Central Bank of India was established in 1911 and was the first commercial bank in India to be wholly managed by Indians. Central Bank of India caters to a diverse clientele by offering banking and financial services including agri banking, MSME services, deposits, loans and NRI banking. Education loans offered by Central Bank of India, CentVidyarthi, empowers meritorious students to pursue a professional course of their choice without money being a constraint.
Features and Benefits of Central Bank of India Education Loan:
Central Bank of India offers education loan for pursuing higher studies at educational institutions in India and abroad. The following are the features of Central Bank of India education loan.
- Expenses considered for Central Bank of India Education Loan The expenses that will be covered under the loan will include the fees payable to college, hostel fees. Examination & laboratory fees, travel expenses & passage money for studies abroad, caution deposit, building fund or refundable deposits with bills, cost of books, equipment & instrument costs. Any other expenses required to complete the coursework like study tour costs, project work cost will also be covered. The scholarships and fee waivers available to the student will be taken into account while computing the loan required.
- Amount of Education Loan A maximum loan amount of Rs.10 lakh is offered for studies in India. For studies abroad, the loan amount is capped at Rs.20 lakh. However, regional managers can consider higher loan quantum depending on the course basis and subject to condition that the loan amount should be backed by 100% collateral security.
- Interest Rates
Base Rate + 2.00%
Female, SC, ST & students admitted to IIM/IIT
Base Rate + 1.50%
- Processing Fees Central Bank of India charges no processing fees and upfront charges for education loans in India. For studies abroad, a fee of Rs. 500 is charged for loan amounts up to Rs.10 lakh. For loan amount exceeding Rs.10 lakh, a fee of Rs.1000 will be levied. The fees will be refunded within 6 months of the loan being sanctioned.
- Repayment Tenure The repayment of Central Bank of India Education Loan will commence 12 months after the course completion or 6 months after securing a job, whichever is earlier. For loans up to Rs.7.50 lakhs, the maximum repayment period is 10 years. The maximum repayment tenure is 15 years for loans above Rs.7.50 lakh. The repayment is done on easy monthly instalment basis.
- Security For loans up to Rs.4 lakhs
- Margin For loans up to Rs.4 lakhs, there is no margin. For loan amounts above Rs.4 lakhs, the margin is 5% for studies in India and 15% for studies abroad.
Parent or guardian is to be the joint borrower for the loan. Also, the future income of the student is to be assigned to the branch for payment of loan instalments.For loans above Rs.4 lakhs and up to Rs.7.5 lakhs
Besides parents or guardian being the joint borrower and assignment of income, a third-party security will be taken as collateral security. If satisfied with the net-worth of the joint borrower, the bank manager may waive off the security.For loans above Rs.7.5 lakhs
Parent or guardian should be the joint borrower and future income of the student is to be assigned to the branch. Also, a tangible collateral security of minimum value equal to the loan amount is to be made.
Eligibility & Documentation for Central Bank of India Education Loans
In order to be eligible for Central Bank of India education loan, the applicant must satisfy the following conditions.
- The applicant should be an Indian National.
- The applicant should have secured an admission to a professional course in approved institutions in India or abroad through a merit based selection process after completion of SSC or HSC.
- When there is no merit based selection process involving an entrance test and the admission is based on marks secured in qualifying examinations, the applicant must have scored at least 50% mark in the qualifier test.
- In cases where an entrance exam or a qualifying exam is not the criteria for admission (ex- research programs), the loan eligibility is based on the employability and reputation of the institution.
The following documents will be required to procure an education loan from the Central Bank of India.
- Address Proof like Utility bills, Ration card, Voter ID
- Identity proof like PAN Card, Voter ID, Passport
- Income documents like income tax return statements, salary slips and income proof as authorized by a CA, Form 16 and Form 60
- Educational documents like HSC and SSC certificates, mark sheet etc.,
Do ask the bank about the complete set of documents that are required for your course to avail an education loan.
Interest Subsidy Scheme for Education Loan:
For students from economically weaker sections with gross annual income of parents not more than Rs.4.50 lakhs, the ministry of HRD has come with an interest subsidy scheme. Under this scheme, interest subsidy is provided for 12 months after the completion of course or six months after securing a job, whichever is earlier.
Some salient features of this scheme are as follows.
- This interest subsidy scheme is available to the eligible students only once whether for the first undergraduate course or the postgraduate course in India.
- This scheme cannot be availed by students who discontinue the course midstream or who are expelled from the university on disciplinary or academic grounds.
- If the discontinuation is due to medical reasons, relevant medical documents has to be submitted to avail the benefits of this scheme.
- The maximum eligible loan amount to avail the central scheme for interest subsidy on education loans is Rs.10 lakhs.
Central Bank of India Education FAQs:
- I have secured admission to a profession course under the Management Quota as offered by the college. Can I avail Central Bank of India’s education loan? Yes. Education loans under management quota are considered based on the employment potential and the reputation of the institution. Also, it should be ensured that the student has the financial resources to meet the funding gap between management seats and government approved fees structure.
- Am I eligible for Central Interest subsidy scheme if I procure an education loan under management quota? No. Education loans under management quota are not eligible for interest subsidy scheme of MoHRD.
- Do I require a life insurance policy while applying for a loan? Yes. You need to have a comprehensive life insurance policy equivalent to the loan amount for a minimum period covering the loan term, course term and moratorium period. The insurance policy should be assigned in favour of the bank.
- What is the disbursal mode for Central Bank of India’s education loan? The payment will be directly disbursed to the college, mess or airlines on submission of original receipts. Only in selected cases, the disbursement will be made to the borrowers subject to suitable evidence.
- Can I avail any interest concession on Central Bank of India education loan? Yes. 1% interest concession is offered by the bank during the study period if the interest is serviced during the same period and moratorium period before the commencement of repayment.
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