Education Loan Interest Rates 20201002 views
- Study at lower interest rates with Union Bank of India Education Loan
- Subsidy for low-income groups and Tax saving for regular customers
Union Bank of India introduces its education loan to help students pursue their studies without any financial worries. Using the loan, one can complete their studies and pay the same at an attractive rate of interest. The payment of the loan and interest rate is to be made in equated monthly installments (EMI). And Union Bank of India offers a maximum period of 15 years to the customers to pay the entire loan. You can also be eligible for a tax deduction on your annual tax payment with the Union Bank of India education loan under the income tax act of 80(E). To claim the tax on your education loan, the individual income must come under the tax slab unit which starts from income above INR 5 lakh.
Union Bank of India not only helps meet the educational requirements of the individual, but it also makes a way towards the future. As you know with the right means of education one can achieve what they desire. To get your goal, you need to be educated, and there should be no worries for the money when Union Bank of India supports you.
Table of Contents
- 1 Union Bank of India for Abroad & Inland studies
- 2 CREDIT GUARANTEE FUND SCHEME FOR EDUCATIONAL LOANS (CGFSEL)
- 3 How to save Tax on Union Bank of India Loan?
- 4 Apply for Union Bank of India Education Loan
Union Bank of India for Abroad & Inland studies
You can borrow money from Union Bank of India and pay your institution or university semester fees. Because every individual can’t pay their higher education fees. And for those, Union Bank of India Education Loan makes it affordable. By having your place reserved in the university, you need to pass the entrance examination or selection process as per the criteria. So it is your duty first to meet the requirements of college or institution, because according to it they offer you the loan.
And, with the Union Bank of India Education Loan, female students get special concessions on the interest rate. To get a suitable loan with the desired rate of interest, it is necessary to provide the right source of income along with the collateral if required. In case of a higher loan, the individual needs to add a third-party guarantor for the security. Once the bank considers your application apt for the loan, it would approve your loan. After the loan approval, you can start paying for the borrowed amount after a 1-year moratorium period. Look at the table below to know about the margin of Union Bank of India Education Loan.
|Quantum (INR)||Type of Studies||Margin|
|1 to 4 lakh||Inland studies||Nil|
|> 4 lakh to <10 lakh||Abroad studies||15%|
|>4 lakh to 15 lakh||Inland studies||5%|
|Up to 30 lakh||Abroad studies||15%|
|> 20 lakh||Inlad studies||5%|
Student scholarship and assistance is also considered under the Union Bank of India education loan margin.
CREDIT GUARANTEE FUND SCHEME FOR EDUCATIONAL LOANS (CGFSEL)
Under this scheme, Union Bank of India supports the economically weaker sections of the society. By offering them a loan up to INR 7.5 lakh and above Union Bank of India provides education to all. And the effective rate of interest on your education loan starts from 9.20% per annum. The borrower gets a subsidy on their education loan up to INR 10 lakh or above. But to apply for the loan, you need to secure admission in the desired educational institution or university. And, to claim the subsidy, the annual income should not exceed more than INR 4.5 lakh.
You can claim the subsidy on education loans only for undergraduate, post-graduate or diploma courses once. And to get the benefit the student needs to provide the income proof approved by the state government. The scheme is applicable for the disbursement from the academic year of 2009.
Table showing the interest rate for the non-eligible CGFSEL customers
|Loan Quantum (INR)||Interest Rate (Men)||Interest Rate (Women)|
|Up to 4 lakh||10.45%||10%|
|> 4 lakh <=7.5 lakh||10.20%||10%|
Union Bank of India (Padho Pardesh Scheme)
Now the section of society and your income doesn’t matter for your education when you can study abroad with the Union Bank of India Education Loan. The difference between society ends at Union Bank of India, you can borrow money for your education from the bank for foreign education. Both the Economically Weaker Sections (EWS) and Other Backward Classes (OBCs) can apply for the Padho Pardesh scheme if their family income doesn’t exceed INR 6 lakh. And the OBCs and EBCs can apply for the loan if their income is in the range of INR 1 to 3 lakh. What is the eligibility for the foreign education loan at Union Bank of India?
Students who meet the below-mentioned parameters can avail of the benefits of the Padho Pardesh scheme.
- Secured admission to abroad studies such as Masters, M. Phil and Ph.D. levels only
- The student who submit their income proof either in Form-16, ITR, salary or income certificate issued by authorized officers of State Governments.
- The scheme is applicable for the loans sanctioned from 01.04.2014
- The subsidy is redeemed for the interest charged on your disbursed Union Bank of India education loan amount for the available for course and moratorium period.
- The scheme applies to higher studies abroad
Table showing the interest rate on post-graduate and higher education
|Course Name||Interest Rate|
|Post Graduate Programme in Management (PGPM)||7.20%|
|Post Graduate Programme in Management for working|
|Post Graduate Programme in Management for Senior|
Note: Students obtaining the benefits under the Padho Pardesh scheme can no longer get the subsidy if they give up Indian Citizenship during the loan tenure.
Union Education Loan-Special Education Loan Scheme
You can get a postgraduate degree in management course from Union Bank of Indian with a maximum quantum of INR 37 lakh with zero margin and collateral. And the rate of interest on your loan is based on the Marginal Cost of Fund Based Lending Rate (MCLR) of Union Bank of India that is 8.40%. As the interest rate is floating, you can get lower EMIs compared to other education loan schemes. The bank provides a maximum duration of 15 years to the customers to pay the loan. Have a look at the below table to find out the interest rate with a 1-year moratorium period.
|Course Name||Loan Range (INR)||Interest Rate|
|Scheme for students of Premier Management & Technical institutes||4 lakh to 30 lakh||7%|
|Scheme for students of Tier-II Management & Technical Institutes (Male)||Above 7.5 lakh||9%|
|Scheme for students of Tier-II Management & Technical Institutes (Female, SC, ST, OBC)||Up to 37 lakh||8.45%|
Need for security in Union Bank of India special scheme for customers. The loan amount decides whether the borrower needs to mortgage the collateral or not. Because security is valid for a higher loan amount. Look in the below table to know when you need to submit the collateral to Union Bank of India.
|Quantum of loan (INR)||Security|
|Upto Rs. 4 Lakh||None|
|Above Rs. 4 Lakh & upto Rs. 7.50 Lakh||3rd party Guarantor|
|Above Rs. 7.50 Lakh||Tangible collateral with Guarantor|
You need to provide the above security as well as your parent, in-law or relatives as the co-applicant.
Union Bank of India Skill Development Loan
For polytechnic and other IT diplomas and degree courses from the best institutions in India, you need funds. And the need for funds for education purposes best meet at Union Bank of India. To get the loan for your skill development course, you just need to visit the bank branch to apply for it. You can get the loan ranging from INR 5,00 to 15 lakh with a tenure of 7 years. And the interest rate to the loan is based on the CGFSL eligibility. The interest rate for the eligible customer both men and women starts from 8.70% per annum at a fixed rate. Look at the table below and know the interest rate on your loan amount.
|Quantum of Loan (INR)||Interest rate|
|Up act of to 1.5 lakh for men||Maximum 10.45%|
|Up to 1.5 lakh for women||Maximum 9.95%|
How to save Tax on Union Bank of India Loan?
According to the RBI rules, borrowers who pay their annual tax regularly can have the advantage of saving on their Union Bank of India Education Loan. As per the 1961 income tax act of 80(E), the parents can claim tax on their education loan and save their interest. It means you can save your interest rate on the loan payment if your income covers the tax slab. Based on the updated Budget the taxable income of an individual is now above INR 5 lakh. To know how tax savings work in an education loan look at the below example.
Suppose you borrowed INR 8 lakh from Union Bank of India to get the admission in the desired university and the EMI is INR 9,793 for 12 years at an interest rate of 10.50%. But, you can save the interest rate to your loan by claiming a tax deduction. The total interest payable for the mentioned loan is INR 6,10,210. So, don’t forget to get the benefit of tax saving on your education loan, because using it, you can make your loan affordable and beneficial.
Apply for Union Bank of India Education Loan
To apply for the loan, you should visit the website of Vidya Lakshmi where you can select Union Bank for an education loan and apply for it online. With no offline procedure, the user can get the loan application processed online with zero processing charge. You need to submit the below list of documents to the bank to get the loan application processed.
- Aadhar card, PAN card, Voter ID, Passport or Driving Licence of Student, parent and third-party guarantor
- Income details like form 16, ITR report, salary slip, salary certificate and bank statement of both the co-applicant and guarantor
- Qualification proof such as 10+2 certificate of parent and student both. And graduate degree with semester wise result
Once you complete the documentation for your loan, you just need to wait for the approval. Union Bank of India doesn’t take as much time and approves loans quickly. After the loan disbursement, you have 1 year of Moratorium period on which you can decide the EMI schedule.
Now, make your dream of education real with the Union Bank of India Education Loan and get the desired education funds from the bank.