follow up with the student and co-applicant to answer any questions regarding HDFC bank education loan, and collect the signed application form along with supporting documents. The application for HDFC education loan depends upon the Credit Scoring Module which includes the following parameters:
Academics of Student
University and Course
After credit team underwrites the application, education loan from HDFC approval letter will be provided to the student upon completion of loan disbursement formalities like the signing of the loan agreement.
The in-principal sanction letter is provided in 7 to 10 days from the date of receipt of completed application form along with supporting documents. Disbursement of HDFC education loan would be completed within 7 days from the date of receipt of all post sanction documents by the customer.
For further assistance, aspirants interested in HDFC bank education loan can locate the nearest HDFC bank branch or visit the website for more information.
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