Soaring expenses of higher education have increased the demand of education loans. Education loans have become a common mean of financing in the present times. Most of the students expect to earn high salaries at the end of their professional training and are likely to be in a position to repay these loans over a period of time.
Both public and private sector banks offer education loans. The first bank to offer education loan was State Bank of India, it started offering education loans since 1995 and many banks followed its footsteps.
Today, education loans are provided for both residents and NRIs for various courses. NRI education loan allows the NRIs to provide education to their children in India, in recognized schools and colleges. Under NRI educational loan scheme, one can seek loan for tuition, admission and other fees, maintenance cost, cost of books and equipment for higher studies. Caution deposits and other refundable deposits can also be financed under this scheme. The loan amount might vary from bank to bank.
Courses under NRI education loan:
a) All technical /professional courses including certificate courses, diplomas; graduate/ Post graduate and/ or doctorate degree studies in recognized schools / colleges / Institutions. (Courses in Medicine, Surgery, Dental Science, Architecture, Veterinary Science, Agri Sciences, various branches of Engineering, Technology, Computer Science, Industrial Management, Business Administration and other Management Sciences).
b) Computer Courses which are conducted by institutes given due accreditation by the Department of electronics, Government of India.
c) Any other specialized course in Computer Science.
Eligibility criteria for NRI Education loan
The Borrower must be the student and Parent or Guardian jointly. This means if an NRI wishes to educate his/her nephew /niece or any other relative, the student and the supporting NRI as guardian can avail the loan jointly.
Margin for NRI education loan up to Rs.4 lakhs in most of the cases is NIL and for above Rs.4 lakhs the margin is 15%.
Repayment of loan
The repayment of the loan can be done in 12 months after completion of course or 6 months after getting job whichever is earlier in monthly installments for 60 months. If by any chance, the student is not able to complete the course in the stipulated time, extension for completion of course may be permitted for a maximum of 2 years.
No collateral security is required for loan up to Rs 4 lakh. For loan above Rs 4 lakh up to Rs 7.50 Lakh suitable third party guarantee is required and for above Rs 7.50 lakh up to Rs 20 lakh, 100% collateral is required in form of Immovable property/ NSC/Units of UTI/ LIC policy/ RBI Bonds or any transferable Government securities.
Documents to be submitted:
a) Application (Student and Parent or Guardian jointly).
b) Two Copies of Passport Size Photos.
c) Testimonials in original from head of institution and from one or two other respectable persons not related to the student.
d) Proof of Admission to Course.
e) Schedule of Expenses for the course.
f) Copy of Salary certificate / statement (other proof) of Income of parent / Guardian.
g) Copy of Passport of parent / guardian and student (if applicable).
Following documents to be submitted where Mortgage of Property is to be made:
a) Original and prior title deeds.
b) Latest tax receipt.
c) Possession certificate.
d) Encumbrance certificate for last 15 years from sub registrar.
e) Title Clear Certificate from bank's approved advocate.
f) Valuation Certificate from Bank's approved Valuator.
NRI education loan is a hassle free solution for NRIs who wants to send their children back to India for higher studies.