POONAM VERMARS1901B27

8/8/2019 POONAM VERMARS1901B27

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TERM PAPER On

Personal Finance Planning

Topic ::- Develop a competitive Product of Education Loan

and compare it with existing plans of 2 Private and 2 Public Sector companieseach and explain how features of your product are better than the 4 productswhich you are considering.

DEPARTMENT OF MANAGEMENT

SUBMITTED TO-

Mr. Lalit K. BhardhvajSUBMITTED BY:

Poonam VermaRoll no. RS1901B27

Section - S1901

MBA (III)

Reg.no.10905423

Lovely Professional University

Phagwara

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Decleration Regarding Term Paper

TOPIC OF TERM PAPER : Develop a competitive Product of

Education Loan and compare it with existing plans of 2 Private and 2 Public

Sector companies each and explain how features of your product are better than the 4 products which you are considering.

COURSE INSTRUCTOR : Mr. Lalit K. Bhardhvaj

DATE OF SUBMISSION : 13/11/2010

ROLL NO. : B-27

SECTION: RS1901

COURSE CODE: MGT-636

Declaration:

I declare that this assignment is my individual work. I have

not copied from any other student’s work or from any other source

except where due acknowledgement is made explicitly in the text, nor

has any part been written for me by another person.

Student’s Signature: POONAM VERMA.

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ACKNOWLEDGEMENT::

I take this opportunity to present my votes of thanks to all those guidepost who really

acted as lightening pillars to enlighten our way throughout this project that has led to

successful and satisfactory completion of this study.

We are really grateful to our professor for providing us with an opportunity to undertake

this project in this university and providing us with all the facilities. We are highly

thankful to MR. LALIT KUMAR & MISS. NITIKA SHAGAL for his active support,

valuable time and advice, whole-hearted guidance, sincere cooperation and pains-taking

involvement during the study and in completing the assignment of preparing the said

project within the time stipulated.

Lastly, We are thankful to all those, particularly the various friends , who have been

instrumental in creating proper, healthy and conductive environment and including new

and fresh innovative ideas for us during the project, their help, it would have been

extremely difficult for us to prepare the project in a time bound framework.

Name –Poonam Verma

Regd.No-10905423,

Roll.No-RS1901B27

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Index-

Introduction OF EDUCATION LOAN.

Procedure and term & condition by RBI.

State bank of India

State bank of Patiala

HDFC

Axis bank

Comparison of 4 Banks.

My competitive education loan product.

Procedure & term and conditions

Benefits of my product

Comparison

Reasons

Advantages of education loan

Disadvantages of education loan

References

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Introduction of EDUCATION LOAN

Want to study ahead but the fees are too high. Looking for a way to fund your college

studies. All you need is an Education Loan. There are a variety of education loans out there,

available for all students.

Education is central to the Human Resources Development and empowerment in any country.

National and State level policies are framed to ensure that this basic need of the population is

met through appropriate public and private sector initiatives. While government endeavour to

provide primary education to all on a universal basis, higher education is progressively

moving into the domain of private sector. With a gradual reduction in government subsidies

higher education is getting more and more costly and hence the need for institutional funding

in this area.

The scope of education has widened both in India and abroad covering new courses in

diversified areas. Loans for education should be seen as an investment for economicdevelopment and prosperity. Knowledge and information would be the driving force for

economic growth in the coming years.

Based on recommendations made by a Study Group, IBA had prepared a Model Educational

Loan Scheme in the year 2001 which was advised to banks for implementation by Reserve

Bank of India vides circular No.RPCD.PLNFS.BC.NO.83/06.12.05/2000-01 dated April

28, 2001 along with certain modifications suggested by the Government of India. In line with

the announcement made by the Hon'ble Finance Minister in his Budget Speech for the year

2004-05, IBA had communicated certain changes in the security norms applicable to

educational loans with limits above Rs.4 lakhs and up to Rs. 7.5 lakhs.

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2. OBJECTIVES OF THE SCHEME:

The Educational Loan Scheme outlined below aims at providing financial support from the

banking system to deserving/ meritorious students for pursuing higher education in India and

abroad. The main emphasis is that every meritorious student though poor is provided with an

opportunity to pursue education with the financial support from the banking system withaffordable terms and conditions. No deserving student is denied an opportunity to pursue

higher education for want of financial support.

3. APPLICABILITY OF THE EDUCATION LOAN::

The scheme detailed below could be adopted by all Commercial Banks. The scheme provides

broad guidelines to the banks for operational sing the educational loan scheme and the

implementing bank will have the discretion to make changes suiting to the convenience of the

students/ parents to make it more customers friendly.

The scheme details are as under :

4. ELIGIBILITY CRITERIA:

4.1 Student eligibility :

* Should be an Indian National

* Secured admission to professional/ technical courses in India or Abroad through Entrance

Test/ Merit Based Selection process.

4.2 Courses eligible

Studies in India: (Indicative list)

* Graduation courses: BA, B.Com., B.Sc., etc.

* Post Graduation courses : Masters & PhD.

* Professional courses : Engineering, Medical, Agriculture, Veterinary, Law, Dental,

Management, Computer etc.

* Computer certificate courses of reputed institutes accredited to Dept. of Electronics or

institutes affiliated to university.* Courses like ICWA, CA, CFA etc.

* Courses conducted by IIM, IIT, IISc, XLRI. NIFT etc.

* Courses offered in India by reputed foreign universities.

* Evening courses of approved institutes.

* Other courses leading to diploma/ degree etc. conducted by colleges/ universities approved

by UGC/ Govt./ AICTE/ AIBMS/ ICMR etc.

* Courses offered by National Institutes and other reputed private institutions. Banks may

have the system of appraising other institution courses depending on future prospects/

recognition by user institutions.

Studies abroad :-

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* Graduation: For job oriented professional/ technical courses

offered by reputed universities.

* Post graduation: MCA, MBA, MS, etc.

* Courses conducted by CIMA- London, CPA in USA etc.

4.3 Expenses considered for loan :

* Fee payable to college/ school/ hostel.

* Examination/ Library/ Laboratory fee.

* Purchase of books/ equipments/ instruments/ uniforms.

* Caution deposit/ building fund/ refundable deposit supported by Institution bills/ receipts.

* Travel expenses/ passage money for studies abroad.

* Purchase of computers - essential for completion of the course.

* Any other expense required to complete the course - like study tours, project work, thesis,

etc.

5. QUANTUM OF FINANCE:

Need based finance subject to repaying capacity of the parents/ students with margin and the

following ceilings.

- Studies in India - Maximum Rs.7.50 lacs.

- Studies abroad - Maximum Rs.15 lacs

6. MARGIN :

Up to Rs 4 lacs Nil

above Rs. 4 lacs: Studies in India 5%

Studies Abroad 15%

7. SECURITY:

Up to Rs 4 lacs: No security

Above Rs.4 lacs and up to R.s.7.5 lakhs Collateral in the form of a suitable third party

guarantees. The bank may, at its discretion, waive third party guarantee if satisfied with the

net-worth / means of parent who would be executing the document as "joint borrower".

Above Rs.7.5 lakhs Collateral security of suitable value or suitable third party guaranteealong with the assignment of future income of the student for payment of instalments.

Note:-

* The loan documents should be executed by the student and the parent/ guardian as joint-

borrower.

* The security can be in the form of land/ building/ Govt. securities/ Public Sector Bonds/

Units of UTI, NSC, KVP, LIC policy, gold, shares/ debentures, bank deposit in the name of

student/ parent/ guardian or any other third party with suitable margin.

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* Wherever the land/ building are already mortgaged, the unencumbered portion can be taken

as security on II charge basis provided it covers the required loan amount.

* In case the loan is given for purchase of computer the same to be hypothecated to the Bank.

Banks who wish to support highly meritorious/ deserving students without security maydelegate such powers to a fairly higher level authority.

8. RATE OF INTEREST:

Up to Rs 4 lacs BPLR

above Rs. 4 lacs BPLR + 1%

*Simple interest to be charged during the Repayment holiday/ Moratorium period.

* Penal interest @ 2% is charged for above Rs.4 lacs for the overdue amount and overdue

period.

9. APPRAISAL / SANCTION/ DISBURSEMENT:

* In the normal course, while appraising the loan the future income prospects of the student

will be looked into. However, where required, the means of parent / guardian could also be

taken into account to evaluate re-payment capability.

* The loan to be sanctioned as per delegation of powers preferably by the Branch nearest to

the place of domicile.

* No application for educational loan received should be rejected without the concurrence of

the next higher authority.* The loan to be disbursed in stages as per the requirement/ demand directly to the

Institutions/ Vendors of books/ equipments/ instruments to the extent possible.

10. REPAYMENT:

Repayment holiday/Moratorium Course period + 1 year or 6 months after getting job,

whichever is earlier.

The loan to be repaid in 5-7 years after commencement of repayment.

If the student is not able to complete the course within the scheduled time extension of time for completion of course may be permitted for a maximum period of 2 years.

The accrued interest during the repayment holiday period to be added to the principal

and repayment in Equated Monthly Instalments (EMI) fixed.

1% interest concession may be provided for loanees if the interest is serviced during

the study period when repayment holiday is specified for interest/ repayment under

the scheme.

11. FOLLOW UP:

Banks to contact college/ university authorities to send the progress report at regular intervals

in respect of students who have availed loans.

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12. PROCESSING CHARGES:

No processing/ upfront charges may be collected on educational loans.

13. CAPABILITY CERTIFICATE:

Banks can also issue the capability certificate for students going abroad for higher studies.

For this financial and other supporting documents may be obtained from applicant, if

required.

(Some of the foreign universities require the students to submit a certificate from their

bankers about the sponsors' solvency/ financial capability, with a view to ensure that the

sponsors of the students going abroad for higher studies are capable of meeting the expensestill completion of studies.)

14. OTHER CONDITIONS:

No due certificate need not be insisted upon as a pre-condition for considering educational

loan. However, banks may obtain a declaration/ an affidavit confirming that no loans are

availed from other banks.

Loan applications have to be disposed of within a period of 15 days to 1 month, but not

exceeding the time norms stipulated for disposing of loan applications under priority sector lending.

In order to bring flexibility in terms like eligibility, margin, security norms, banks may

consider relaxation in the norms on a case to case basis delegating the powers to a fairly

higher level authority.

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EDUCATION LOAN SCHEME PROVIDED PUBLIC COMPANY

BY

STATE BANK OF INDIA

State bank of India

The State Bank of India, popularly known as SBI, is one of the leading banks in India. The

bank traces its origin to the first decade of the 19th century. Later on, it was merged with the

Imperial Bank. In the year 1955, the Government of India nationalized the Imperial Bank

along with the Reserve Bank of India. Ever since that time, the bank acquired its presentname that is SBI.

The State Bank of India is India's largest commercial bank. The bank has been striving

sincerely to adhere to the efforts of providing utmost customer satisfaction to the best

possible extent.

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INTRODUCTION OF EDUCATION LOAN

State Bank of India provides its customers with a variety of personal banking services. SBI,

which is actively engaged in Community Services Banking, also offers education loans tostudents aspiring to continue higher studies. SBI Study Loans are sanctioned only to Indian

Nationals.

A study loan is sanctioned for studies both in India and abroad.

Courses Eligible for Education Loans:

A candidate, who applies for a program with prospects of employment, can apply for

the loan. Whether you apply for a

Graduate,

Professional

Postgraduate Program

UGC approved,

AICTE or

The government

Expenses taken into account:

• The student loan covers school, college or hostel fees as well as cost for buying books

and other necessary items.

• Apart from the library, exam or library fees, even caution deposit, refundable deposit

and building fund are considered for the loan.

• Other expenses, which are mandatory for completing the course, travel expense as

well as a maximum cost of Rs 50,000 for buying a 2 wheeler, are taken into account.

Quantum of Loan & Security:

An applicant is sanctioned a loan of maximum Rs 10 lacs for studying in India

and Rs 20 lacs for studying in abroad. On a loan above Rs 4 lacs, there is a

margin of 5% and 15% for studying in India and abroad respectively.

• No security is required for loan amount up to Rs 4 lacs.

• A borrower should present a 3rd party as guarantee for a loan amount above Rs 4 lacs.

However, on SBI discretion, this clause of 3rd party guarantee may be waived off in

certain cases.

• If you borrow a loan amount above Rs 7.5 lacs, you need to offer a material collateral

security and assign the future income of the student for paying instalments.

• The guardians or parents of a borrowing student should secure an education loan.

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• If the borrower is married, his or her spouse, parents-in-law or parents can act as the

co-obligator.

Repayment of Education Loan:

The borrower can begin repaying 6 months after getting job or one year after the course is

completed, whichever happens earlier. The loan can be repaid in a period of 5 to 7 years.

Expenses considered for loan

Fees payable to college/school/hostel.

Examination/Library/Laboratory fees.

Purchase of Books/Equipment/Instruments/Uniforms.

Caution Deposit/Building Fund/Refundable Deposit (maximum 10%

Tuition fees for the entire course).

Travel Expenses/Passage money for studies abroad.

Purchase of computers considered necessary for completion of course.

Cost of a Two-wheeler up to Rs. 50,000.

Any other expenses required to complete the course like study tours, project

Work etc.

Amount of Loan

For studies in India, maximum Rs. 10 lacs.

For studies in India, minimum Rs.50,000

Studies abroad, maximum Rs. 20 lacs.

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Interest Rates

(With effect from 10.11.2008)

For loans up to Rs.4 lacs- 0.50% below SBAR i.e.12.50% p.a. Floating.

For loans above Rs. 4 lacs and up to Rs.7.50 lacs - 1.00% above SBAR 14.00% Floating.

For loans above Rs.7.50 lacs - SBAR - 13.00% p.a. Floating.

Processing Fees

No processing fee/ upfront charges

Deposit of Rs. 5000/- for education loan for studies abroad which will be adjusted in

the margin money.

Charges::

Pre-payment charges:: 1.00%

Time to process loan- 1-7 days.

Co application ----- YES

Repayment Tenure

Repayment will commence one year after completion of course or 6 months

After securing a job, whichever is earlier?

Place of study Loan amount Repayment period in year

Study in India 10.0 lack 5-7

Study in abroad 20.0 lack 5-7

Security

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amount For loans up to Rs. 10.00 lacs for Studies in

India and up to Rs. 20.00 lacs for studies

abroad

Up to 4 lacs No security

Above Rs. 4

lacs to Rs.

7.50 lacs

Collateral security in the form of suitable third

party guarantee. The bank may, at its

discretion, in exceptional cases, weave third

party guarantee if satisfied with the net-

worth/means of parent/s who would be

executing the documents as "joint borrower".

Above 7.50 lacs tangible collateral security of suitable value,

along with the assignment of future income of

the student for payment of instalments.

Condition::

All loans should be secured by parent(s)/guardian of the student borrower. In

case of married person, co-obligator can be either spouse or the parent(s)/ parents-in-law

Margin

For loans up to Rs.4.0 lacs: No Margin

For loans above Rs.4.0 lacs:

Studies in India: 5%

Studies Abroad: 15%

Documentation Required

Completed Education Loan Application Form.

Mark sheets of last qualifying examination

Proof of admission scholarship, studentship etc

Schedule of expenses for the specified course

2 passport size photographs

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Borrower's Bank account statement for the last six months

Income tax assessment order, of last 2 years

Brief statement of assets and liabilities, of the Co-borrower

EDUCATION LOAN SCHEME PROVIDED

BY

STATE BANK OF PATIALA

Bank type:: STATE BANK GROUP.

State Bank of Patiala (SBP) is a nationalized Indian bank which is a subsidiary of the State

Bank of India. Founded in 1917 by the then Maharaja His Highness Bhupinder Singh,

erstwhile Patiala, the bank was initially named Patiala State Bank. It was named as State

Bank of Patiala after it became a subsidiary of SBI. The bank was set up with the sole aim of

nurturing the growth of agriculture, trade and industry. In 1948, the bank was brought under the control of the Reserve Bank of India or RBI. Since its inception, the State Bank of Patiala

has been constantly working towards increasing its size and the volume of business.

EDUCATION LOAN

State bank of Patiala offers education aspiring student to help them pursue for higher studies

in India and abroad. Bank provides loan to students for graduation courses, post graduation

courses, professional courses and technical courses, courses offered by National institutes and

other reputed privates institutes. Bank has a facility of life insurance through SBI Life

Insurance Company named ‘Shield’ for student/parents/guardian at optional basis.

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Loan for study in::

India and

Abroad.




Graduation courses-B.A.,B.COM,B.SC etc

Professional

Post Graduation Courses—Masters and PhD.

Computer certificate courses

Courses like ICWA, CA, CFA, etc.

Courses conducted by IIM, IIT, IISC, XLRI, NIFT, etc.

Courses Eligible for study Abroad::

Graduation: For job-oriented professional/ technical courses offered by reputed Universities.

Post Graduation : MCA, MBA, MS, etc.,

Courses conducted by CIMA - London, CPA in USA etc.

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margin of 5% and 15% for studying in India and abroad respectively.

Security: Studies in India

Up to Rs. 4.00 Lacs: Nil.

Above Rs. 4.00 Lacs and up to Rs. 7.50 lakh: Collateral in the form of a suitable third

party guarantee.

Above Rs. 7.50 lacs to 10.00 lacs: Tangible Collateral for full value of the loan.

Studies in Abroad::

Up to Rs. 4.00 Lacs : Nil

Above Rs. 4.00 Lacs and up to Rs. 7.50 lakh: Collateral in the form of a suitable third

party guarantee.

Above Rs. 7.50 lacs to 15.00 lacs: Collateral of suitable value or suitable third party

guarantee.

Above 15.00 lacs and up to 20.00 lacs: Tangible Collateral for full value of the loan.


Repayment will commence one year after completion of course or 6 months after securing a

job. Whichever is earlier?

The loan is repaid in 5-10 years after commencement of repayment.

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Work etc.

Amount of Loan




Time to process loan- 0 days.

Co application ----- NO

Interest Rates::

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For loans up to Rs. 4 lakh - 12.25% (1.75 bps below BPLR).

For loans above Rs. 4 lakh - 14% (at BPLR).

Basically 13.50 %

Margin




Studies Abroad: 15%







Passport/ID CARD/VOTER card/PAN card etc. Of student/parent/guardian and

guarantor.



Proof of income of the borrower/guarantor.

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Proof of income of the borrower/guarantor.

Brief statement of assets and liabilities, of the Co-borrower.

PRIVATE BANKS EDUCATION LOAN PLAN

1) HDFC BANK EDUCATION LOAN

Housing Development Finance Corporation Limited or HDFC Bank started its operations in

the year 1995 as a scheduled commercial bank. It is one of the Indian banks, which offer

education loans to students willing to pursue higher education in India or abroad. Scroll down

the page to learn more about HDFC Bank education loans.

Candidates Eligibility Required for Education Loan

Candidates willing to apply for HDFC Bank education loan should be Indian Nationals.

Applicants should be between 16-35 years of age. Collateral security is essential for loans

above Rs. 7.5 lacs. A co-applicant is required if you are applying for full time courses.


A candidate, who applies for a program with prospects of employment, can apply for the loan. Whether you apply for a

Graduate,

Professional

Post Graduate Program- management, engineering, medicine, computer

applications, fine arts and designing, hotel and hospitality, architecture and

pure science.

UGC approved,

Distance learning programs

Air hostess training courses

AICTE or

The government

Others like- SAP, GNIIT and ERP.

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Features and Benefits offered by HDFC Bank

The maximum amount of loan granted for education in India is Rs.15 lacs and Rs. 20

lacs for education in abroad. The rate of interest offered is attractive.

Repayment of loan commences either one year after the course ends or six months

after one gets a job. It depends on which one is earlier to the other.

Tenure of seven years is available for the loans and the customers also get tax benefit.

The entire procedure is hassle free and approvals are given at the earliest.

Loan available up to tenure of 7 years including moratorium period.

Loans available for short duration/ job oriented courses also.

Candidates may also fill and submit the online application form available. The

representatives of the bank get in touch with the applicants as soon as possible.

The expenses covered by HDFC Bank education loan includes money to be paid as

college and hostel charges, examination fees, library and laboratory fees, refundable

deposit, caution deposit and other charges.

The loan also covers travel expenses for studying abroad, essential articles

required for completing the course and other educational costs.

Interest rates::

Interest rate: 14%

Charges for late payment of EMI: @ 24 % p.a. on amount outstanding from date of default.

Margin

Study abroad margin will be 15%

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Study India margin will be 5%

Special privileges.

Service At Your Door Step

Loans disbursed directly to the educational institution as Per the Fee Schedule.

Insurance Protection from HDFC ERGO.

Gateway To Other Banking Products And Services.

Savings Account

Smooth repayment:

Our Equated Monthly Instalments (EMIs) scheme allows for easy repayment and

saves you from hassles.

Flexibility:

Our loans are tailor-made to your needs. Opt for tenures up to 4 years for unsecured

loans and 7 years for secured loans (against security of a residential property / shares).

Fees & Charges for Educational Loan

Description of Charges Education Loan

Loan Processing Charges Up to a maximum 2% of the loan amount

Prepayment (up to 6 months of repayment ) No pre-payment permitted

Pre-payment charges (after 6 months of

repayment)Up to 4% of the Principal Outstanding

No Due Certificate / No ObjectionCertificate (NOC)

Nil

Solvency Certificate Not applicable

Charges for late payment of EMI@ 24 % p.a. on amount outstanding from

date of default

Credit assessment charges Not applicable

Non standard repayment charges Not applicable

Cheque swapping charges Up to Rs. 500/- per event

Loan Re-Booking / Re-Schedulement Up to Rs. 1000/-

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Charges

Bounce Cheque Charges Up to Rs. 450/- per Bouncing

Legal / incidental charges At actual

Stamp Duty & other statutory charges As per applicable laws of the state

Security::

Unsecured Lending Up to 15 Lakhs-No Third Party Guarantee Or Collateral

Required.

Loans above INR 15 Lakhs will be secured by adequate collateral.

Residential Property.

HDFC Bank Fixed Deposit

LIC/KVP/NSC

Loan Eligibility Based on Applicant Last Drawn Salary or Co-Applicant Income or

combination of both.

Loan Tenure Up to 72 Months Including 15 Months of Moratorium.Important Document, Lien on Certificate and Transcripts.

Documentation

Category Applicant (Student) Co-Applicant

AcademicInstitute Admission Letter with

Fee break-up

Not Applicable

SSC,HSC,Graduation Mark

sheets Not Applicable

KYC(Know Your

Customer)Age Proof Age Proof

Signature Proof Signature Proof

Identity Proof Identity Proof

Residence Proof Residence Proof

Income Documents Not Applicable Salaried

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Latest 2 Salary Slips carrying date

of joining details

Latest 6 Month Bank statement

where Salary is credited

Not Applicable Self Employed

Last 2 Year ITR with

Computation of Income

Last 2 Years Audited Income

Balance Sheet / P& L

Last 6 Month Bank statement

Proof of Turnover (Latest Sales /

Service Tax Return)

Not Applicable Self Employed - Professional

Last 2 Year ITR with

Computation of Income

Last 2 Years Audited Income

Balance Sheet / P& L

Last 6 Month Bank statement

Proof of Qualification

Others Completed Application Form Completed Application Form

Latest Photograph (Signed

Across)

Latest Photograph (Signed

Across)

If the appointment letter does 'not mention the date of Joining details, then co-applicant has to

submit appointment letter of the current employer.

Proof of continuity from previous employer is required if the co-applicant is in the current job

for less than 1 year at the time of loan application

Documentation ( Post Sanction )

Is there any documentation required post the sanction of the loan ?

Category Applicant ( Student ) Co-Applicant

Completed Loan Agreement to be Signed by Applicant and Co-

applicant *

SI/ECS Mandate As Applicable

Post Dated Security Cheques

A) HDFC Bank Standing

Instructions (S.I) - 3 Cheques

B) Non HDFC Bank ECS-7

Cheques

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* Stamp duty to be paid by the customer as per the relevant state laws.

1) AXIS BANK EDUCATION LOAN

Axis Bank, previously known as UTI Bank, is one of the Big Four Banks of India along with

State Bank of India, HDFC Bank and ICICI Bank. Established in 1994, it's the first of the

new private sector banks in India to start its operations, when Government of India opened

the gate for the private banks to flock into the Indian financial market. Though the bank

started its operation with the name UTI Bank, but later, in order to avoid ambiguities and

confusion with other discrete entities carrying the same name, it changed its name to its

current form (Axis Bank) in April 2007.

Axis Bank Limited recorded a total income of Rs. 13,745.04 crore as on the year ended

March 31, 2009. It also made a net profit of Rs. 1,812.93 crore in the same financial year.

EDUCATION LOAN ::

Higher education within your reach

Axis Bank's Study Power aims to provide financial support to deserving students for pursuing

higher professional or technical education in India and abroad. The loan would be provided to

students who have obtained admission to career-oriented courses e.g., medicine, engineering,

management etc., either at the graduate or post-graduate level.

Quantum of Loan

The quantum of finance under the scheme is capped at Rs 10.00 lacs for studies in India and

Rs 20.00 lacs for studies abroad, which would cover tuition fees, hostel charges (if any), cost

of books, etc. The minimum amount of loan would be Rs 50,000.

Role of the Guardian

The parent(s) or guardian of the student would be treated as a co-applicant of the loan. His or

her role would be, necessarily, like the primary debtor.

Security

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Third party guarantee and/or collateral security may be asked for in appropriate cases.

Additional Security

Assignment of LIC policy in favour of the Bank for the sum assured being at least 100% of

the loan amount. The policy is kept alive during the currency of the loan. To ensure this, theannual premium may be included in the computation of the loan requirement, along with the

tuition fees and other recurring charges. Further, the future income of the student needs to be

assigned in favour of the Bank for meeting the instalment obligations.

Disbursement

The loan will be disbursed in full or in suitable instalments taking into account the

requirement of funds and/or fee schedule as assessed by the Bank directly to the educational

institution or vendor of books or equipment or instruments.

Interest Rates & Charges

Margin




Studies Abroad: 15%


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Comparison of education loan Public and Private banks::

STUDY IN INDIA::

FOR GRATUATION ::

BANK Rate

(%)

Eligibility Min.loan

(Rs)

Max.loan

(Rs)

Margin

Money(%)

Min.

Tenure(yr.)

Max.tenure

(yr.)

State

bank of

India

12.75 16-55 yr. 50000.00 100000.00 1 7

State

bank of

Patiala

13.50 50000.00 400000.00

HDFC 14.00 16-30yr. 50000.00 1500000.0

0

5.00 1 7

Axis

bank

15.75 16-30yr. 50000.00 100000.00 1 7

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COMPARE MY COMPETATIVE EDUCATION PLAN TO EXISTING PUBLIC AND

PRIVATE BANK’S EDUCATION PLAN

FEATURE OF MY COMPETATIVE EDUCATION LOAN

PRODUCT::

Provide LOAN FOR ::

Study in India

Study in abroad.




Graduation courses- B.A.,B.COM,B.SC etc

Professional

Postgraduate Program-- Masters and PhD

UGC approved,

Computer certificate courses

Courses like ICWA, CA, CFA, etc.

Courses conducted by IIM, IIT, IISC, XLRI, NIFT, etc.

Distance learning programs

Air hostess training courses

AICTE or

L.P.U Page 28



The government

Others like- SAP, GNIIT and ERP.

Courses Eligible for study Abroad::

Graduation: For job-oriented professional/ technical courses offered by reputed Universities.

Post Graduation : MCA, MBA, MS, etc.,

Courses conducted by CIMA - London, CPA in USA etc.











Work etc.

Amount of Loan


L.P.U Page 29






Co application ----- YES




margin of 5% and 15% for studying in India and abroad respectively.• No security is required for loan amount up to Rs 4 lacs.

• A borrower should present a 3rd party as guarantee for a loan amount above Rs 4 lacs.

However, on SBI discretion, this clause of 3rd party guarantee may be waived off in

certain cases.

• If you borrow a loan amount above Rs 7.5 lacs, you need to offer a material collateral

security and assign the future income of the student for paying instalments.

• The guardians or parents of a borrowing student should secure an education loan.

• If the borrower is married, his or her spouse, parents-in-law or parents can act as the

co-obligator.


The borrower can begin repaying 6 months after getting job or one year after the course is

completed, whichever happens earlier.

The loan can be repaid in a period of 5-20 YEARS.

Processing Fees

No processing fee/ upfront charges

Deposit of Rs. 5000/- for education loan for studies abroad which will be adjusted in

the margin money.

L.P.U Page 30



Repayment Tenure

Repayment will commence one year after completion of course or 6 months

After securing a job, whichever is earlier?

Place of study Loan amount Repayment period in year

Study in India 19.0 lack 5-10

Study in abroad 20.0 lack 5-20

Security

amount For loans up to Rs. 19.00 lacs for Studies in

India and up to Rs. 20.00 lacs for studiesabroad

Up to 4 lacs No security

Above Rs. 4

lacs to Rs.

7.50 lacs

Collateral security in the form of suitable third

party guarantee. The bank may, at its

discretion, in exceptional cases, weave third

party guarantee if satisfied with the net-

worth/means of parent/s who would be

executing the documents as "joint borrower".

Above 7.50 lacs tangible collateral security of suitable value,

along with the assignment of future income of

the student for payment of instalments.

Condition::

All loans should be secured by parent(s)/guardian of the student borrower. In

case of married person, co-obligator can be either spouse or the parent(s)/ parents-in-law

L.P.U Page 31



Margin




Studies Abroad: 15%










L.P.U Page 32



FEATURES OF MY PRODUCT IS BEETER THAN AS WE

COMPARE WITH 2 PUBLIC AND 2 PRIVATE BANKS.

Comparison of education loan Public and Private banks::

STUDY IN INDIA::

FOR GRATUATION ::

BANK Rate

(%)

Eligibility Min.loan

(Rs)

Max.loan

(Rs)

Margin

Money(%)

Min.

Tenure(yr.)

Max.tenure

(yr.)

State

bank of

India

12.75 16-55 yr. 50000.00 100000.00 1 7

State

bank of

Patiala

13.50 50000.00 400000.00

HDFC 14.00 16-30yr. 50000.00 1500000.0

0

5.00 1 7

Axis

bank

15.75 16-30yr. 50000.00 100000.00 1 7

MY BANK

My

bank

12.25 % Above

16 yr -60yr

50000.00 1900000.0

0

1yr. 20 yr.

Another benefits::

Eligibility above age of 16 year up to 60 year.

Provide loan for all type of education and course.

Amount large amount of loan is provided for education so that person can done

his graduation and also get interest on the amount for post graduation.

L.P.U Page 33



Interest rate:: 12.25 % which is less as compare to another banks.

The loan can be repaid in a period of 5-20 YEARS.

No processing fee/ upfront charges.


Co application ----- YES.

ADVANTADES OF EDUCATION LOAN::

HELPS you complete your objective and achieve financial freedom, you can pay back

them easily.

Student loans are great alternatives as compared to conventional loans.

Offer lucrative interest rates but also have easier terms and conditions.

No security up to 4 lacs.

Income tax saving

The borrower is not required to repay the loans while studying as the re-payment

process commences after completion of the said course and attaining a job within a

stipulated span of time.

DISADVANTAGES::

Most of banks doing this for increase their profit ability.

Students get trapped in the web of unsuitable education loans due to lack of proper

knowledge and understanding about the loan procedures and banks’ terms and

conditions.

Complex procedure.

L.P.U Page 34



High risk.

Some times unmanageably situation for borrowers.

Hidden charges

References and bibliography........................

http://www.cbseguess.com/education/educational_loans/

http://www.sbi.co.in/

www.sbp.co.in

http://www.indiaedu.com/education-loans-india/

http://www.worldcolleges.info/loan.php

http://www.worldcolleges.info/statebankofindia.php

http://www.worldcolleges.info/statebankofpatiala.php

http://www.worldcolleges.info/hsbcbank.php


http://www.indiaedu.com/education-loans-india/hdfc-bank.html

http://www.educationloannetwork.com/faq.html

http://www.axisbank.com/personal/loans/studypower/Education-Loan.asp


http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,1,20,118












http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,1,20,118








