Personal Loan for IIM Students
With the rising costs of education for graduate and postgraduate courses, it is becoming increasingly difficult for parents of students belonging to the middle and lower strata of the economy to come up with the requisite funds to cover education expenses. This is where student loans from various banks and financial institutions can come to your rescue.
Almost all banks offer student loans to those with a provable track record of performance in the academic field. Most banks are ready to offer upto Rs.30 lakh to finance the education of a student. If you are an IIM aspirant, however, this amount won't be enough to cover the bulk of your fees. So quite a few banks offer special loan facilities for students qualified for admission at IIMs.
Loans for Premier Institutions like the IIMs
The various Indian Institute of Management institutes are undoubtedly some of the finest in India and have some of the steepest tuition fees for their flagship programs. In the past 2 years, 7 out of the 19 IIMs have hiked their fees between 5% and 29.6%.
The fee structure at IIM Ahmadabad for its basic PGP course is currently Rs.19.5 lakh, Rs.18.7 lakh at IIM Bangalore and Rs.19 lakh at IIM Calcutta. These numbers do not account for peripheral costs like hostel fees, mess fees, taxes etc. which can shoot up the cost even further.
Getting a loan to cover your expenses at IIMs, therefore, is a better idea than paying lakhs at a time. Most IIMs have a list on their websites of financial institutes that offer loans for studying at their institute.
Key Features of Premium Education Loans
- Maximum loan for IIM students can range from Rs.20 lakh to Rs.30 lakh
- There's a moratorium period on every loan, and you have to start paying back the loan only once the moratorium period ends.
- No collateral is required for most premier loans. However, parents are required to become a guarantor/co-borrower in most cases.
- There's a payback period of 15 years on such loans, and usually zero prepayment charges are applied.
- The margin is either very low or nil in case of premium education loans.
- Tax benefits can be availed on the EMI paid under Section 80E of the Income-tax Act, 1961.
- 0.5% rate concession on loans for female students.
Comparison between various Bank Loans
Bank/Loan | Max Amount | Rate of Interest | Security | Margin | Moratorium Period | Repayment Period | Processing Fees |
IDBI Bank Premier Education Loan | Rs.20 lakh | Base rate = 9.65% |
| 5% above Rs.4 lakh | Course duration + 1year/6 month of getting a job, whichever earlier |
| Nil |
OBC's Customized Education Loan Scheme IIMs, IITs & XLRIs | Rs.15 lakh | Up to 10.50% | Parents/Guardians as co-borrower | Nil | Course period + Grace period based on predefined conditions |
| Nil |
SBI's Scholar Loan | Rs.40 lakh | Up to 10.20% | Parents as co-borrower | Nil | Course period + 1 year | 15 years | Nil |
CBI's Special Education Loan Scheme to IIM Students (Cent Vidyarthi for IIM Students) | Rs.30 lakh | MCLR = 12 Month | Assignment of future income | Nil | Course period + 1 year | 15 years | Nil |
BOI's Exclusive Education Loan Scheme for Students of Premier Educational Institutions | Rs.20 lakh Rs. 30 lakh with 100% tangible collateral | MCLR = 9.25% | Assignment of future income + parents as co-borrower | Nil | Course period + 1 year | 15 years | Nil |
Union Bank's Special Education Loan Scheme | Rs.30 lakh | 8.10% | Parents as co-borrower | Nil | Course period + 1 year | 15 years | Nil |
Axis Bank's Education Loan | Rs.20 lakh | 8.85% | Collateral or guarantor depending on case-to-case basis | 5% above Rs.4 lakh | Course period + 1 year | 15 years | Nil |
UCO Bank's Super Premier Educational Loan Scheme | Rs.30 lakh | 8.40% | Nil | Nil | Course period + 1 year | 15 years | Nil |
The interest rate of premier education loans is actually less than the rates for Type B or C institutions. Almost all banks offer premier loans on zero margin, making not just the tuition fees, but the accommodation and other necessities affordable as well. So if you are thinking of giving up on your dream of studying at any of the IIMs, remember that loans for IIM students are just a click away.
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