• Marksheet Loan

    Many times, students in spite of having good grades and capability, fail to pursue higher education in their desired institutes due to financial constraints. The cost of studying in top institutes, whether in India or abroad, is getting really expensive these days. As a result, students who don’t belong to well-to-do families find it difficult to meet the high costs and compromise with their dream of studying in recognised colleges and universities.

    Considering this requirement, the government, as well as the private banks, have launched a scheme under which the toppers and other students are provided with a loan to back up the expenses of studying in their dream institutes. With a marksheet loan, you can apply for taking admission in any university across the world without worrying about the expenses.

    What is marksheet loan?

    Marksheet loan, also known as education loan or student loan, is a special scheme through financial organisations provides funding to the applicants for pursuing higher education. It is introduced to help the meritorious students of the country who are unable to bear the cost of higher studies. Under this scheme, students with high grades and academic qualification get finance to study in leading educational institutes and universities in India and abroad. In other words, marksheet loans taken from any national or trusted private bank negate all your monetary fears and enable you to fulfill the desire of studying in a prestigious college. The basic eligibility criteria for this loan is the educational achievement of the students as per the mark sheets of their previous exams. In order to ensure that financial help reaches the deserving students, banks assess the candidates’ eligibility on the basis of their academic performance. That is the reason why this special loan is also known as a marksheet loan.

    Many people think that the banks take the mark sheets as security while offering this loan. But this is not true as no Indian bank offer loan against marksheet as security. The students only have to submit the copies of the marksheet along with other documents and the proof of admission to other universities to get the loan. Since marksheet loans are focused to help students manage the cost of higher studies, a good amount of money is offered to the worthy candidates along with flexible terms and conditions. The process of loan application is easy and the approved amount is disbursed to the candidates within a short duration. Persons who are employed but want to pursue further studies are also eligible to get this loan.

    Top Indian Banks that offers marksheet loan

    • State Bank of India
    • HDFC Bank
    • Axis Bank
    • Canara Bank
    • SBBJ
    • Union Bank
    • UCO Bank
    • Bank of Baroda
    • Punjab National Bank
    • Non-Banking Finance Company (NBFC)

    Marksheet loan interest rates 2022

    State Bank of India 6.85% p.a. to 8.65% p.a.
    HDFC Bank 9.55% p.a. - 13.25% p.a.
    Canara Bank 8.75% p.a. to 9.25% p.a.
    Union Bank of India 6.80% p.a. to 10.05% p.a.
    UCO Bank 7.30% p.a. to 9.70% p.a.
    Bank of Baroda 7.60% p.a. to 9.70% p.a.
    Punjab National Bank 6.90% p.a. to 9.55% p.a.
    Axis Bank 13.70% p.a. - 15.20% p.a.

    What are the interest rates?

    Various banks have their own interest rates on the loan amount. The interest rate is usually considered as the sum of the base rate and markup. The base rate is usually around 8% to 10%. So, the interest rate depends on banks to banks, ranging between 6.85% and 15.20%. The interest rates are also dependent on the loan amount and the college or university in concern.

    Courses covered under marksheet Loan

    • Graduation, Post-graduation/Degree/Diploma courses from renowned colleges or universities approved by UGC/ AICTE/IMC/Govt. etc.
    • Regular Degree and Diploma courses conducted by leading autonomous educational institutes such as IIM, IIT etc.
    • Educational disciplines including Engineering, Management, Medicine, Computer science, Pure Science, Architecture, Agriculture, Hotels and hospitality, Fine arts and design etc.
    • Technical and vocational training courses such as aviation, air-hostess, shipping, nursing, teacher training etc.

    Expenses covered by marksheet loan

    Marksheet loan covers the following expenses:

    • 100% of the payable college tuition fees
    • Accommodation charges, if any
    • Books and equipment
    • Library fees
    • Examination fees
    • Travelling expenses for studying in abroad, if any
    • Cost of two-wheeler
    • Other miscellaneous expenses necessary to ensure completion of course

    Eligibility criteria

    • The applicant should be resident of India who has secured admission in renowned colleges or universities in India and abroad.
    • The candidate should be within the range of 18 to 35 years at the time of taking the loan.
    • The applicant must be pursuing graduate or postgraduate degree and PG diploma.
    • He/she must have a confirmed admission in a college/universities recognised by UGC/Govt./AICTE etc.
    • Candidates applying for full-time courses must have a co-applicant who can be the parent/guardian/spouse/parent-in-law (if married).

    Documents required to apply marksheet Loan

    • Properly filled Loan Application Form
    • Letter of admission
    • Copy of 10th/12th mark sheet or latest education certificate
    • Statement of cost of study
    • 2 passport size photographs
    • Pan Card and Aadhaar Card of the student and Parent/ Guardian

    Identity proof

    • Driving License/Voter ID/Passport/Aadhaar Card (Copy of any one)

    Address proof

    • 6 months bank account statement of the student or guarantor or co-borrower/Rental agreement/Ration card/Electricity Bill/Tel Bill/Gas Book (Copy of any one of these)

    Income proof

    • Latest salary slips or Form 16 of the parent/ guardian/ co-borrower
    • Last 6 months bank statement or updated bank passbook
    • Updated 2 years ITR (Income Tax Return with income computation) or Last 2 years IT assessment order of parent/guardian/co-borrower
    • Statement of the assets and liabilities of the parent/guardian/co-borrower

    Loan quantum

    The quantum of mark sheet loan are:

    • Up to Rs.10 lakh for studying in India
    • Up to Rs.20 lakh for studying abroad

    Note: In special cases at bank’s discretion, a higher amount is lent to the applicants.

    Loan margin money

    Loan margin means the amount of the total cost that the candidate or his/her family has to bear. The loan margin money for a marksheet loan is absolutely Nil for candidates applying for a loan of up to Rs.4 lakh or less. For applicants who are studying in India at a loan above Rs.4 lakh has margin money of 5%. But for abroad applicants, the margin money on a loan of above Rs.4 lakh is 15%.

    Time of loan approval

    The approximate time required for the approval of the loan is 15 working days that is calculated right from the receipt date of the application. The receipt is the guarantee that the application is completed in all aspects.

    Security/collateral required get a loan

    The security of the loan is dependent on the quantum or required loan amount and the credit value of the principal borrower. The collaterals that are accepted are fixed deposit, residential property which can be a house, apartment or flat, non-agricultural land or life insurance that has an assured sum of 100% of the marksheet loan amount.

    Here are the security/collateral which are accepted for marksheet loan:

    A loan amount up to Rs.4 lakh – If the parents are a joint borrower, no security is required.

    Loan amount between Rs.4 lakh-Rs.7.5 lakh – As a third party guarantee, the security of parents should be guaranteed.

    Loan amount above Rs.7.5 lakh – Parents have to be the joint borrowers along with a tangible collateral security of the sum of 100% of the loan amount required.

    Loan disbursement process

    The marksheet loan will be disbursed either in installments or in full payment keeping in account the amount of fund to be disbursed along with the fee schedule as reviewed by the bank directly to the mentioned educational institute.

    Loan tenure

    The loan tenure for a loan of up to Rs.7.5 lakh and more is around 15 years. It is within this loan tenure, that the candidate applying for the loan has to complete all the repayment processes of the loan and so on before the last date.

    Loan repayment duration

    The ideal repayment duration of the marksheet loan is the sum of the course period and 1 year or 6 months after getting a suitable job, whichever is earlier.

    What is the role of the guardian?

    In the loan processing, the role of the parent(s) or guardian of the applicant is considered as a co-applicant in respect of the student loan. Here the guardian plays the role of the primary debtor.

    Tips to get interest rates on Marksheet Loan

    If you want to get a marksheet loan, then you can follow the below-mentioned tips:

    • First of all, talk to your educational institution whether they have any specified lender who can provide negotiated rates for the loan. If not, ask if they have got a pre-approved loan process to make the loan sanction process easier than any other lender outside.
    • Just in case, if you plan to move out abroad, ask your institution whether it is possible to get a loan on campus, only after you have registered for the course. Going abroad can help you get better interest rates too. For example – The basic interest rates in the US and UK is considered lower than that of India presently.
    • In order to get low interest along with faster approval, good terms with the bank’s branch manager can help. For instance, if anybody from your family or you is a regular visitor at the local branch of the bank, you can use this as an advantage. The branch manager can help you in getter better loan terms with quick disbursal.

    Marksheet Loan & Banks perspective

    It is said that loans cannot be claimed as an affair of right because a loan is considered as a debt. The borrower has to repay back the amount to the lender within the specified period of the loan tenure.

    According to the Indian Banks, the reported outstanding loan is near about Rs.50,000 crores. Marksheet loans should be encouraged as they are treated as an investment for the growth of economic development and prosperity. It is a sign of a developing/developed country.

    Indian Banks’ Association (IBA) Guidelines

    Some rules that are followed by the banks under the IBA guidelines are as follows:

    • Students admitted in reputed institutes by a merit-based selection procedure are eligible for the marksheet loan.
    • Banks should assess the employability of the student after the completion, of course, to ensure whether or not the marksheet loan is to be provided to the student.
    • The rating of the educational institutes along with the merit ability of the student is assessed to improve asset quality provided by the banks.

    So, a marksheet loan can help you get up to Rs.10 lakh to study in the country and up to 20% for studying in any institute or university outside the country. Some banks, in certain cases, pay even more than this amount. Whether you are a student, unemployed or salaried professional, if you are pursuing higher education in the prestigious colleges in India or abroad you can get a personal loan at a very low-interest rate.

    So, it can be safely concluded that marksheet loan is shaping the future of the students who are looking for a financial aid to continue their education until they get hold of a job. This has not only become a very popular loan option among the students but it is also upgrading the educational system of the country.

    FAQs on Marksheet Loan

    1. Are there any charges levied for late payment of marksheet loan EMIs?

      In the case of late payment of EMIs, lenders do levy a penalty. Depending on the lender, the penalty that will be levied will vary.

    2. In case I have availed an education loan with fixed rates, can I convert it to floating rates?

      Yes, you can convert fixed rates to floating rates after agreeing to the terms and conditions provided by the lender.

    3. Will I be able to pre-close the loan?

      Yes, you can pre-close the loan at any time during the loan tenure.

    4. Who are the individuals that can be co-applicants in marksheet loan?

      The below-mentioned individuals can be co-applicants:

      • Grandparents
      • Parents-in-law
      • Spouse
      • Sister
      • Brother
      • Parents
    5. Is it possible to increase the tenure of the loan?

      In case the course is extended by the university, the tenure of the loan can be increased.

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