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  • State Bank of Patiala Education Loan

    State Bank of Patiala Education Loan
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    Overview:

    State Bank of Patiala was founded in the year 1917 by Bhupinder Singh, Maharaja of erstwhile Patiala State. The bank became a subsidiary of State Bank of India in the year 1960 and was renamed as State Bank of Patiala. Currently, the bank provides CBS in all its branches and is the first fully networked Public Service Bank in the country.

    State Bank of Patiala (SBP) extends financial assistance to deserving students for pursuing higher studies to shape their future and be successful in life. The bank offers multiple Education Loan schemes to suit the varied needs of every student.

    Purpose of State Bank of Patiala Education Loan:

    SBP’s Education Loan schemes give an opportunity to students to pursue education/higher studies, at affordable rates of interest, for various educational courses in India and abroad. To encourage students with varied interests, SBP offers ‘Education Loan Scheme for Vocational Education and Training’.

    To attend to the financial needs of students studying in the country’s premier management, medical, law, engineering colleges and other reputed institutes, SBP provides ‘Scholar Loans’.

    Features and Benefits:

    SBP Gyan Jyoti Scheme:

    This scheme provides financial assistance to students for pursuing educational courses in India and abroad.

    Expenses Considered for SBP Education Loan (Gyan Jyoti Scheme):

    • Fees payable to the student’s college/school.
    • Student’s hostel fees, provided he/she opts to stay in the residential campus.
    • Fee payable for the purpose of examination, library and laboratory.
    • Purchase of books, equipment, instrument and uniform required for the course pursued.
    • Cost of laptops/computers only if essential for completion of the course (maximum 20% of the total tuition fee payable for completion of the course).
    • Any caution deposit/refundable deposit/ building fund charged by the institution (maximum 10% of the tuition fee for the entire course).
    • For students studying abroad, travel expenses and passage money.
    • Cost incurred up to Rs. 50,000 for buying a two wheeler by/for the student’s use.
    • Other expenses incurred for completing the course. For instance, cost of project work, study tours, etc.
    • For students seeking admission under management quota seats (considered within the scheme), fees as approved by any Government approved regulatory or State Government for payment seats will be taken, subject to viability of repayment.

    Courses Eligible for SBP Education Loan (Gyan Jyoti Scheme):

    Studies in India:

    • Undergraduate courses like Bachelor of Arts, Commerce, Science, etc.
    • Postgraduate courses - Master’s degree and Ph.D
    • Courses in engineering, medical, agriculture, veterinary, law, dental, management, computers, etc.
    • Certificate courses in computers. The course needs to be conducted by a reputed institute and accredited to the Department of Electronics or institutes affiliated to a university.
    • Courses like ICWA, CA, CFA, etc.
    • Courses held in institutes like IIM, IIT, IISc, XLRI, NIFT, etc.
    • Courses offered in India by reputed foreign universities.
    • Evening courses conducted by reputed institutes.
    • Courses conducted by UGC/Govt/AICTE/AIBMS/ICMR approved institutes, bestowing the student with a diploma/degree.
    • Courses offered by reputed private institutions and any other national institutes.
    • Courses like Aeronautical, pilot training, shipping, nursing or any other discipline. These courses should be approved by the Director General of Civil Aviation/Shipping/Indian Nursing Council. It can also be approved by any other regulatory body.
    • Teacher Training course/Nursing course/B.Ed. conducted by Government (central or state) approved training institutions. Such courses should bestow the student only with a degree or diploma and not a certificate course.
    • Vocational Training and skill development study courses are not covered under this Education Loan Scheme. There is a separate scheme by SBP for such courses.

    Studies Abroad:

    • Professional and technical undergraduate courses offered by reputed universities. These courses need to be job oriented.
    • Post-graduation degrees like MCA, MBA, MS, etc.
    • Courses conducted by CPA in United States of America and CIMA in
      London.
    • Degree/diploma courses like aeronautical, pilot training,
      shipping, etc. The prerequisite being that these courses are recognised by
      competent regulatory bodies in India/abroad for the purpose of employment in India/abroad.
    • Post Graduate Diploma courses (professional/technical) offered by reputed universities. These courses need to be job oriented.

    Quantum of Loan Amount:

    The quantum of loan disbursed is classified on the place (India or abroad) of the course pursued, and is also subject to the repaying capacity of the parents/student.

    • For studies in India, the maximum loan amount that can be availed is Rs. 10 lakhs.
    • For studies abroad, the maximum loan amount that can be availed is Rs. 20 lakhs.

    SBP Education Loan Interest Rates:

    SBP Gyan Jyoti scheme is offered at affordable rates of interest for the convenience of students and parents. Female students are entitled to an additional concession of 0.50% on the existing interest rates. Simple interest is charged during the moratorium period. Parents with an income of up to Rs. 4.5 lakhs per annum, can enjoy an interest subsidy by the government, during the moratorium period.

    Loan Amount

    Interest Rates

    Up to Rs. 7.50 lakhs

    Base Rate + 2.75% = 12.85% (currently)

    Above Rs. 7.50 lakhs

    Base Rate + 1.75% = 11.85% (currently)

    Margin:

    • No margin is applicable on loan amount up to Rs. 4 lakhs.
    • 5% margin is applicable on loan amount above Rs. 4 lakhs, for studies in India.
    • 15% margin is applicable on loan amount above Rs. 4 lakhs, for studies abroad.

    Processing Fees:

    Processing fees/charges are not collected upfront for this scheme.

    For Education Loan to students studying abroad –

    • If the loan amount availed is more than Rs. 4 lakhs, a deposit of Rs. 50,000 needs to be paid.
    • For an individual availing an education loan under this scheme, an amount of Rs. 5000 will be adjusted against the contribution of payment of margin. If margin is not payable by him, the amount can be adjusted against the interest amount payable.

    Repayment Tenure:

    Repayment of the loan is to be made after completion of the moratorium period. Moratorium period = Duration of the course/course period + 1 year or 6 months after getting a job, whichever is earlier. The repayment tenure is explained in the table below –

    Loan Amount

    Repayment Tenure

    Up to Rs. 7.50 lakhs

    Up to 10 years

    Above Rs. 7.50 lakhs

    Up to 15 years

    Security:

    • No security is required for loan amounts up to Rs. 4 lakhs.
    • Collateral security (in the form of suitable third party guarantee) is required for loan amounts above Rs. 4 lakhs and up to Rs. 7.50 lakhs.
    • For loan amounts above Rs. 7.50 lakhs, tangible collateral security (of suitable value), along with the assignment of the student’s future income is required.
    • If the student is the borrower of the loan, it should be secured by parents/guardian of the former.

    SBP Education Loan (Gyan Jyoti Scheme) Eligibility:

    • The student/applicant should be a citizen of India.
    • Applicant/student needs to secure admission to the course (for which the loan is availed) through a formal entrance test/selection process, after completion of his/her Class 10 and Class 12 exams (or equivalent).
    • If a reputed institute doesn’t conduct a formal entrance test selection procedure, it is still considered eligible to avail the loan.

    Documents required:

    The following documents are required to apply for an Education Loan under SBP’s Gyan Jyoti Scheme –

    • Loan application form
    • Appraisal form
    • Guarantee agreement
    • Term loan agreement
    • Arrangement letter

    SBP Education Loan Scheme for Vocational Education and Training:

    Purpose of the Loan:

    To provide financial support to students with varied interests. The student availing the loan should have the minimum educational qualification required by the institute/organisation running the course eligible under this loan scheme.

    Features and Benefits:

    Quantum of Loan Amount:

    Quantum of loan disbursed is classified on the duration of the course. Please refer to the table below for a detailed account on the same.

    DURATION OF COURSE

    QUANTUM OF LOAN AMOUNT

    Up to 3 months

    Rs. 20,000

    3 to 6 months

    Rs. 50,000

    6 months to 1 year

    Rs. 75,000

    Above 1 year

    Rs. 1,50,000 to Rs. 2,00,000

    Repayment Period:

    The repayment tenure depends on the amount of loan availed. The loan amount needs to be repaid in Equated Monthly Instalments (EMIs). It is explained in the table below.

    Loan Amount

    Repayment Tenure

    Up to Rs. 50,000

    Up to 2 years

    Rs. 50,000 - Rs. 1 lakh

    2 - 5 years

    Above Rs. 1 lakh

    3-7 years

    Processing Fees:

    Processing fees is not collected upfront on Education Loans availed under this scheme.

    Rate of Interest:

    The rate of interest for loans availed under this scheme is 2.75% above the base rate. Currently, it is at 12.75% p.a.

    Eligibility:

    • Student/applicant should be a citizen of India.
    • The course needs to be supported or run by a ministry/government organization, an organisation supported by State Skill Mission/Corporation or National Skill Development Corporation.
    • The course should preferably bestow the student with a certificate or diploma degree.

    SBP Scholar Loan:

    Purpose of the Loan:

    SBP provides Scholar Loan to attend to the financial needs of students studying in the country’s premier management, medical, law, engineering colleges and other reputed institutes.

    Expenses Considered for SBP Scholar Loan:

    • Fees payable to the student’s college/school.
    • Student’s hostel fees, provided he/she opts to stay in the residential campus.
    • Fees payable for the purpose of examination, library and laboratory.
    • Purchase of books, equipment, instrument and uniform required for the course pursued.
    • Cost of laptops/computers only if essential for completion of the course.
    • Any caution deposit/refundable deposit/ building fund charged by the institution. Needs to be supported by receipts. This cannot exceed 10% of tuition fee for the entire course.
    • Travel expenses and expenses incurred while on exchange programme.
    • Any other expenses related to education/course.

    Courses Eligible for SBP Scholar Loan:

    • Scholar Loan is offered for regular full time degree/diploma courses.
    • Admissions for the course need to be through a formal entrance test.
    • Full time executive management courses like PGPX, IIMs.

    Quantum of Loan Amount:

    The amount of loan disbursed is classified on the category of the institute and with or without tangible collateral. The table below explains this is detail.

    Category of Institutes

    Maximum Loan Limit

    (Without any tangible collateral, only parent/ guardian as co-borrower)

    Maximum Loan Limit

    (With tangible collateral of full value and parent/ guardian as co-borrower)

    List 'AA'

    Rs. 30 lacs

    Rs. 30 lacs

    List 'A'

    Rs. 20 lacs

    Rs. 30 lacs

    List 'B'

    Rs.20 lacs

    Rs.20 lacs

    List 'C'

    Rs. 7.5 lacs

    Rs. 30 lacs

    The rate of interest charged depends on the category of the institute. Please refer to the table below for a detailed account of the same.

    Rate of Interest:

    Category of Institute

    Rate of Interest

    List ‘AA’

    Base Rate + 0.50% = 10.60% (at present)

    List ‘A’

    Base Rate + 0.50% = 10.60% (at present)

    List ‘B’

    Base Rate + 0.50% = 10.60% (at present)

    List ‘C’

    Base Rate + 1.75% = 11.85% (at present)

    Repayment Tenure:

    • The repayment period is flexible up to 7 years after the start of repayment.
    • Moratorium period is up to the course duration plus 6 months.

    Security:

    For category ‘AA’ institute

    • Up to Rs. 30 lakhs with parent/guardian as co-borrower – No tangible collateral.

    For category ‘A’ institute

    • Up to Rs. 20 lakhs with parent/guardian as co-borrower – No tangible collateral.
    • Up to Rs. 30 lakhs with parent/guardian as co-borrower – Tangible collateral of full value.

    For category ‘B’ institute

    • Up to Rs. 20 lakhs with parent/guardian as co-borrower – No tangible collateral.

    For category ‘C’ institute

    • Up to Rs. 7.50 lakhs with parent/guardian as co-borrower – No tangible collateral.
    • Above Rs. 7.50 lakhs and up to Rs. 30 lakhs with parent/guardian as co-borrower – Tangible collateral of full value

    Documents Required:

    The following documents are required to avail the SBP Scholar Loan –

    • Admission letter from the institute
    • Duly filled registration form
    • 2 passport size photographs of the student
    • Proof of identity as issued by the government
    • Proof of residence
    • Student/parent/co-borrower’s bank account statement for the last 6 months
    • IT returns of last 2 years
    • Statement of expenses

    SBP Coaching Fee Loan Scheme:

    • This loan scheme offers financial assistance to finance the tuition fees while enrolling into institutes giving coaching for professional course entrance exams like CAT, MAT, CET, IIT, JEE, UPSC, etc.
    • Finances lodging/hostel/ paying guest and other forms of accommodation for the student, during the period of coaching. This is applicable only if the student is required to stay away from his residence. This amount can’t exceed 75% of the loan amount sanctioned.
    • Finances deposit amount for seat allotment while attending counselling.
    • Covers the cost of books, laptops if required for preparation of the entrance exam. This amount can’t exceed 25% of the tuition fee.
    • Student availing the loan needs to complete his/her previous qualifying exam.
    • The loan applicant should be the student’s parent, guardian or spouse. They should have a verifiable income and loan repayment capacity.
    • The student does not need to join as an applicant/co-applicant for this loan scheme.
    • The repayment period cannot exceed the parent’s/guardian’s retirement age.
    • The minimum loan amount offered is Rs. 25,000 and maximum is Rs. 2 lakhs.
    • The loan margin is 10% of the tuition fee as specified by the fee structure of the coaching institute.
    • The interest rate is Base Rate + 2.75% = 12.85% p.a.
    • No processing fee is charged on this Education Loan scheme.

    State Bank of Patiala Education Loan FAQs:

    1. Is moratorium/repayment holiday available on SBP’s Education Loan?
    2. Yes, a moratorium repayment holiday is available on select courses on SBP’s Gyan Jyoti Scheme. Moratorium Period is a holiday on repayment which would be for the course period + 1 year or 6 months after the student gets a job/starts earning whichever is earlier. Some banks allow you a moratorium on payment of interest which allows you to defer payments of even the interest during this period. In this case the interest is compounded quarterly and added to the principal sum for repayment. Though this option comes with a higher rate of interest, but is convenient for those who cannot repay the loan during the course.
    3. Is it a must to have a co-applicant to avail SBP’s Education Loan?
    4. Yes, a co-applicant is required to avail an education loan for all full-time courses. The co-applicant should be parent(s)/guardian of the student. If the student is married, the co-applicant can be spouse or the parent(s)/parents-in-law.
    5. Can I apply for a SBP Education Loan Online?
    6. Yes, PSB Education Loan can be applied online. Please download the application form available on the bank’s website. Once filled up duly, you can submit it to the nearest branch with all necessary documents.
    7. Are female students eligible for any concession on SBP Education Loan?
    8. Yes, female students get an additional concession of 0.50% on the existing interest rates.
    9. What is the interest subsidy available on SBP Education Loan?
    10. If parental income is up to Rs. 4.5 lakhs p.a, the Government gives an interest subsidy during the moratorium period.
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