Federal Bank Indian and Foreign Education Loan

Federal Bank Indian and Foreign Education Loan – Federal Bank was well-known in the pre-independence epoch; Federal Bank is a leading Indian Commercial Bank in the private sector. Headquartered in Aluva, Kerala, the bank has a robust network of more than a thousand branches and ATMs spread across the nation.

Education is a way of life. It is a basic requirement that aids one progress as a person and enlarges their standpoint. Federal Bank aids the young minds from not missing an opportunity to educate them due to absence of finance. Federal Bank bids Education Loan to assist the monetary needs obligatory for education of your child. Shape your child’s upcoming with Federal Bank’s Education Loan known as Special Vidya Loan.

Purpose of Federal Bank Education Loan

Federal Bank’s Education Loan (Special Vidya Loan) gives an opportunity for students to seek education, by providing monetary support. The loan can be availed for several educational courses in India and abroad. Job-related training and skill enlargement study courses are not eligible for this loan.

Features and Benefits

Expenses Considered for Federal Bank’s Education Loan:

To maximize the benefit for students, Special Vidya Loan covers the following items –

  • Tuition fee payable to the student’s college/school for the determination of examination, library, lab, etc.
  • Hostel fee: This is appropriate in case of a school/college providing residential facilities to its students.
  • Cost of laptop (only if essential for the course), books, uniform, equipment and instruments obligatory for the course and travel expenses of the student.
  • Expenses incurred for project work, study tours, thesis, etc.
  • Caution deposit fee charged by the institution, amount payable towards the institution’s building fund, any other refundable deposit. All of these need to be supported by bills/ receipts, and cannot exceed 10% of the tuition fee of the course.

Federal Bank Education Loan Eligibility and Loan Application Procedure

Following are the eligibility criteria to avail Federal Bank’s Special Vidya Loan-

  • Candidate should be a citizen of India.
  • Candidate needs to secure admission to the professional/technical course (for which the loan is availed) through a formal entrance test/selection process.
  • The educational institution and course need to hold a government approval/recognition.
  • Vocational training and skill development courses are not eligible to avail this loan.
  • A course certificate needs to be issued by a body formed by enactment of Parliament/ Government Department/University.

Amount of Education Loan

For courses in India, the loan amount is up to Rs.10 lakhs, and Rs.20 lakhs for courses abroad. This loan can’t be availed for vocational training and skill enlargement courses, whether in India or abroad. The loan quantum depends on the reimbursement capability of the parents or student. To ensure a continued disbursal of the loan, the student needs to deliver an acceptable presentation throughout the course.

Margin

  • No margin is appropriate on loan amount up to Rs.4 lakhs.
  • 5% margin is appropriate 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.

Rate of Interest

For accessibility of students and parents, Federal Bank offers Education Loans at affordable rates of interest. It varieties from Base Rate + 3.25% to Base Rate + 4.90%. The Base Rate is 10.2% per annum with effect from 16th June 2014. Only simple interest is charged during moratorium period.

Repayment Options

Reimbursement towards the loan can be made in easy EMIs. No repayments need to be made during the moratorium period. The moratorium period is the duration of the course + one year/six months after the student gets a job, whichever is earlier. The following methods can be used to reimburse the loan, in Easy Monthly Installments –

  • Cheques
  • Standing Instructions at your Federal bank branch/automated payment through ECS.
  • Through the bank’s internet banking facility called Fed Net
  • Mobile Banking

Loan Period

The loan period is the moratorium period + 5 to 7 years. The moratorium period is the duration of the course + one year/six months after the student gets a job, whichever is earlier.

Security

  • For loan amount up to Rs. 4 lakhs, no security is compulsory.
  • For loans up to Rs. 7.50 lakhs, bank receives third party guarantee and collateral security.
  • If a loan above Rs. 7.50 lakhs has been availed, then collateral security with a stipulated margin is compulsory.

Documents required

To avail an Education Loan from Federal Bank, you need the following official papers –

  • Proof of Identity issued by the government – passport, driving license, PAN card, etc.
  • Proof of Residence – ration card, electricity bill, lease agreement, etc.
  • Offer letter/admission letter from the educational institution.
  • Basic qualification certificate and marks card.
  • Proof of fee structure from the educational institute.

In case of co-obligation, official papers should be implemented by the parent/guardian and the student, as joint borrowers.

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