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  • Union Bank of India Education Loan

    Union Bank of India Education Loan
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    Union Bank is one of India’s most prominent government owned banks which was established in the year 1919. The bank enjoys a widespread presence not only in India but also in countries like UAE, Abu Dhabi, Beijing, Sydney, London, Shanghai, Belgium, etc.

    Under its personal banking arm, Union Bank of India offers Union Education which is essentially an education loan meant for all those who wish to borrow funds in order to pursue higher education in India or abroad.

    Features / Benefits of the Union Bank Education Loan:

    This education loan is designed for all individuals who wish to pursue basic education, graduation / higher education or any technical / professional / management course by recognized institutions in India or overseas.

    Quantum of Loan:

    For studies in India, the maximum quantum of loan which can be obtained is Rs 10 lakhs. For studies abroad, the quantum of loan is capped at Rs 20 lakh.

    Repayment Tenure:

    Quantum of Loan

    Maximum Repayment Tenure

    Up to Rs 7.50 lakh

    10 years

    Above Rs 7.50 lakh

    15 years

    The moratorium period allowed with this loan can either be for the duration of the course period + 1 year or 6 months after getting a job, whichever occurs earlier.

    Interest Rates:

    The following tables list out the Union Bank Education loan interest rates not only for higher education as well as vocational training for male and female students.

    Quantum of Loan

    Interest Rate (Male students)

    Interest Rate (Female students)

    Up to Rs 7.50 lakh

    12.25% (fixed)

    11.75% (fixed)

    Above Rs 7.50 lakh

    12.00% (fixed)

    11.50% (fixed)

    For Vocational Education & Training

    Male students

    11.75% (fixed)

    Female students

    11.25% (fixed)

    Processing Fees:

    This loan does not carry any processing fee.


    For loans up to Rs 4 lakhs, no margin is required. However, for loans above Rs 4 lakhs taken for studies in India, a margin of 5% is required, while a margin of 15% is applicable if loan is taken for studies abroad. Any assistantship / scholarship secured will be included in the margin.


    Quantum of Loan

    Security Required

    Up to Rs 4 lakh

    No security required

    Above Rs 4 lakh & up to Rs 7.50 lakh

    Suitable third party guarantee which is acceptable to the bank

    Above Rs 7.50 lakh

    Tangible collateral security which is equal to the loan amount + interest combined, payable for the duration of the course and moratorium period, which is acceptable to the bank.

    Please note, for all the above cases, the parent/spouse must be the co-applicant of the loan.

    Union Bank Education Loan Eligibility:

    In order to apply for the Union Bank education loan, the applicant must fulfil the following conditions:

    • Must be an Indian citizen
    • Applicant must have gained admission to a recognized institute in India or abroad through an appropriate standardized selection process or by clearing the concerned qualifying examination.

    Union Bank Education Loan Course Eligibility:

    Following is the broad category of courses which are eligible under the Union Bank education loan.

    In India:

    • Graduation / Post Graduation / Diploma courses offered by recognized universities / colleges.
    • Technical / management / professional courses

    Outside India:

    • Graduation / Post Graduation / Diploma courses offered by recognized universities / colleges.
    • Certified degree courses offered by recognized institutes like CIMA (London) and CPA (USA) and such others.
    • Diploma courses offered outside India are not eligible for this loan.

    Documentation Required for Union Bank of India Education Loan:

    To apply for the Union Bank of India Education Loan, applicants need to furnish the following documents.

    1. Proof of identity – Passport, PAN Card, Employee Identity card or any other valid proof
    2. Proof of address - Electricity bill, Telephone bill, Ration card or any other valid proof.
    3. PAN Card
    4. Bank statement for the last 12 months
    5. Admission documents, Admission Letter, Admit Card.
    6. Schedule of expenses including the fee structure and living expenses.
    7. Mark sheets for Class X or equivalent onwards.
    8. 3 photographs
    9. Proof of any out-goes
    10. Loan repayment statement (If any)
    11. LIC Policies (If any)
    12. Any other document asked for in the application form
    13. Proof of Income:
      • Salaried Individuals - Last one year’s Income Tax Returns, Form-16 / letter from employer, salary slips for the last 6 months.
      • Business Owners – Income Tax Returns for the last 3 years, Profit & Loss Balance Sheet.
      • Agriculturists – Income Certificate from concerned revenue officer (Tahsildar) or/and proof of land holding.

    Subsidy Schemes for Union Bank Education Loan:

    1. Central Scheme for Interest Subsidy (CSIS):
    2. The Central Scheme for Interest Subsidy (CSIS) has been introduced by the Government of India in order to make quality education available to students belonging to the economically weaker sections of the society. The purpose of this scheme is to decrease the interest liability of individuals who have taken an education loan from any scheduled bank / regional rural bank (RRB) in order to pursue an approved technical / professional course from any recognized institution in India. Only students belonging to weaker sections of the economy, where the maximum annual family income is Rs 4.5 lakhs, at the time of availing the loan, are eligible to apply for this scheme.
    3. Padho Pardesh:
    4. The Padho Pardesh Scheme too has been introduced with the purpose of providing subsidy on interest for education loans for pursuing studies abroad. This subsidy scheme is designed especially for meritorious and deserving students belonging to the economically weaker sections of minority communities. In order to be eligible for this scheme, students must fulfill the following criteria:
      • They must have secured admission to approved courses at the Masters, M.Phil and Phd level.
      • Applicant must have taken a loan from a scheduled bank under the education loan scheme of the Indian Banks’ Association (IBA).
      • The income ceiling of the applicant’s parents/guardians in this case must not exceed Rs 6 lakhs per annum and proof for the same must be submitted in form of an Income Certificate issued from the concerned authority of the state / Union Territory.
    5. Special Education Loan Scheme:
    6. This loan scheme has been introduced for students who wish to pursue higher education at prestigious B-schools in India like IIMs, XLRI, SPJIMR and MDI. This scheme offers the following special features:

      1. Floating rate of interest with a Base Rate of 10.25%.
      2. No margin applicable on loan amount with this scheme.
      3. Applicants have the option to avail the loan either from their city of residence or the city where their educational institute is located.
      4. Avail a loan for up to Rs 20 lakh.
      5. No collateral security required.

    Union Bank Education Loan FAQs:

    1. How is the interest calculated on the Union Bank Education Loan?
    2. Interest on this loan will be calculated based on the reducing balance method at monthly intervals. No compounding interest will be charged during the moratorium period.
    3. What are the methods by which I can repay my Union Bank Education Loan?
    4. Your Union Bank education loan will be repaid in equated monthly installments (EMIs) in any of the following ways: (i) By authorizing your bank to directly debit the EMI amount from your Union Bank of India Savings account; (ii) Via the internet banking facility available on your Union Bank of India savings account; (iii) ECS (Debit) facility or (iv) By issue of Post Dated Cheques (PDCs).
    5. Is it necessary to have a guarantor while applying for a Union Bank Education Loan?
    6. Yes, the bank requires that the parent/guardian of the student applicant must join as co-borrowers on the loan
    7. How long will it take for my Union Bank education loan to be approved?
    8. After the necessary documents have been submitted with the bank, it takes approximately 7 days for the loan to be sanctioned.
    9. Does an applicant need to open an account with Union Bank in order to apply for their education loan?
    10. No, it is not mandatory for an applicant to open an account in order to apply for the Union Bank Education Loan.
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