Education Loan Interest Rates 2020561 views
- Federal Bank Education Loan for the higher education of students
- Interest rate starts from 10.25% per annum
You can apply for a loan from the Federal Bank to finance your higher studies in India or abroad. The loan is approved quickly with minimum paperwork. As a student, you just need to secure admission to a reputed institution or college, the rest will be taken care of by the Federal Bank Education Loan. And using it, you can do what you wished for by having a suitable amount for the admission. The interest rate is affordable for the customers which make it easy for them to pay the borrowed amount in equated monthly installments. You can know more about the federal bank education loan here, so keep reading!
|Loan Quantum||INR 10 to 20 Lakh|
|Margin||NIL for Loan up to INR 4 Lakh|
Table of Contents
- 1 Federal Bank Education Loan Quantum
- 2 Documents for Federal Bank Education Loan
- 3 Interest Rate for Federal Bank Education Loan
- 4 Expenses Covered Under Federal Bank Education Loan
- 5 Central Government Interest Subsidy Scheme
- 6 How to get Federal Bank Education Loan?
Federal Bank Education Loan Quantum
The bank will decide how much to lend to the borrower based on the source of their income. As the student is a non-earning individual, the parent or guardian is the primary individual who is obliged to pay the loan. The salary slip and other income documents such as form 16 and income tax return reports are required to process the loan. Co-borrower income is the only source to pay the EMI and it can be done via different banking services like ECS, PDCs, or standing instruction.
You don’t need to provide assets to the bank unless you borrow the loan over the limit. Above INR 4 lakh, you need to give tangible collateral to the federal bank to borrow the desired loan. And a margin is also put on your loan amount that is 5%-15%. For students who are pursuing their educational courses in India, the margin is 5%. When it comes to education in foreign lands, the margin goes up to 15%.
Documents for Federal Bank Education Loan
You require some documents for the loan sanction. Check out the list of documents for the Federal Bank Education Loan.
Proof of Identity
- Voters ID card
- Driving License
- Or PAN Card of Co-borrower
- Ration card
- Telephone or Electricity Bill
- Lease agreement
- Trade license
- Sales Tax certificate
- Salary Slip
- Bank Statement
- ITR report
- Form 16
- TDS certificate
- Salary Certificate
Proof of Admission
- Admission letter
- Basic Qualification & mark-sheet
- Fees structure approved by the university or educational institution
Interest Rate for Federal Bank Education Loan
The interest you need to pay for your education loan is based on the repo rate that is 4.40% per annum presently. Federal Bank offers you the education loan at a starting interest rate of 10.25% per annum. And it can be high or low based on the credit history of the co-borrower. As the student is the joint borrower of the loan, but he/she doesn’t need to provide any credit score or income details. Because their eligibility is based on the institution or college they secure admission through merit or entrance test.
Expenses Covered Under Federal Bank Education Loan
The education loan aims to support the student financially, so all the expenses from fees to travel expenses are managed with the loan. The fee that is payable to the College or School is managed with the loan, as it is disbursed in stages as per the requirements. Hostel, Tuition, Examination, Library, Lab, and other expenses of the course is included under the loan too. The loan will help pay towards equipment, instruments, uniforms, Travel expenses, computers and books. The loan could also be given for your study tours or project work if mentioned by the institution or university.
Note: The deposit amount which is payable towards the building fund is a refundable deposit and shouldn’t exceed 10% of the tuition fee.
Central Government Interest Subsidy Scheme
Under the Educational Loan Scheme of the Indian Banks’ Association (IBA), the Federal Bank offers subsidized loans to students belonging to economically weaker sections (EWS). You can have the subsidy for interest rate serviced during the moratorium period which is 6 to 12 months after the course period. Students wanting to pursue technical or professional courses from top universities and educational institutions in India can take advantage of the subsidy scheme. But it is for those students whose family income does not exceed INR 4.5 lakh. It is necessary to submit the family income proof while claiming the subsidy benefits.
How to get Federal Bank Education Loan?
You can apply for the education loan from Federal Bank if you are an Indian citizen. And there are 3-ways by which you can apply for the desired amount. To apply for the loan just speak to the contact center 1800-420-1199 toll-free number. You can also go to the bank branch and follow the instructions mentioned below to apply for the loan.
- Visit the bank branch and submit the loan application form
- Pay the processing fee as mentioned by the bank
- And provide the mentioned documents
Once you complete the application process, wait for the approval to come in.
Apply online via Vidya Lakshmi portal
You can apply for a federal bank education loan by filling the application form online and submitting the details as mentioned. After that, you can contact Federal Bank regarding the loan status by giving your application ID from the Vidya Lakshmi portal.
Federal Bank Education Loan Payment
You can use any of the following to pay the EMI of your Federal Education Loan every month.
Cheques: Submit the cheque to the bank branch to pay EMI before the due date. It is the offline payment service for the customers who don’t rely on online payment and other banking services.
Standing Instructions: You can visit the bank branch and request for a standing instruction which allows you to debit the EMI from your savings or salary account at Federal Bank. To use this feature, you need to have a relation with the bank.
FedNet: Using the internet banking service of the Federal Bank, the borrower can use the online payment services to pay their EMI before the due date of payment.
Automated Payment via ECS: EMI can be debited automatically from the bank account through ECS service. You need to submit the ECS request form to the bank branch before EMI payment starts.
Mobile Banking: The bank customers can download the Federal Mobile app to apply for the loan and pay the EMI.