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  • Tamilnad Mercantile Bank Short Term Study Loan

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  • The TamilNad Mercantile Bank, or TMB offers short term study loans to customers among various other products. The scheme is ideal for parents looking to fund higher education of their children in India or abroad. The fund aims to cover the cost of education of the future generations through low interest funds.

    Where can I use the loan amount

    The loan amount can be used to secure admission in a school, college or university for school education, diploma, graduation and post-graduation courses. The following expenses can also be covered through the loan amount:

    • School, college and hostel fees.
    • Laboratory, library and examination fees.
    • Uniform, instruments, equipment and book purchases.
    • Refundable deposit, building fund and caution deposit subject to producing respective bills and receipts.

    Who can avail this loan

    Students enrolled in the following programs can avail Short Term Study loan from TMB.

    • Indian nationals only can apply.
    • School education till +2.
    • Arts, science, diploma courses for graduation.
    • Evening courses from specified institutions.
    • Courses leading to degree, diploma etc. offered by universities or colleges approved by AICTE, UGC or the Government.

    What is the maximum amount of loan I can avail

    You can avail a maximum of Rs.25,000 or 3 months’ gross salary of the parent, whichever is lower.

    What is the rate of interest on TMB short term study loan

    TMB short term study loan is a low-cost loan. The rate of interest here is:

    BR + 3.75% = 14.15% p.a. (Base Rate as of November 2015 is 10.40% p.a.)

    What are the terms for TMB short term study loan

    • The parent’s proof of income as well as certificate from employer stating the effective take home salary needs to be submitted with the application.
    • Undertaking from the employer stating that the owed monthly instalment amount will be deducted from the parent’s salary every month.
    • A penal interest rate of 2.00% p.a. is applicable on defaults on EMIs.
    • Loan disbursal will be made as per requirements. Disbursal can be directed towards institutions, book vendors, equipment and instrument sellers and so on.
    • Repayment tenure is available for a maximum of 10 to 12 months.
    • There is no moratorium period in this loan.
    • Processing fees of 1.00% of overall loan amount without any upper ceiling.

    How do I apply for this loan

    You can apply for this loan by downloading and filling up the application form available online as well as at any of the branches of TMB.

    Can I apply for the TMB short term study loan online

    Currently the bank doesn’t support online applications. However, you can download the application form online and fill and submit the same at any of the branches of TMB.

    What are the tax benefits on this loan

    The full amount of student loan interest (not principal) repaid in a year can be claimed as deductions under Section 80E of the Income Tax Act, 1961. The applicant on whose name the loan is sanctioned can only benefit from the deduction.


    Suppose you have been sanctioned a loan of Rs.25,000 under this scheme which has to be repaid in 12 monthly instalments at most. Your EMI calculations will be as follows:

    • Amount: Rs.25,000
    • Repayment tenure: 1 year (12 months)
    • Interest: 14.15% p.a.
    • Processing charges: 1%

    EMI: Rs.2,265

    • Total principal due: Rs.25,000
    • Total Interest due: Rs.1,957
    • Processing fee: Rs.250
    • Total amount payable: Rs.27,207

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