• 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%
    • Rs.4 lakh to Rs.10 lakh - Third party guarantor
    • Above Rs.10 lakh - Tangible collateral
    5% above Rs.4 lakh Course duration + 1year/6 month of getting a job, whichever earlier
    • Below Rs.7.5 lakh - 10 years
    • Above Rs. 7.5 lakh - 15 years
    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
    • Upto Rs.7.50 lakh - 10 years
    • Above Rs.7.50 lakh - 15 years
    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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